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Million Dollar Consulting® Mindset
From Alan Weiss

Volume 4 Number 10
October 2014

Our mission is to spark new thinking and ideas for creating a thriving business and rewarding life. (Please see our unique Million Dollar Consulting® Convention: http://www.summitconsulting.com/million-dollar-consulting-convention/)

How to Evaluate A Potential Collaborator or Partner

There are times when a collaboration appears on the surface to be made in heaven, and when you feel you just can't afford to ignore the opportunity to partner with someone. Although I believe that few of these relationships ever work out in the long term, let's look at some clear criteria which can at least protect your interests if you decide to move forward.

First, check out the chemistry.
These relationships can be tougher than marriages. Meet a half-dozen or more times at some length. Have some meals together (I've seen poor table manners sour a relationship). Find out how the other person comports himself or herself in a variety of differing circumstances. Is there a fit socially as well as professionally? Do you look forward to the next meeting, of find an excuse to shorten it or avoid it?

Second, check references.
Talk to people who have worked with the other party. This is quite proper in terms of evaluating an alliance of any kind. Ask about the downside. (If there is no downside, either find more candid references, or run for the hills. We ALL have downsides.). If alliances ended, find out why? If they attenuated, find the cause. When they worked well, what were the key factors? Can you provide those factors yourself to make the relationship work?

Third, validate claims.
Don't accept things on face value. Confirm with clients, former partners, accountants. It's not unfair or impolite to ask to see the books. Call the school where the other party received the Ph.D or MBA. Don't forget, any lies or misrepresentations will also rebound to muddy you if you're seen as a partner.

Fourth, maintain legal separation.
Create a sound and contractual working relationship, but don't merge the businesses or commingle funds. Keep a "firewall" in place for protection against unknown claims or unseen flaws. This isn't a lack of trust, it's an act of prudence. Similarly, keep assets, web sites, support resources, computer files, and similar important aspects of your business separate and intact.

Fifth, provide for a trial period.
Don't over-commit. Take 30 days (or 60 or 90) to evaluate the relationship. Has it developed the way you expected? Did you both follow through on commitments? Did you learn anything surprising or new? Can you sustain this for a year or more? Have a frank discussion about the "shake down cruise."

Sixth, allow for unilateral rupture.
It's best to allow either party to leave without agreement of the other party with fair notice (e.g., 60 days). This is much easier if you don't have common assets to break apart or common debts and obligations to honor (though there may be some project delivery needs). If these relationships are tougher than marriages, the dissolutions can be far worse than divorce.

I've found that the best alliances are almost informal, with clear projects in mind so that they are pragmatic and not conceptual. The partners come together and depart again as circumstances dictate. Therefore, only clear and legitimate business is driving the relationship, which becomes truly symbiotic. Moreover, the lawyers aren't involved, which will keep things less expensive and less traumatic all around.

In all these years as a solo practitioner, I've had three alliances, two of which served a finite and clear purpose, and the other of which is in place for several years. The point is that these don't come along frequently, and you shouldn't feel bad in dismissing the vast preponderance of the offers.

Finally, never establish a close relationship with a direct competitor or someone who may enter your particular business field or niche. Never share existing client information, or invite people in to meet your buyers. That may happen far down the alliance road, but it's never needed at the outset and can constitute an enormous price to pay if you've made a mistake with your prospective partner.

Be cautious, prudent, and safe. You can succeed wonderfully on your own.

© Alan Weiss 2014

© Alan Weiss 2014. All rights reserved.
You may reprint and excerpt this newsletter provided that you include our copyright, the source, the author, and “reprinted with permission.”
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Million Dollar Consulting® Mindset

Volume 4 Number 10

For more issues of Million Dollar Consulting® Mindset, click the link below.

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