When you own a business, working with other people is an absolute necessity, whether you are working with employees, outsourcing specific tasks, or hiring legal or other advisors and more. And working with other people means that you have to put your trust into other people, which can leave business owners very vulnerable to all kinds of violations of that trust- including fraud, theft, and even incompetence. So, with that in mind, here are 4 tips to help protect yourself and your business when working with other people:
1. Get Everything in Writing
Many people are very trusting and want to take others at their word. But in the business world, verbal agreements can wreak havoc not only on your business, but also on the very partnerships that those agreements were formed between. So, I always advise getting everything that you can in writing. First off, a lot of people don’t listen very well. Secondly, individuals can interpret the same exact conversation in very different ways. And lastly, while most people have good intentions, let’s face it, there are a lot of scammers and delusional folks out there, too. So, having your conversation written down (especially in a legal contract of some kind if anything major is on the line) will clearly identify the parameters and expectations of that agreement and help prevent misunderstandings. A lot of times, and especially in small businesses, agreements are entered into at the beginning of a partnership or work relationship when everything is going great, but eventually, an employee will quit or a service provider will flake. Having that written agreement will help keep everyone accountable at a minimum, and give you some avenue for recourse if someone isn’t holding up their end of the deal.
2. Know Everything That Goes on
Business owners often decide to work with those that they trust the most, from family members or lifelong friends to a close legal advisor or mentor. But the only person that is entirely vested in your own success is you, so it is of the utmost importance that you not only are aware of, but fully understand every aspect of your business. Make sure that you know what every employee is doing, what every contract is about and where every single cent is being spent. Delegation is important, but as the business owner, you are ultimately the only one responsible for knowing everything that goes on. If you don’t, it leaves you very vulnerable to theft, legal action or even the unintended ramifications of incompetence from an employee or partner. We all want to think the best of others, especially if they are a trusted friend or family member, but unfortunately, there are all kinds of situations that can put your business (or even personal) assets in jeopardy. So, make sure that you understand every aspect of your business!
3. Have a Process for Accountability
Another great way to cover your bases, particularly when it comes to the financial aspects of your business, is to have two unassociated individuals sign-off on every major decision. This includes anything from writing and cashing checks to signing off on contracts and purchase orders. And this also means that you should have a separate lawyer, a separate accountant, a separate agent, etc. all from different companies and that don’t know each other in any way. This process will help provide accountability to keep your best interests in mind, identify any problem areas or issues more quickly and prevent any conflicts of interest.
4. Know Who You are Really Dealing With
During interviews and first meetings, people do their best to impress and this can make it extra difficult for you to know who you are truly hiring or doing business with. With the internet, doing thorough reference and background checks is easier than ever, so make sure to follow through. And you can learn a lot about who a company or individual truly is from their social media sites like FaceBook or Twitter. You can even run credit checks to make sure that before you enter into a business endeavor with someone, they aren’t in big financial trouble. This will help ease your mind about putting your business and trust into someone new.
Do you have another tip for trusting others in your business? Please share it below.Tags: business tips, Money Management, Small Business, Team Building