Bedros Keuilian Podcast Show - How to Choose the Right Partner to Maximize Your Business - 013

Episode Date: September 20, 2017

When you’re looking for a business partner, you’re essentially looking for a marriage. And you wouldn’t invest your life in some total stranger, would you? Many people make the mistake of rushing into a partnership with someone who ends up bringing the business down. Listen to Bedros Keuilian and Craig Ballantyne talk about the importance of choosing a business partner who you’ve built a strong foundation of trust with, and shares your vision for your company’s future.   Here’s what you’ll discover:   1:09 - Why it’s important to really know a person before you start a business partnership to avoid potential turmoil 4:30 - How choosing a partner with different strengths and weaknesses from your own will strengthen your business 7:18 - How Bedros and Craig’s past failed business partnerships taught them how to improve their future, successful partnerships 10:20 - How creating a 50/50 partnership can save you from disaster and resentment 13:17 - How to dissolve a partnership without losing friendships or destroying the business

Where partnerships are concerned, now it doesn't matter if it's a 20%, 80% or 50-50. If you're a business partner with someone, I believe, and I feel like wholeheartedly here, that you have to work like you own 100% of the business. Hey, friends, welcome to another episode of the Empire podcast. This is Craig Ballanty. My name is Bedros Kulian, and today we're going to talk about the thing that we are, which is partners and partnerships. What do you say, Craigie?

We are definitely partners. We are definitely partners. So, so let's get this thing started. Since, what is it, 2010, 2011. Yeah, you and I. 2010, late 2009 even. Got it. Late 2009, you and I became business partners in the Info Mastermind Group.

And since then, we've become business partners and other ventures. And we've had a great working relationship, a great brotherhood, and everything's been hunky-dory. But as you know and I know, most partnerships tend to not work out. So why don't we take a deep dive into partnerships, what they're all about, what the benefits are, and what one should do if they're thinking of going into one. So, why is going to be the good, bad and ugly of partnerships? Because it can get even worse than ugly. Yeah.

All right. So I think one of the most important things is that you, first of all, have to know the person pretty well. Because that's the problem. People jump into partnerships, whether they're business or love partnerships, way too fast. And there's a lot of analogies and similarities here. But it's just, you know, if you don't know how someone's going to respond under stress as a business partner, or in a relationship, you get surprised pretty quickly, and that's where things get sour.

And you make a really good point, because if you don't know the person really well, if they just come to you and you maybe know their reputation in the industry, and so you think you're just going to do business with that person, the reality is you're going to do business with their addictions, you're going to be doing business with their spouse, with their boyfriend's girlfriends, with their stepchildren. You are basically in...

With their past? With their past, with a lot of things, a lot of best. It is like coming into another marriage almost. And so where partnerships are concerned, many people are under the impression that all I have to do is find someone who's good at something. But in reality, they come with a lot of baggage just like you and I do. And if that baggage isn't favorable or isn't something that you're willing to work with, it's not going to work out so well.

So what would you recommend? I mean, I'm going to say that yes, you should talk to a whole bunch of other people and have those uncomfortable conversations like, hey, I'm thinking of partnering up with Bobby. I'm going to go to, you know, anybody that's ever worked with Bobby in the past, see what it was like. I know that that's not something that most people want to talk about, but listen, that's an adult conversation that you need to have. Sure. What would you do? Well, I mean, I would do. Now, when I first did it, when we first did it, it was accidental. But when I always think about our partnership, we knew each other for two years beforehand. So I would say at least get to know the person on a working level beforehand for two years. And during those two years, we spent three, times a year to two whole days together right I mean I would get to see the good bad and the ugly after spending 10 12 hour days with you and then one gets to make a decision you get to decide gee do I like working with bedros and the way he is and I get to say do I like working with Craig and in addition to that going back to exactly what you said is you go back to people and you talk to them about how is this

