Honest communication with your business partner while things are going well can prevent disaster down the road.
On today’s episode of Business Lunch, co-hosts and business partners, Roland Frasier and Ryan Deiss, talk about something they hope their listeners will never experience in their business: mutiny in the ranks.
They discuss the three biggest challenges co-founders face and how to proactively avoid them and ensure the success of your company.
They also share two big things businesses can do RIGHT NOW if they want to grow:
- Implement an operating system that will give you more free time as you scale. Find out more about the Scalable OS Accelerator here.
- Take your business partner (or your whole team) to Traffic & Conversion Summit LIVE in San Diego, CA on September 13th-15th.
Great Jones is a direct-to-consumer cookware company that has become really popular the past few years, especially among the Instagram crowd. Two women, who were great friends in college, went off to start their own careers. One was a designer and understood branding and social; the other was more of an operations person.
Then they decided to combine their talents and started a company together. They were great at PR, and everything looked perfect, but behind the scenes, it was a mess. One cofounder pushed the other out, but the one who got pushed out had a better relationship with the team, so the whole team walked.
Roland and Ryan know it’s not always as cut and dry as good person/bad person. Ryan and his former partner, Perry, had ideological differences. Ryan thought Perry was a jerk, but now realizes he had to own his part.
Generally, Roland and Ryan agree, but sometimes they don’t. So, how do they ensure disagreements don’t lead to infighting?
First, be careful who you go into business with. Don’t go into business with someone with ideological differences just because you’re friends. If one of you wants to do good, and one of you just wants to make money, it will be hard to work together.
Make sure your values align. Take an honest look at your work ethic, finances, family values. Are you workaholics or do you take vacations? Do you want to take money out of the company or leave it in?
They recommend grabbing a long-form partnership agreement from LegalZoom and taking a look at questions like these:
- What happens if one of us wants to leave?
- What happens if we need more money in the company?
- What happens if we get deadlocked?
Ideally, you want partners with complementary skills so there can be clear divisions of labor. You each play different roles in the company. But you’ll still have to communicate.
Roland is a huge believer in consensus. If he wants to do something and Ryan doesn’t, but Ryan decides to disagree and commit, as far as the rest of the team is concerned, Ryan is all in. Just like there have been times when Roland doesn’t agree, but he goes along with it anyway.
Bottom line: they put on a united front for the team. “We don’t fight in front of the kids,” they say.
The Business Insider article about the Great Jones mutiny addressed three big challenges these business partners didn’t handle well.
When one of the team members wasn’t doing their job, one of the cofounders had to pick up the slack, and they started getting resentful about it.
One of the partners wanted to pursue profitability, and the other wanted to shoot the moon. Unicorn or die.
This is a recipe for bitterness and resentment, not to mention that having multiple faces of your business makes it stronger.
What relief valves can you put in place for potential resentment? “Let’s have a conversation now about all the ways we might piss each other off,” Roland and Ryan say.
They suggest sitting down with your partner and your favorite adult beverage, setting aside a couple hours. “It’s therapeutic and oddly fun.”
What do you talk about? Money and time are biggies. Maybe it takes you 20 hours a week to get your job done, and it takes your partner 80. You need to have a conversation about that. Are you focused on equal time commitment or getting things done?
One huge question to ask is: “What does it look like for us to get divorced?”
It feels counterintuitive to ask this when things are going well, but it’s actually the best time. Address those tough things now while you have good emotional capital with each other, before something gets out of control.
Have these conversations regularly-on good days. Don’t wait to have them when your money is almost gone or resentment is already festering. It’s like this: “Because things are so awesome, I think we need to have a conversation about what it will look like if things get less awesome.”
It’s an imperfect world, and we’re all imperfect people. But honest communication means two imperfect people can run an awesome company together for a long time.
Roland’s EPIC Challenge.
You may have heard about Roland’s EPIC challenge, which he moved online when the Pandemic hit. It focuses on Ethical Profits In Times of Crisis and dives into no-money out-of-pocket business acquisition strategies. If you’re interested in finding out more about this strategy, click here.
Contact & Follow Roland
Through his Website.
Contact and Follow Ryan Deiss
Through his Website.