Vetting a Business Partner: A Physician's Due-Diligence Checklist

By Michael Woo-Ming, MD, MPH

Some of the best things I've built came from partnerships. So did some of my most expensive lessons. I'll be honest with you — the wrong partner can cost you money, time, and a whole lot of sleep long after the handshake. And almost every time it went sideways for me, I could trace it back to the same root cause: I didn't look closely enough before I said yes.

We doctors are funny about this. We'll spend twenty minutes on a differential for a sore throat, then go into business with somebody we met at a conference because we liked their energy. I've done it. Here's the checklist I run now before I commit to anyone.

Track record beats chemistry every time

Liking someone tells you almost nothing about whether they'll make a good partner. I've enjoyed dinner with plenty of people I'd never let near my bank account. What you want to know is what they've actually done. Ask about their last couple of ventures — not the highlight reel, but what broke, what they lost, what they'd do differently. Then go check it yourself instead of taking the story at face value.

And call the people who worked with them before. Not the current fans — the former partners. The most useful question in the world is, "Would you do it again with them?" The pause before the answer usually tells you more than the answer.

Get specific about money

You don't need to see someone's tax returns. But you do need to understand how they treat money, because that's exactly how your shared thing will treat money. Do they pay people on time? Have they had deals blow up over cash, and what actually happened? Vague, hand-wavy answers here are a yellow flag for me.

Nail down the boring stuff before you start: who can sign checks, how a big spend gets decided, how you split what comes in, and — this is the one people skip — how either of you walks away. A solid partner wants this spelled out as much as you do. They've been burned too.

Decide who decides

A lot of partnerships don't fall apart over bad intentions. They fall apart because nobody ever said who's in charge of what. Sit down early and write it out together — your lane, their lane, and who breaks the tie when you disagree. If you two can't agree on that while you still like each other, imagine how it goes when there's real money and stress on the table.

Know how your name gets used

This one I feel strongly about, and it's the one doctors underestimate. If a venture is going to operate under your license, your credentials, or your provider number, you have every right to know precisely how they're being used — and to get regular reporting on it. Build that visibility into the agreement on day one. Don't assume someone will keep you in the loop out of goodwill. The person who's cagey about showing you what's happening under your name is telling you something. Believe them.

Put it in writing before a dollar moves

A handshake isn't a partnership. It's a future argument with no referee. Get a real agreement drafted by an attorney covering ownership, roles, money, decisions, and how to unwind it. The exit terms matter most, and here's the irony — you can only negotiate them fairly while everyone's still friendly.

I know paperwork feels like you're accusing someone of something. You're not. The document is what lets a good partnership survive the rough patch without the whole relationship being on the line. A fair partner will want the same protections you do. If they push back hard on putting it in writing, that's your answer.

Trust the slow yes

The most protective habit I've got is being willing to move slowly. A good opportunity will survive a few weeks of careful questions. The deal that "has to close this week or you'll miss it"? That pressure is one of the most reliable red flags there is. Anybody who needs you to skip your homework is asking you to carry a risk you can't see yet.

You can be excited and careful at the same time — those aren't opposites. The doctors I've watched build something that lasts are the ones who stayed pumped about the upside and dead calm about the commitment. Do the work up front. You'll spend a lot less time cleaning up later. I learned that one the hard way so you don't have to.

Dr. Michael Woo-Ming is a Mayo Clinic-trained physician, practice owner, and founder of BootstrapMD. He's the author of The Positioned Physician: Earn More, Work Smart, Love Medicine Again. Learn more at michaelwooming.com.

This is general educational information, not legal, financial, or medical advice — talk to your own counsel about your situation.