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7 warning signs of an untrustworthy business partner

On Behalf of | Oct 24, 2016 | Business Law |

Trusting in your business partner is essential to a successful business. You must rely on each other to support smart decisions, challenge bad ones, and collaborate in between. Without a foundation of trust how can you build a great business together? Sometimes you might have doubts for a good reason. If your gut is telling you that something is wrong then pay closer attention. We will discuss the seven warning signs of an untrustworthy business partner in this article.

1. They never take responsibility

Everyone makes mistakes. It’s all a part of the learning process. The important part is to own up to your mistakes. Many people refuse to recognize that they have done anything wrong at all. They are quick to point fingers at everyone else before admitting fault. They blame it on the vendor, on the customer, and what if they blame it on you? People like this will not feel guilt and will never take away the lesson from the error. They are doomed to repeat their mistakes over and over.

2. They treat others badly

There is a saying that if your date is rude to the server then you should run. The saying has some merit because someone who easily treats other badly might be a bad partner. If your business partner easily ignores or talks down to others then that should be a warning sign. It might indicate that they lack empathy.

This means that they might not feel bad about firing an employee, dropping a vendor, or telling a customer off. Their lack of empathy could someday drive other business partners and new customers away.

3. They are bad with money

Hopefully it is already a red flag if you often disagree on business spending. They might want to invest in frivolous expenditures while you are more practical. A more ambiguous warning sign might be if they do not manage their personal money well. It could be that they buy a car or house they cannot afford. What will that mean if they make poor financial decisions for the business while you are away?

4. They act entitled

Confidence in your efforts and decisions is important. Do not get confidence and entitlement confused. Confidence can be helpful while entitlement usually leave at least one person disappointed. Entitled people feel that the world owes them success. They don’t need to earn it. They always want to be a winner and they are jealous of those who earn their success. These people can be dangerous, taking the credit, not working as hard, and potentially backstabbing to get to the top.

These business partners will engage in a constant power struggle with you. One of you might get the title of CEO and the other might not. That is ok because a good partner will find a balance in which you can both contribute your strengths. If you both are fighting for control then you both might lose the business.

5. You have conflicting values

It is never a good sign when business partners’ values are unaligned. You might value building relationships with customers and building a brand. They might value making a quick dollar and weeding out the customers that just waste their time. Although you both might have some good points, if you cannot agree to the same basic values then you might not have the same business goals. When it comes down to it you will need someone who has your back in the most fundamental business values.

6. They have romantic relationships in the office

Office relationships are a touchy subject. Some people say they are fine as long as everyone knows about it, while others say, “never.” Having an office relationship in itself is not untrustworthy but the results can get messy, especially for CEO’s and business partners. You do not want a business partner who is viewed unfavorably by coworkers, or who shows up years later with a sexual harassment lawsuit.

Top CEO’s have been taken down for their insidious behavior behind closed doors. Just take the recent $20 million settlement that 21st Century Fox paid to Gretchen Carlson for her sexual harassment lawsuit against Roger Ailes. Not only did they pay big but Ailes stepped down as CEO.

7. They have a history of short partnerships

Bad business partners won’t be a partner for long. Did you notice they have a string of short attempts at success? They might explain that it was the other partner, a vendor, or an economic problem. Remember that there are always two sides to the story. Several stints of unsuccessful partnerships may be the biggest red flag of them all.

While it is important to keep an eye out for the wrong business partner, many partnerships can last a few conflicts. Make an effort to solve your differences first and if that does not work then it might be time to move on. ‘It is helpful to have an experienced attorney at your side while walking the fine line of an unstable business partnership. An attorney can assist you with business planning, agreements, contracts, and more.


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