Don’t just trust
Don’t put people in a position where they have to make a choice between doing the right thing and their own self-interest. Example: A and B start a business together on the basis of equal shares but legally all the shares belong to A. They are very successful and 5 years later they are offered £20m for the business. A may still give B the £10m but that’s not the point. If you are B and you have let this situation evolve it is your mistake. Don’t simply trust people to avoid confrontation or the legwork to negotiate a proper deal from the outset.
The first priority of a Director is to do what is right for the business. Don’t put yourself in the position of relying on verbal agreements. Even the most fair-minded and decent of people can be prone to mis-remembering when significant amounts of money are involved.
This trust principle extends to professionals. Too often we trust doctors, lawyers and accountants because we don’t really understand what they do. We assume that because they have had to go through years of training that they are all equally qualified to advise us.
This is not the case, you have to choose your professionals carefully depending on the circumstances. You wouldn’t go to a Harley Street specialist for a cold and you wouldn’t get a top employment lawyer to draft a contract for the intern. However, on the big decisions such as who will prepare the contract to sell the company, acquire a business or defend a warranty claim, you should get the absolute best professionals you can afford to represent you.
Research the people you are doing business with (this includes potential buyers and customers) and choose professionals that come highly recommended and who can demonstrate success in adversity.
The team at Jola have been starting and running businesses successfully for years. If you are interested in working with likeminded suppliers, contact Jola.