person as a business partner do they have follow-through are they going to promise a unicorn and deliver a donkey or not right those are the things that really matter before the partnership and quite honestly when a partnership is starting you really want to look at what value does that other person bring i always look at it as okay i've got this like when you and i started um i knew that i want to create the info mastermind group yep but at the time i was coaching and consulting personal trainers and while i had an info business of my own i didn't really have any other people that i was consulting in the info space there were mostly brick and mortar owners yeah you were one of the few clients that i had at the time who had a online

info business. And so after those two years and I talked to my wife about this and I said, hey, you know, seeing how disciplined and structured he is and I give him marching orders and he does it and he goes, what next? I think I want to partner with him because the value he brings is he's connected to others in the info space where I wasn't. Yeah. And to me, that was great value. Do I want to invest the time to be connected or do I want to just buy the time by giving you half the money of the business and being connected through all those people in the infospace through you? Yeah, absolutely. And that kind of plays into the next thing that I would recommend, which is find someone who is strong where you are weak, and whether it is in assets,

which you just described there, but also in habits and strengths, you know, performance-wise. So, you know, we've kind of melded together a lot over the years, but back in the day, you were much more, you know, you're extroverted, you're a great salesperson, you're awesome on stage, you're, you know, California cool, getting the people in. And, you know, I was a little bit more functional in the, you know, certain disciplines of how to build an online business. But even then, you have the traffic buying experience and then we're both, you know, bring different values in terms of video delivery and content creation. But there was definitely, you know, you were here and I was here and together we were able to have strengths in almost every area because of our

combined strengths. Yeah, yeah, that's a really good point. And I knew right away that I had the infrastructure where we can buy the traffic and we can close them, get them into the mastermind. But I needed the expertise to be partnered with me because basically I was buying his expertise. So I helped him grow his business and then through by helping you grow your business further and you being so well connected, you brought so many people into that mastermind that we otherwise couldn't have gotten. And so you really have to you weigh it out. What are my strengths and competencies and what are the strengths and competencies of my potential business partner? And by the way, don't think that you go, oh, well, they can get better at those things that we need because likely if they're not good at it now, they're not going to become good later.

Yeah, absolutely. And so when you think about that, so let's be, you know, let's look at this kind of ruthlessly and you think, okay, you know, I've got all these skills and this is a business I want to grow. And I know this guy who has some of the skills that I don't have. You don't necessarily have to become a business partner with them, right? You can hire those things out. But I think a lot of people rush into that partnership because it's kind of like the lazy, easy way out because they do I think have that oh well they're going to get better they're going to do the work and it's almost like a taker relationship you got to

be going and like trying to out give your partner yeah you nailed it right there part of it is they think it's it's a lazy easy way of getting into business but the other part is most people starting out in a new venture are scared sure nervous insecure and so by getting a partner I can now mitigate that risk we're in it together right it's my lifeboat or right exactly or whatever I'm not looking for a buoy. I'm not looking for a life preserver. I'm looking for someone who can help me multiply the impact that I want to have financially

and through reach of people. And so if I don't have that, then I'm not going to partner with them. And like you said, if you have a very unique skill and I've got the money, maybe I'm better off just buying that skill or service from you versus partnering together. Yeah, absolutely. All right. So let's open the kimono here and talk about our failed partnerships because I think the reason why we have such a great partnership is because we've screwed up a few times in the past.

We failed forward, you know, learned our lessons. So I'll let you go first with what, you know, lessons did you learn through failed partnerships in the past that made all your future partnerships because you have many of them and many great relationships now. What did you learn and what did you apply? Well, two things right away I'm going to share with you is thing number one is you've got to have a partnership or an operating agreement, right? Not just a corporation agreement that, myself and Craig are partners in this corporation. Well, that's all fantastic, but that effectively says, here's one kitchen and Craig and I are both the chefs.

Well, at some point, someone has to be the chef, someone has to be the busman. And during another point, the other guy has to be the chef, depending on where we are in the journey of our business. And so you and I just organically know how to do that now, but I was in a partnership where we had no partnership agreement or an operating agreement. So both of us wanted to do the things that were fun

and exciting and sexy, and, And it seems like no one wanted to do the things that were gonna take all night and involve a lot of labor and a lot of brain power without much recognition. And so where that was concerned, that partnership didn't work out for me. I went into that partnership with my expectations of, hey, I'm gonna be the guy who is the face of the company

since I've been around in the industry longer and you be the person behind the scenes. But very quickly, that particular partner that I had said, you know what, I think I wanna be the face of the company as well. I wanna stand on the stage. And I have no ego. It wasn't an ego thing.

