Factory for Sale: The Strong and Honest Partner

Author Ziad Rayess shares a fascinating anecdote in his book "Shortcut for a Better Life" about a friend who insisted on investing in a factory project despite its lack of financial viability.

The author, who was well-informed on the topic, advised against it, but his friend's determination and the conviction that "God was with him" prevailed. The end result was a failed factory that was eventually put up for sale. This story emphasizes the value of both honesty and the concept of strength when it comes to partnerships between investors and idea implementers.

In his book "Shortcut for a Better Life", the writer "Ziad Rayess" mentions: About three years ago, a close friend came to me. He and his father were known for being good and upstanding people. He proposed an idea for a small food production project, saying he was working on an investment portfolio to build the factory.

Perhaps it was a coincidence that by the nature of my professional work over the past ten years, I had worked on building a factory for the same product and supervised management of the factory. So I was well-informed on the topic, and I asked him some basic questions from which I determined the economic viability of the factory. I could tell that the whole thing wasn’t viable, and I advised him as such, but he implied to me that he was determined to move forward, that he “feared God and God was with him.”

I declined to participate, and the meeting ended. Several months later, he contacted me and told me that he had recently finished building the factory, but he was facing some technical issues with operations. He requested a consultation from the technical team I work with, and in the end, I connected him with them. I later learned that the factory operated on and off for three months, and then suspended work. The factory was subsequently offered for sale.

The truth is that I wanted to tell this story here because from time to time, I come across many stories about disputes because of the use of the idea of “honesty” while ignoring the concept of “strength”.

Many partnerships are set up between a first party (the person who owns the capital or the financial portfolio) and a second party (the person who has the idea and implements it). Their partnership is rooted in the amount of trust the first party has in the second and all their considerations regarding “honesty”: the second party’s integrity, trustworthiness, faithfulness, etc.

The first party ignores the necessary characteristics related to the concept of “strength”, including:

1. Academic and administrative knowledge, both in general and regarding the nature of the specific project.
2. Knowledge of the market in which the project will take place and the laws applicable to the type of work and location of the project.
3. Knowledge, discernment, and utilization of the necessary finance departments; application of international reporting standards.
4. Discerning and invoking the importance and necessity of ensuring sufficient capital for assets and project operation until the project is self-sufficient.
5. An ability to understand others and work with them; patience, persistence, commitment, and passion.
6. An ability to keep up with modern technology and openness to constant updates to account for technical developments and market conditions.
7. Previous practical experience—not just academic education.

This checklist is in addition to other factors that depend on the nature of the project.

From the start, the two parties have a shared responsibility that each should choose a strong and honest partner.

Conclusion:

In conclusion, the story shared by Ziad Rayess in his book emphasizes the significance of considering a variety of factors when entering into a partnership, including academic and administrative knowledge, market and legal knowledge, finance management, experience, and other project-specific considerations. Honesty alone is insufficient; you also need to take strength into account. Both parties share the responsibility of choosing a strong and honest partner to ensure the success of the project.