Going into business with a partner is a strategic move, both financially and logistically. When multiple individuals are financially accountable to the business, it can help to promote growth and cash investment. There are also a number of non-financial benefits to running a business with a partner, including accessing other persons’ business skills and technical knowledge on how to run a successful business in your industry.
When choosing a partner to go into business with, it is important to understand all the risks you are assuming as part of this partnership. Choosing the right person is a mix of technical and business skills, compatible personalities, and financial resources. To help protect yourself and your investment, we’ll be discussing the important proactive steps you can take to ensure your business partnership is open and transparent.
How do I run a background check on a business partner?
Running a background check online on any individual is a relatively simple process if you know the correct software to use. Many online sites promise a comprehensive background check, but only a select few offer an in-depth analysis of all of the public records available of the person you are searching for. CheckPeople.com is an online background search that scours websites, databases, and public records to create an easy-to-read report. CheckPeople.com services are cost-effective, easy to do, and can often be completed with only the first and last name of the person you’re searching for.
A comprehensive background check on a site like CheckPeople.com can turn up valuable information on your potential business partner, including:
- Court records including past criminal charges and sex offender status
- Past and ongoing civil litigations
- Bankruptcies, insolvencies, and other financial information
- Social media accounts and accounts on other websites such as chatrooms or gambling sites
- Traffic violations
What should I consider when I get my results of a background check?
When conducting a background check on a potential business partner, there are a number of red flags that you should be on the lookout for. It is important to understand the personal and professional dealings of your potential business partners to help gauge their financial circumstances, ethics, and values and how these factors determine your willingness to do business with them.
Partnering up to buy or maintain a business is a valuable way to increase your cash flow and increase the time and financial investment you can make in your business’ growth. A background check can help to highlight any financial vulnerabilities in your potential business partner. Uncovering and addressing a number of financial red flags can help to mitigate your own risk and help to determine if this individual is the right business partner to work with. Poor credit, bankruptcy, lawsuits, and failed businesses should all be treated with caution and can often indicate that your potential partner does not have the cash flow to properly invest and maintain the financial responsibilities of owning a business.
Same values and ethics
Another important consideration you should take when reviewing the background check on your potential business partner is indicators of poor ethics or a lack of good business sense. To avoid risking your business’ reputation and profitability, we recommend examining your potential business partners’ previous business, investment, and personal endeavors to ensure their own ethical standards meet your own. A number of red flags that you should pay attention to include pending litigation, criminal records, a history of civil court proceedings, shady investments, or a lack of successful business practices.
Now that you are empowered with the knowledge on how best to run a background check on a business partner you are ready to move forward with your business plans. After reviewing the findings, it is important to use this information to help draw up a legally binding partnership contract to help protect you and your business. Even if your background check does not show any red flags, a partnership contract is always in your best interest to ensure your standards of ethical and financial professional standards are met.