Aren you considering a partnership? I’ve weathered the storms of joint ventures and emerged with insights that could be your lifeline in entrepreneurship. This episode of the Quality of Life podcast reveals what it really takes to forge a partnership that doesn't just survive but thrives, drawing from the experiences of dynamic duos like Steve Jobs and Steve Wozniak of Apple, as well as the chill vibe of ice cream magnates Ben & Jerry.
Strap in as I recount the bittersweet lessons of my own partnership journeys. I'll share not just the glory of shared successes and doubled capabilities, but also the heartaches of conflicting visions and the cold reality of bank rejections. Learn the strategy to split duties to play to each partner’s strengths and the art of funding a startup with a cohort by your side. Whether you’re a seasoned business owner or new to the game, this episode is a masterclass in navigating the complex dance of collaboration, where the right steps can lead to a harmonious and profitable business ballet.
Thanks for listening! I'm glad you're here.
Be sure to subscribe to the podcast, and share it with someone who could benefit from what you heard. Also, head over to https://theerinolson.com/links and sign up for the email list, and you can get all the downloadable PDFs and tools! News: We finally have a YouTube channel! Visit us HERE: https://youtube.com/@theerinolson?si=xPNSU1-C7Yt9zXgD
Aren you considering a partnership? I’ve weathered the storms of joint ventures and emerged with insights that could be your lifeline in entrepreneurship. This episode of the Quality of Life podcast reveals what it really takes to forge a partnership that doesn't just survive but thrives, drawing from the experiences of dynamic duos like Steve Jobs and Steve Wozniak of Apple, as well as the chill vibe of ice cream magnates Ben & Jerry.
Strap in as I recount the bittersweet lessons of my own partnership journeys. I'll share not just the glory of shared successes and doubled capabilities, but also the heartaches of conflicting visions and the cold reality of bank rejections. Learn the strategy to split duties to play to each partner’s strengths and the art of funding a startup with a cohort by your side. Whether you’re a seasoned business owner or new to the game, this episode is a masterclass in navigating the complex dance of collaboration, where the right steps can lead to a harmonious and profitable business ballet.
Thanks for listening! I'm glad you're here.
Be sure to subscribe to the podcast, and share it with someone who could benefit from what you heard. Also, head over to https://theerinolson.com/links and sign up for the email list, and you can get all the downloadable PDFs and tools! News: We finally have a YouTube channel! Visit us HERE: https://youtube.com/@theerinolson?si=xPNSU1-C7Yt9zXgD
See ya next week! Erin
Erin Olson:
Welcome to the Quality of Life podcast. I'm Erin Olson, a wife, a mother and a serial entrepreneur. After starting three successful businesses, I've learned some hard lessons regarding the ins and the outs of starting and running a small business. My intention is to share my knowledge that I've learned from the School of Hard Knocks, so you don't have to learn it the hard way like I did. Each week, I hope, to guide you to the next level in your business or in the business that you work in. So let's go. Hey guys, welcome back to the Quality of Life Podcast. I'm your host, erin Olson. My goal is to help get you from your business idea to big business. This week's topic is about something I have a lot of experience with partnerships. You know that old saying that two heads are better than one must be true, right. Well, before we travel down the partnership wormhole, make sure that you are subscribed to our email list to stay up to date on all of the episodes, all the resources and all the news that we have. You'll find the link in the show notes.
Erin Olson:
All right, now back to the business of partnerships. I tread on this subject lightly. The reason is that there are so many benefits to taking on a partner. But I must caution you they are great until they aren't. Ask me how I know. The decision to take on a partner is usually not something that people give enough thought to. Usually, a couple of friends or colleagues come up with a business idea and start talking about all the things that go along with it, until someone says, hey, let's do it, let's start a business. Then, usually without much thought about agreements, you dive headfirst into business ownership. But there are some necessary steps that you can take to make sure that your partnership lasts the test of time before you jump in. Now, I'm not trying to scare you away from starting a partnership, but partnerships can be tough. Anytime you get two people with different upbringings, beliefs, visions and goals, there is room for conflict, and when there's conflict, there can be resentment. And resentment, my friends, is the end of your business. So here are some lessons that I learned the hard way to help you decide if you want to have a partner and ideas on how to protect yourself and your business should things go south. So let's cover some of the benefits to partnerships before we start smack talking them.
Erin Olson:
Some of the best businesses were formed by partners Apple comes to mind. Steve Jobs and Steve Wozniak started that company together in a garage and, with their complementary skills and styles, apple became huge. Now Ben and Jerry's ice cream is another great story of business partnerships gone right. And there are others like Google, twitter, hewlett Packard, ebay and, yes, even Yahoo. So they can work and it might be right for you, and I can tell you from experience that splitting the labor and work between two people is definitely a huge benefit. Four hands are always better than two. Now, if you have a business that offers a service, you can serve twice as many. Plus, splitting up the job duties so you can focus your work on where your talents lie is also a bonus too. Another great thing about partnerships is that you both can help fund the business. I talked about this some in last week's episode, plus banks may look more favorably on having two people responsible rather than just one. I will have to say that the best part of having a business partner is the fact that you have someone to vent to, someone to bounce ideas off of and to brainstorm with. You also have someone to talk you off the ledge when you're ready to give up.
Erin Olson:
I fell into my first partnership when I didn't have the necessary skills to do the books with the soap making company. I had worked with my sister when my mom owned that company and I knew she had experience in that area. I was a newer mom and a wife and I couldn't do it all alone and since I wasn't good, it seemed like a good fit. So we became partners with the mission to take the business that our mom had started and make it great. We opened a retail shop and did all the shows together, and we did grow the business. When we wanted to scale the business and went to a bank for a loan, we were turned down. So the only way that the business could grow in its current state was if we worked harder and more often. Now I was already working two jobs besides this one to help feed my family, and so that was not an option for me. So both my sister and I agreed that she would take over the business and the small amount of debt that I had, and we parted ways.