It's just if we're both standing on the stage, being the face of a company, who's back there doing the work? Right. So I had the ability to drive traffic, communicate with the community that we're in, et cetera, and then move people for him to do his thing, but he wasn't there doing it. I think a lot of people are scared to do that because that's a difficult conversation. Sure. Absolutely.

But again, you're getting into a business partnership. You are essentially getting married. And so you have to look at it as seriously. as that. So go ahead, keep going. And so where a partnership or operating agreement is concerned, it simply says that Bedros is going to do X, Y, and Z, and these are his expectations in this partnership, and Craig is going to do A, B, C, and these are his expectations in this partnership. Is there going to be overlap? Absolutely. Are there going to be additional things that you need to do or that I need to do? Of course. But there's a core foundation and expectations. And that's the

ugly conversation and documentation that has to get done once, and then you guys put it away, and you never, in a perfect world, you never have to think about it again. And where partnerships are concerned, we might as well talk about this now, I believe there's no fairer partnerships than 50-50. Sure. Because sooner or later, someone is going to have resentment. So if it's going to be anything other than 50-50, if you've got any number other than 50-50 in your mind, and there are some rare exceptions, but sooner or later someone's going to

have resentment and that typically unfolds in a very ugly way. Is there any examples that you might be able to give, Craigie? Oh, man, all the time. So I know a couple people right now who have an ugly partnership because it's a 10% difference in what they have, you know, 6040. So it's gone from 50-50 to 60-40. And there is that, hey, you know, I'm doing just as much work. Or, you know, now you're putting the scorecard against your partner and it's become adversarial.

And that's the worst thing that you can have in a partnership. It's like if you were, you know, dating a girl and you were saying, then she came to you and said, oh, you haven't taken out the garbage this week. Well, you know, you didn't, you know, wash the clothes this week. oh my goodness, you can just see how that is going to unravel into, you know, bad, bad relationship squabbles, which is going to entirely blow the thing up. So I think you're going down the right path there, 50-50 unless it is very clearly outlined in the operating agreement that maybe one person is bringing the cash plus the skills to grow the business or one person

is bringing a team or bringing assets. Maybe we can do okay with a non-50-50 if it is clearly communicated and the expectations are clearly communicated as well. That might be an exception of the rule. But it really, I mean, communication is almost the entire partnership. And I'll give a great example of that. Right now, I actually just took equity in a company and I have 20% equity in that. I have the minority share equity in that company. However, the brand has been around for a while. It's already been making money. A lot of the things that need to get done are already getting done. And my scope of practice is so unique and specialized that I'm bringing in. The value that I'm bringing is so unique and specialized, that it only warrants me to work there or work with that company

maybe once a week for four hours at a time. And other than that, I can literally be detached because I'm putting the right people in there to oversee. So I will give action and marching orders, and then the people within that company will lead the charge. And so that justifies 20%. My scope is very narrow in its practice, and I'm okay with it. But like you said, it's a very clear conversation that myself and that partner had going

into this and the expectations are already set and I'm very fine with that. And so where partnerships are concerned, now it doesn't matter if it's a 20%, 80% or 50-50, if you're a business partner with someone, I believe, and I feel like wholeheartedly here, that you have to work like you own 100% of the business. And the reality of this is that that partnership that I just talked about where I own 20% equity, if the time came where I had to just commit five days a week for a long period of time because we have to get lift off on this thing, and then guess what? I'm not going to ask for extra equity.

