You can’t choose your family, but you can choose your business partners, and it’s the latter that can have the most significant consequences for your financial future. Among the leading causes of business failures are business partnerships that have gone bad. Choosing a business partner is tantamount to choosing a person to become part of your family because if you can’t trust someone to take care of your children, you certainly can’t trust them to take care of your business.

Here are five things you must know before going into business with someone:

Character:There is nothing more important than a person’s true character. Integrity, reliability, loyalty, unselfishness, broad-mindedness, and forward-looking are among the most essential traits a person should possess to be considered a leader and a solid partner.As part of a detailed background check that includes a person’s financial and business background, it is essential to gather evidence of their character through interviews with friends, family, and former colleagues.

Shared Vision:Without a shared vision, there are bound to be disagreements on the direction the business should take, ultimately leading to struggles over basic policy and operation decisions. Two or more partners must be able to articulate a single vision for the company and agree on the minute details of the mission, values, and goals of the business before there is any chance of a successful business relationship. Prospective partners should spend as much time discussing and agreeing on these critical aspects of their business before proceeding.

Complementary Skills and Expertise:Partnering with someone in a business venture is about bringing something to the business that you alone cannot provide, be it some essential skill or expertise that couldn’t otherwise be acquired by you or outsourced.

Business Track Record:Your background check will uncover a lot of information about your prospective partner’s business background. The real story, however, lies in their actual track record for achieving results. It is essential to verify their track record and their business achievements.

Financial Stability:When two or more people become co-owners in a business, their personal finances are subject to scrutiny when the business needs to obtain any kind of credit. Also, if a co-owner gets into financial trouble without adequate protections, the business is vulnerable to creditors and bankruptcy actions. It should go without saying that you should never go into business with someone with questionable finances.

These factors are not mutually exclusive. All should be carefully investigated, and a prospective partner should be able to meet all the criteria. A hole in any of these should be a major red flag.

When a match is found, the partnership should be formally structured to include a legal, written agreement that states how either partner may leave the relationship. Management roles and responsibilities for each partner need to be clearly defined, along with methods of accountability. A business plan with company goals, objectives, and strategies must have the strength to guide day-to-day policy and operational decisions, and managing partners must agree to frequent reviews of the plan to assess its progress.