Erin Olson:
Let me tell you our relationship has never been the same. I think we both had some resentment about how it ended and our relationship suffered. Here's the thing there was no agreement ever written up no clearly defined roles or expectations. So when it didn't work anymore, who was to blame? Both of us. But you can't go back, so let's move on.
Erin Olson:
The lessons that I learned from that partnership were invaluable. When I started my last partnership, haychicks, I had the idea for the hay feeder that I invented. While standing in my soon-to-be partner's field, I knew that I couldn't go and start it on my own and honestly I really don't think I could have done it alone. And we did do a lot of things right. First, we agreed upon the goals and the vision and, before there was ever any money made, we agreed upon a 50-50 split and what to do if we ever decided to end the relationship. We agreed upon how to value the business and how to use a moderator if disagreements ever came up, and how and when to take a salary and how much to donate. We also agreed upon what would happen if one of us died. It's kind of rudimentary, but it really came into play later on in business.
Erin Olson:
So to help you decide if you need or even want a partner, here are some things you must do. First, agree on percentage of ownership. I would, in hindsight, recommend at least keeping 51% of the equity so that you are the controlling partner. While it is easy to have no conflict as 50-50 partners, I guarantee someone has got to eventually make the call and that person should be the one with the 51%. Second, agree on who is responsible for what Job duties physical labor, who's going to work on the marketing? Who's going to lead the employees when you get them? How will the workload be divided? Because, friends, you guys cannot be equals in every situation and every talent. So whoever is more inclined to do the books, say to speak, would be the one to do the books. Just divide it up based upon your talents and what you like to do.
Erin Olson:
Third, agree on the plan and vision for the business. What is the end goal? What about in six months, one year, five and then even 10 years? This will not be an absolute law and when, eventually, you form your LLP, that is, a limited liability partnership, you will be required to discuss things like this yearly and to record them in your yearly meeting minutes. Be sure to include how you plan to reinvest in the business, how to pay off debt and how to pay yourselves. Fourth, agree on what will happen if there is something that you don't agree on. I know you guys are getting along just famously right now, but just in case, how will disagreements be handled? And in the event that you decide to end the partnership, how will it be divided? Also, it is a good idea to add in an quote exit strategy should you decide to sell out or in case somebody dies? This should all be discussed before you become partners.
Erin Olson:
And fifth, get that crap in writing period. If you can't afford to get a lawyer to drop a partnership agreement with all of your terms, write it all down and sign it in front of a notary public. Then both keep copies of this, as well as keep it with your articles of incorporation or your LLC later. Now, if you're already in business with a partner, here are some things that you should consider doing. If you don't have it in writing, put it in writing, okay, and if your partner is resistant to putting it in writing, that is a huge red flag. This is not something where you force your opinions on them. This is something to protect both of you. There should not be any hold up.
Erin Olson:
I would also suggest that you file to become an LLP. This does make bookkeeping a little bit different, but it removes some of the personal liability should something happen. Oh, and one more thing I would suggest that you see an estate planner and get a buy-sell agreement, wills and life insurance on each other. I know you don't want to think about all the bad things that might happen, but there is so much freedom in knowing that if something happens to either of you, the other one will be able to pay off any debt and still support their family by buying the shares of the business from the deceased spouse or kids. Guys, don't skip on this step, even though it's not fun, and don't put it off any longer. Another thing to do if you're already established as partners is to spend a few days yearly revisiting your vision and or goals for the business. It is a good idea to schedule and to dedicate focus to this.
Erin Olson:
In HX, we also agreed to meet every three years to determine if our lives, both personally and business-wise, were made better by our business and to make sure it was still worth it. Sometimes you can get so busy in the thick of running a business that you don't ever stop and actually consider if it's all worth it. Guys, I am serious about all these things. The only reason that I am doing this podcast is because I was able to sell my half of Haytix to my former business partner when things weren't good anymore. It made a difficult situation better because we had agreed to these things before a single cent was earned. Trust me, it could have ended a lot differently.
Erin Olson:
Like I said, partnerships are awesome until they aren't anymore, and I'm not the only one who has experienced this. I know a lot of people who've dealt with partnerships that fell apart. Just so you know, guys, I almost didn't do this podcast episode. I didn't want people to know the real truth about HX because we had a great partnership until we didn't. And when things started to fall apart, that's when we went back to our old agreements and that's how I am able to be here today to help teach you all of the lessons that I've learned in the businesses that I've run, and I'm not sure I'll ever have a business partner again. So putting in writing all of your agreements and safeguards can reduce the risk, the stress, and let you guys get to work and build that dream. When people ask me, if I had to do it all over again, would I still have a partner, the answer is yes, I would. We were the dream team. We both learned so much and taught each other so many things. There are some things that I would definitely do differently, but all in all, it was definitely worth it.
Erin Olson:
Well, guys, if you have a partner, I hope you listen to this together, plan for all of the possibilities and grow that business. If you don't have a partner but are considering one, be sure to find one that has a skill set that is complementary to yours and friends. Get everything in writing. I don't know if I can say it enough, but get it in writing. I hope that this helps you navigate partnerships in a way that everyone wins. If you know someone who is in a partnership or thinking about it, would you share this with them? Well, guys, that is what I've got for you today. Thank you so much for listening and I will see you next week on the Quality of Life podcast. See ya, thanks for listening to today's episode. Thank you. Together, we can improve all of our quality of life.