The huge numbers now involved in buying inputs and selling product make it more imperative than ever that you do due diligence regarding your business partners.
Legal beagles offer the following as some ideas to protect yourself:
- Get everything in writing.
- Whenever possible, pay for products when they are delivered and request payment when you deliver.
- If you prepay inputs, ask the supplier if that money goes directly toward purchasing what you have ordered.
- Ask suppliers and/or buyers of your products for a bank letter or credit or letter of comfort, ensuring they have a source of funds.
- If your business partner files bankruptcy, attend the court hearing and be prepared to explain the implications of your potential loss to you and your family.
For More Information
Read "Moneywise” on page 8 and "Do Due Diligence” on page 14 in your January issue of Top Producer.