My last article about the 5 lessons working with partners got a lot of comments on Facebook, so I thought I would follow that up with ways to test out a business partner.
I interviewed my mastermind group. Half are coming out with big joint ventures later this month so they had some great tips. The others have been doing it for years so they as well had great advice. They have all done joint venture partnerships big and small as well over the years.
1. Research them
Yup research their website, their products, try to find out how big their platform is which is their reach, their audience size and how responsive they are. Ask your buddies if they have done business with them. You’ll be surprised but some big people are nortrious for not paying affiliate commissions. They use newbies left and right. People in the industry that have been doing this awhile know all about them and don’t do business with them so ask your buddies. Some will promise to be in your telesummit (big teleconference around one subject) so you’ll promote them but never email that they are in it or even show up for the interview. One of my clients found that out and the speaker was famous for doing that. She said yes to everything but only actually would only do some of her engagements, she just wanted her name everywhere.
Make sure their list is compatible with your offer. A few months ago I saw someone in the law of attraction mindset niche email out a JV about dating and how to become a pick up artist. It made no sense at all to her email list. It was a huge mistake. It didn’t match. In fact it probably pissed of her list. The owner of the list did it because the partner was going to email their list. But the lists are not compatible. It’s going to hurt your list. People trust you. Only send out JV offers that your audience would really appreciate and would be actually interested in.
Discuss responsibilities and see how rigid or fluid they are. Does it match your style? Can you handle their style?
If the JV you are forming is more of a long-term venture make sure you meet your partner a few times. If it’s a one-time JV it’s fine to set it up over email or phone.
For long-term joint ventures:
- When you meet in person see what they drive when you meet. A BMW says a lot more than a rusty pickup truck.
- Everyone involved take a personality test and compare the results. You want people that compliment you, not that are exactly like you.
- Meet several times before committing.
- Have personal conversations not just about business but about family, philosophy, and yes spiritual. This tells you a lot about them.
- Buy one of their products and see what the experience is like. If it’s horrible rethink what doing anything with them.
- Look at their marketing funnel. Does your thing fit in or conflict? Is their funnel professional looking? What does their funnel convey to you?
As in romantic relationships communication is critical. If any thing unusual happens tell your partner if it affects them.
If your list size if much larger or smaller than theirs talk about expectations. One of you is going to get more sales either your product/service or theirs. But, remember you’re splitting the money so if you’re partners deal doesn’t do as well but yours does you still got your percentage out of both products. People that have done this before understand this. Newbies don’t and get upset. Communicate what could happen so their are no hard feelings.
Some offers may just not work. You research and thought the offer would match their list, but it just flopped. With clear communication, upfront, you’ll avoid people getting upset. Well at least usually.
No, Yes Men. You know the people that don’t call you out for being stupid. Avoid Yes Men at all costs. You want honest no holds bared feedback. If you’re full of it you want your partner to tell you that. Yes Men lead to complete failure, it’s just a matter of time. I believe Michael Jackson was completely surrounded by Yes Men. No one told him “You know what? Maybe you shouldn’t take this drug”. A great friend would have, but he was completely isolated from anyone that had that knowledge and could be completely honest with him. Yes Men will totally and utterly destroy your business and personal life. Avoid them at all costs.
People with lots of personal drama are best to avoid. If they are stressed out about their personal drama life and want to tell you in detail over and over again how their life is so dramatic do you really think that won’t influence how they do business? I’ve had clients that go on and on week after week about how they couldn’t get me the info I needed. Not one has been remotely successful. A vast majority do not do anything at all. Yes we all have ups and downs, but if you’re talking about it a lot and not focusing you are not a good JV partner period. Suck it up and focus.
For bigger joint ventures you can test them out. Have a meeting and have some small assignments that everyone needs to do before meeting again. And see if they actually do the task. If they don’t, do you expect them to meet deadlines?
Buy one of their products and see what the experience was like. Don’t tell them you’re doing this so you get a real response. You can have someone else buy it for you so you don’t get any special treatment.
4. Stay involved
If you are the big wig in the joint venture and just show up and draw the crowd don’t just do that. Stay involved in the business especially big decisions. Your partner could make a big purchase or commitment that is a business killer if you don’t stay involved. Make sure any money decisions over a certain amount require your approval. Have regular status update phone meetings and just make sure everything is running smoothly. It’s a big deal, a big lesson, stay involved.
5. Ask for a contract
If you ask for a contract or letter of agreement and they don’t care that’s a clue. If you’re very good friends with them and it’s a one-time email JV that’s one thing, but for someone new something in writing is needed. I do contracts for everyone including family and friend, actually especially family and friends.
For bigger JV’s you may want a non disclosure agreement (NDA). Is your partner okay with that? Do you really think they won’t blab all over the town (hell the world) details you don’t want disclosed. If you don’t trust them even with a NDA why are you going to do business with them?
Most of my mastermind think even for long-term JV that forming a new LLC or corporation isn’t needed or wanted. You can do any type of dealwith just contracts between companies. One mastermind member thinks starting off with a JV contract and then if it’s working well spinning it off to a LLC is necessary. Just remember it’s not needed but it does help in some legal and expenses aspects. See a Lawyer and CPA about the details. Can’t afford that then you really should just stay with a JV contract or letter of agreement.
P.S. Hope you enjoyed those lessons. What have you learned about working with partners? Discuss below in the comments.
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P.P.P.S. I’m having a 4 week class on How To Be Successful with Joint Venture Business Partners starting March 2nd. It’s $97 and will include interviews with some of my mastermind group and special guests. We’ll answer all your questions about doing joint venture from people that do them everyday. Register for the class now.