Good and bad business partners

Doing deals or setting up a company, you cannot be in business on your own. Working with anyone new involves risk.

The #1 lesson is start with a small deal with a new partner and see how it goes.

By and large there are more good people than bad out there. The good ones aim for win-win, where reciprocity, trust building, partnership and mutual benefit are key outcomes.

Bad business partners tend to fall into several categories, including:

  1. Incompetents - by far the most common. They are often great company and you may like them immensely as people. They are not bad in the sense of being wicked, they just can't deliver. Eliminate these by doing some basic due diligence around the people you work with: are they on LinkedIn? What does Google throw up about them?
  2. Mean people and companies - these are folk who are not interested in win-win. You can still get something out of working with them but it is gonna be hard work. The advantage of dealing with mean people is that they usually display that characteristic fairly early so you know what you are up against.
  3. Indifferent corporations - this is 'elephant trampling on all the mice' syndrome. It's not that the individuals are mean, it's just that at a very basic level the entity you are contracting with profoundly DOES NOT CARE, it has no soul. The advantage of dealing with this kind of entity is that so long as you don't expect it to have a soul, it tends to be fairly predictable (and stick by the rules - just don't expect them to be bent).
  4. Bullshitters - there are a HUGE number of people out there who will promise what they can't deliver. Starting with a small deal and watching carefully HOW they handle every aspect of it is the way to catch these guys out. Usually they betray themselves early - late payments, excuses, not following through on what they promise etc
  5. Con artists - these are people in it for a "long con" - people who will manipulate you into a sense of false trust and then take advantage. They are out there but few and far between - for them to enjoy doing what they do there has to be a massive payoff.

Coming back to the idea of doing a small deal first, if that is not possible, then do a staged deal with very clear milestones: you deliver X, they pay Y. If Y does not follow X, ask why politely. If the reason does not make sense and get rectified immediately, WALK AWAY.

Always bear in mind the limitations of formal contracts and remember, everything is negotiable.

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