I'm just going to commit and do the work because that's what I've agreed to and the outcome will pay off. Or at least later, down the line, once I've produced the outcome, I can go back and say, hey, look, I've been operating out of my scope for a very long time. And it seems, for the foreseeable future, I'll be operating out of my scope. So what do you say we renegotiate? But I won't go in there with the expectations that I'll get what I want, but I'll go in there looking for what I want because I've actually set the expectations first. Yeah, absolutely. So again, it's communication. Communication on, first of all, the roles, communication on the split, communication on the vision for the company, communication on all of that is so important. Let's talk about communication in a really, really ugly part of partnerships, which is dissolving one. How do you dissolve a partnership? While still maintaining friendships, because most people are starting businesses with friends, which can be tricky. So how do you stay friends with somebody, or how do you at least dissolve the company so that, company doesn't blow up, nobody gets hurt, including the employees. So let's talk about that. That's an important part. Yeah, so you and I have a friend. He's a great copywriter, and he also

works in the supplement space. And recently he and his partner of a long time, and they were very dear close friends, had to split up. And the company did just over $20 million a year. And so they did something very smart. They knew that they wanted to end this partnership in a kind and gentle way, where if they saw each other at an industry event, it wouldn't be adversarial it wouldn't be I'm gonna go turn around the corner and hide until he walks away and so each person hired someone and so this person that I'm talking about hired me to negotiate on his behalf the dissolving of the company okay and so oftentimes one first of all if you have that partnership or

operating agreement that I talked about it needs to be written in there that if we have to dissolve our relationship here's the steps that we're gonna go through it might be mediation it might be it might be going to the company attorney they're going to the company accountant who can mediate the process and it shouldn't take more than 30 days 60 days 90 days even a time frame right so it needs to be written in there now if you don't have a partnership agreement by the way or an operating agreement it's not too late to start one sit with your partner and an attorney and create an operating

agreement a partnership agreement and put that that little statement there that says how we're going to dissolve if we need to dissolve so those two things are really important so you might want to first have it written down somewhere and number two have others negotiate on your behalf so that all emotions are taken out because there is a lot of emotional turmoil just under the surface because if I'm mad at you about 10% it may not be the 10% it might be that you didn't meet my expectations or I didn't get a thank you when I think I did something extraordinary and I've been holding on to that for a very long time and now it's gotten toxic and it's festering

yeah that's absolutely another parallel with you know love relationship so there's so much going on here in a partnership that it's just parallel to a love relationship and I think for me, there's going to be three keys and I'll let you add on any of you have any addition to it. So it's communication. Communication, communication is the first one for sure. Second of all, treating this very adult-like, having those uncomfortable adult conversations, realizing that what you're getting into here is long-term. It's not something you can just jump in and out of. If you're getting into business partnership, take it seriously. And third, and this is tough for most people to hear, patience. Patience. You can't rush into one. You can't rush out of one. You

to be in this for the long haul and you have to get into it slowly in order for it to be successful in my opinion. So those are my three things. So I'm going to add two more things to that and that is document everything. Document the expectations when you're going into a partnership if you believe that you need to be in a partnership. Because we talk about that. You can rent the work, you can hire the work, you can outsource the work. There's many things you can do if you don't want to bring on a partner. But document everything.

Have a partnership operating agreement that even states what happens if we need to dissolve. Number two, whether you own 1% or 50% of the company, work like you own 100% of the company and you are the sole owner and outwork your partner. And I think one place that you and I shine is we consistently outwork each other in our mastermind where I see how you are in there always coaching our coaching clients in between the mastermind meetings. And I'm always working on driving the traffic and filling up the masterminds with new members so that they can continue to grow and scale and have a bigger impact.

And as long as I do that and you do work on the retention piece, we're both out working each other. I've got no complaints, man. It's good to go. We're happy. Yeah, absolutely. I think maybe one last thing is I just always look at it is I'm grateful for the partnership that, you know, if anything started to go sour, I just would still just be looking at it on a positive thing because this has been a wonderful experience and you're a great partner, my good friend. Thanks, man. You too.

You are the best. Bye, friends. Thanks for listening to the Empire Podcast Show. Remember to subscribe on iTunes, share it with your friends, and give us a rating. We'd really appreciate that. And make sure to go to empirepodcastshow.com to watch the videos as they come out.