Should You Run a Background Check on My New Business Partner

Starting a new business is a challenging experience. But by entering an arrangement with a business partner you’ll alleviate some of the stress of navigating the business landscape alone.

But before you agree to work with an associate you feel comfortable with, it’s important to know a little bit more about them. This is where performing a background check is essential, to validate their authenticity and work out whether they’re a good fit.

Running a background check is important because if someone has something to hide they probably will. This means you’re unlikely to have awareness of previous misdemeanors or questionable aspects of someone’s character.

It’s essential you embrace a vigilant approach to performing a due diligence check, prior to entering a formal business relationship.

Occasionally, background checks will uncover small issues you can work through with honest dialogue. Other times they’ll reveal larger issues you simply can’t ignore, perhaps issues which raise huge red flags.

Leveraging Risks

When starting a new business there are many risks to consider. What’s most important is you implement preventative measures to safeguard against risk. By doing so you’ll be well-prepared to tackle issues if and when they occur.

Risk mitigation initiatives should be among your biggest focuses, applied as part of a screening process for your new business partner. This process requires the same level of scrutiny, if not more than with other business decisions, to protect against failure.

Resume fraud is a real thing, and even with non-severe cases, that doesn’t mean to say you won’t fall victim to a candidate being economical with the truth. Background checks are renowned for showing both minor and more concerning issues.

A thorough check will highlight discrepancies which will indicate whether your business partner is incapable. You’ll discover whether they’ve exaggerated their accomplishments, or whether they’ve lied about years spent in a job role.

To find out whether your partner is trustworthy, honest, and straightforward about their accomplishments, you should work with a professional background checker:

Using a Professional

Though you can elect to run a background check yourself, it often helps to utilize the help of one of the best background check websites. After all, it makes sense to use a specialist, who can leverage years of experience and knowledge to uncover everything you need to know about your prospective partner.

Thoroughness and reliability is everything. With a professional service, you’re more likely to adhere to legal requirements while achieving a level of reassurance conducive to making a good decision about your partner.

What Should You Be Looking For?

Here are some of the biggest issues which should merit concern:

Financial Issues

Things like tax liens, bankruptcy, poor credit, and financial problems should raise alarm bells. Financial crisis suggests a lack of discipline, skills, or the ability to manage finances accordingly.

Ethical Issues

Pending litigation, bad press, and other ethical issues can signal that your partner is untrustworthy. Look out for misrepresentations of references, academic history, and employment information. These will suggest an undesirable lack of honesty.

Personal Issues

Personal problems can translate into your partner failing to meet their end of the bargain. You’ll need a partner who can fully commit to your startup, willing to invest the time, focus, and energy necessary to be successful.

Though you should certainly be vigilant in your approach to discovering these issues, it’s important to not be swayed by isolated incidents, good or bad. Focus on pattern recognition instead, where a pattern of negative behavior will paint a picture that allows you to cast informed judgment.

Adam Hansen

Adam is a part time journalist, entrepreneur, investor and father.