This is a short post because the point is simple: If you choose to do business with individuals who do not like to run their business with written agreements, good governance, and sound policies – it’s to your detriment.
We’ve written countless times about the need for all businesses to treat themselves “like a business” from day one. Truthfully, there is no magic time when your business suddenly becomes “real” and therefore needs all the things “real businesses” need. The rules of the road apply to everyone – big or small. As I wrote in a LinkedIn post back in 2017 – In the courtroom, your “smaller” or “new” company is not held to a lesser standard of proof, or a lesser standard of evidence, or a lesser standard of responsibility.
That makes sense, right? Your business needs to be the best it can be and, as a Founder, you need to take personal responsibility to make sure that happens. But, what about other businesses in the orbit of yours? Should this same standard apply to them? (I think, of course!)
In my experience, many new Founders concentrate on firming up their agreements with customers – and hold them to a high standard, but neglect to do so with their key vendors, suppliers, and other stakeholders. A key stakeholder is as important (or more important, in some instances) than a customer – so why would you hold a customer to a higher standard (by say, having a written agreement with them) and a key vendor to a lesser one (by say, not having a written agreement with them)? If you choose to do business with someone, for example, who never wants to write anything down or (my favorite) wants to do everything on “a handshake” because “we trust each other” those choices impact your business (oftentimes, negatively).
Don’t forget – the rules of the road apply to everyone, including key stakeholders, so hold them to the same standard.