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One of the last things on the mind of a small business owner, who’s focused on the growth of their company and running day-to-day operations, is performing his/her due diligence on vendors, strategic partners and customers. These ambitious, hardworking business professionals are in good company. Indeed, corporate decision-makers in the boardrooms of larger public companies are often just as likely not to perform this crucial task.

This by no means makes the consequences of not performing your due diligence any less severe. In fact for small business owners, a bad business relationship could result in more than a significant financial loss and expensive PR campaign; it could cost you everything you’ve worked for!

Let us imagine for a moment that your small business has a strategic partnership with another company in which you recommend each other’s services to your respective clients. However, the partnering business that you are steering your clients toward has a history of underperforming customer expectations, as well as regulatory sanctions from both government and consumer protection agencies. Shortly after giving your ill-fated endorsement, defective parts begin arriving at your client’s office, while other shipments are mysteriously lost in transit.

Consequently, your client now has shelves full of defective products and incomplete orders. Not to mention a line of angry customers stretched around the block. How likely is this client to retain your services in the future, much less believe another word that comes out of your mouth?

Though well intentioned, the small business owner in the above story was only too eager to steer his client to another company in exchange for future sales of his own. Now all he or she is left with is a sullied reputation and an extremely strained relationship, if any, with a once valued customer. As this example illustrates, the consequences of not performing one’s due diligence can be devastating.

So how can a small business owner perform his/her due diligence without sacrificing precious time? Fear not, there are a number of simple yet impactful research practices that one can undertake for little to no cost.

Customer / Client Feedback – Perhaps the strongest indicator of how a vendor, strategic partner or customer will treat your business is how they have interacted with those before you. Find out what companies they have done business with, both past and present. Then sit down and prepare a concise list of questions to ask those other customers about their experiences with the company you are reviewing. When preparing your list, it is important you ask questions that have two key characteristics: 1) they assume an answer, and 2) they cannot be answered with either a “yes” or “no” response. Using both of these question formation techniques will ensure a more meaningful dialog, and avoid leading the person to an answer.

Here are a handful of sample questions you may want to ask:

Attorney General’s Office – Every state and the District of Columbia has a consumer protection division within its Office of the Attorney General. Consumers and business owners can call this division directly to inquire if there are any complaints on file for the vendor, strategic partner or customer. Be prepared; some states will ask you to provide the entity’s address for confirmation of jurisdiction.

Industry-specific Regulatory Records – At the state level, and sometimes federal depending on the nature of the business, companies are required to maintain certain licenses, permits, and other regulatory filings specific to their industry. The name of the agency that houses these records varies by state. Each, however, has either or both searchable online databases and a contact number for phone inquires.

Better Business Bureau – It is often one of the first instincts of a disappointed consumer to relay their experience to the Bureau. The BBB’s informative website hosts a searchable national database that allows users to read reports on both companies and charities. Reports identify the number of complaints on file, the nature of these complaints, and their ultimate resolution. A word of caution: be sure to keep report results in context with the industry in which the vendor operates. A collection agency, for instance, is likely to have a significantly higher number of complaints than a B2B consulting agency that has limited consumer interaction.