Strategic Partnerships: Red Flags when partnering with other businesses
I had a bad experience with an organization that I partnered with and I wanted to share with other business owners based on some hard lessons I learned. The purpose of this blog is to prevent other business owners from going through the headaches of a poor partnership. Remember, a partnership is a mutual agreement between two parties who have equal responsibility and equal duty to the success of the endeavor. Just like personal and romantic relationships, they’re healthy when both parties respect and put in the same amount of effort. Healthy relationships, in any scenario, are not one-sided.
Red Flag #1
I noticed a few red flags in the beginning, but I overlooked them because I believe I had this idea of who this organization was in my head. The first red flag I noticed was every call we were on, there was constant mention of everyone “hating me.” We would bring up names of people who could help us with the event and the leader would say things like, “Does she hate me?” Or “I don’t think she will help because I heard she hates me.” She also said several times throughout phone calls, “Half of my organization hates me.” That should have made me run away but I didn’t know her well enough and gave her the benefit of the doubt.
Red Flag #2
When we were putting together our marketing emails, I was sent a draft that mentioned nothing about my organization. I had drafted my version which had information about both of our organizations and this bothered me. We jumped on a call and I voiced my concerns but I was told not to worry, that it was just a rough draft email, and that everything between our organizations was fine, and reassured me that it was an equal partnership. This was an actual red flag, on paper, but instead of acknowledging it, I took their word instead.
Red Flag #3
Two months before the big event, I noticed that the other organization barely had any ticket sales, barely any sponsorships, no raffle prizes, and barely any silent auction items. I had mentioned ticket sales on pretty much every call and they kept making excuses for the lack of tickets being sold on her end. They would explain that so many emails were sent but no one is responding. I tried to give her advice on how to get more people to come but she never took action. Be careful with people who lack accountability because issues like this will never be their fault, only yours.
Red Flag #4
We were now nearing the event and were on a call together. The event planner was getting the run-of-show list together and is asking who will speak and when, etc. She then asked if the other organization would be announcing to our guests what they plan to do with the money from the event and they said “No, we don’t need to mention that.” At this very point, I knew something was majorly wrong. As a nonprofit, why wouldn’t you want to mention what you plan to do with all the money that you raised? This red flag taught me how important transparency is for me. In the future, I will only partner with organizations that are honest and transparent.
Red Flag #5
Despite those red flags, I was hesitant to continue working with this organization because I felt I was doing the majority of the work (ticket sales, silent auction, raffles, etc.) I even heard my gut saying not to sign the contract but I didn’t want to back out of the partnership I verbally agreed to so I signed it anyway. Big mistake. I want to stop here to tell everyone to follow your gut! I was more concerned about disappointing people than listening to my intuition. I could have saved myself a whole lot of grief and lost money if I just would have listened to myself. Be cognizant of your partnerships, the wrong one could literally cost you.
Red Flag #6
Another takeaway that I learned from this was to create your own contract! I allowed their attorney to create the contract and of course, she made it so that it served in their favor and not mine. It was very vague and also was missing a ‘financial plan’ portion. I completely overlooked that missing financial plan portion of the contract. If you have an attorney, have them review the contract for you. If you do not have an attorney, read it really carefully. If you do not understand it, ask them about it. The contract should also state exactly what you expect the other party to do, and be super specific. Going forward, I will say that each party needs to bring in X amount of ticket sales or more and failure to do so will result in reimbursements from the party with the lesser amount of tickets sold.
Red Flag #7
Which brings me to my next red flag. I thought this organization was well-liked and respected by its members. I was shocked when their members weren’t buying tickets to our event. Come to find out, a lot of people are not their fans, which I didn’t find out until after the event was over. So many members told me they wanted to warn me about them but they weren’t sure how close we were. Be sure to know about the company you are partnering with. Are their members happy? Do their employees like working there? Ask around, do reference checks, and do your homework. It will be worth it.
Red Flag #8
Do your research on the health of the business, make sure the company is financially sound, and that the executive staff makes good decisions. This person also made a ton of careless mistakes like giving out free tickets, not tracking cash payments, giving the venue the incorrect number of guests which resulted in us paying for people’s food who weren’t even there, etc. When collaborating, especially when raising money together, the purpose is to double (or more) what you can do by yourself.
Red Flag #9
On the night of the event, this leader did nothing. Even though it was stated in the contract we signed that both parties were supposed to help run the event. They decided to enjoy the night by drinking at the bar with their friends and enjoying the activities we had set up for guests. Not once that night did they ask, “Is there anything I can help with?” or ‘Is everything good?” Be specific in your contracts what you expect all parties to do, even on the day of the event, if applicable.
Red Flag #10
I decided to voice my concerns in our post-event discussion and I hadn’t even gotten through my first sentence before this person started going off on me. The entire time she was raising her voice at me, speaking over me, interrupting me, etc. This is such a big red flag. Be careful of people who can’t take accountability for their actions. How would I know this you ask? See red flag number three. They were making excuses and lacked accountability. There are signs to watch out for; however, be open to seeing those signs, no matter how much you like the person.
Red Flag #11
After our phone call, this person started reaching out to all of her members to talk about me. She even reached out to my board president to tell her that I had attacked and verbally abused her. She also started deleting my posts from her FB group and created an event on the same day we decided to do this workshop. This is called a ‘smear campaign,’ which now shows this person is toxic. This is why I say to check with members of the organization to see how this person acts when faced with conflict. You want to ensure you can have a respectful and professional conversation with the other party should any issues arise.
Red Flag #12
After 2 weeks, they sent a filled-out PDF version of the money that was made from the event. I then asked them to provide supporting documentation to support the numbers I was given and they refused. Huge red flag. This should also be put into your contract. A financial report was due to me 10 days after the event and I received a made-up report. Be sure to ask for screenshots and exports. Do not just take their word for it.
Red Flag #13
Breach of contract. There were many parts of our contract that were breached. I stated this in an email and they responded by denying everything. Remember, just because someone doesn’t admit to breaching a contract doesn’t mean that they did not breach it. Save all emails, and text messages, and record your meetings (with their permission of course), that way if something goes wrong, you have support to back up your claims. Remember it's all about what you can prove in court, they don’t care about anything else.
Have you had a business deal go wrong? Did you have a bad experience in a business partnership? Tell us your story in the comments! Your story helps other people from making the same mistakes.
