Business Partnerships: The Good, The Bad and More! DBA Small Business Show 16

Greetings, folks, and welcome to the DBA show, the Small Business show, episode number 16. Here in Durham, New Hampshire, I'm Dave Hamilton.

And in Lafayette, California, I'm Shannon Jean.

How you doing, Shannon? I'm good, man.

Yeah, I'm doing just as well.

Good.

I'm kind of liking this evening thing. It's kind of nice.

That's right. We're recording in the evening. You folks listening could care less when we recorded this.

Yes, that's right.

But, yeah, I had a long day today, so we're recording in the evening. Which, which, yeah, I like the evening recordings, too. I've. I've had some issues with them in the past with other podcasts, but it's all fine. It's for this one. I think it's great.

Yeah, yeah, I do too. I think it's good. So today, you know, we're. We actually had an interview scheduled, but we had a. Had to reschedule that with our interviewee. I, I almost thought we should just talk about backup plans. I thought that would have been a good segue into having a backup plan. But. But anyway, we had this partnership topic on the agenda that we brought up a few weeks ago, and so we're going to talk about partnerships. And I mentioned before we get started, we. I think we could also label the show, you know, the Good, the bad and the ugly about partnerships.

Yeah. Although my only problem with that label is it's two thirds, you know, negative.

Yeah, that is true.

And I'm. I'm going to be interested to see where we both fall on this, say, 30 minutes from now, whether, whether we agree that partnerships are two thirds. So I'll leave it at that.

Yeah, yeah. And I think that is probably prefaced on the, on the, on the concept of how you structure and how you begin the partnership.

So we're talking, we're gonna, we're talking here, at least initially, not about corporate structure and whether you should have an LLC or a C corp or a partnership with it. You file a K1 or any of that. We're talking about whether you should have a. Or. Or what the, what the. What the impact is of having someone that is actually truly a partner in your business in some way.

Yeah. I mean, you can have.

Either officially or not.

Yeah, yeah, that's correct. And, and whether it, you know, you're gonna be an LLC or an S corp or whatever it is gonna be. And we can talk about that structure sometime, too. But if. Do you have someone you are starting this business or running your current business? With.

Yeah. So you have, you have done, you have done things both ways, I believe. Correct, Shannon? You've done businesses with partners that I know, because we've done one together, and here we are in a second doing one now.

Yeah, that's right.

Yep. But I, I think you've run. Have you run. I know your, your current tech restore business, at least I believe. Do you, do you have a partner with that?

I do have a part.

Okay. Yeah.

Yeah. I love having a partner. And I again, prefaced on. Because the, the partners that I have now, guys like you and Bucky, my other partner. Okay. And a few, you know, we have another company that I have a partner into. We have all maybe one of the most important things. We all have similar goals. And when you're setting up a partnership, that's really one of the things you want to ask yourself, you know, and there's, there's so many positive things about a partnership. And for me, I'm, I'm, I will say I really am better with a partner. We were talking about our lovely wives earlier here this evening, and it's kind of the same thing at home. You know, different people bring different things to the equation. And I have been very fortunate to always find people that can help offset what my weaknesses are. And I have tons of those weaknesses. And I'm not good at many, many things. And also one of the things that I really like about having a partner, maybe, maybe the number one thing is it, it helps to keep me accountable. And we talked about, I think I maybe mentioned this metaphor before about the guys that go to the gym, and when they leave, they hand each other their gym bags so that the next day, hey, I gotta go back to the gym because I've got Bob's bag, you know, that kind of thing. And for me, it's been that way with businesses over the years that I've just performed better when I knew there's someone else, someone else there that's relying on me, not just employees, not just that kind of thing. And so for the most part, it's been positive. I have had some negative partnerships as well. And I have had a lot of opportunities to start businesses with people that wanted to start businesses with me and, and, or I've wanted to start businesses with them that we've never brought it to fruition. And thankfully, so, because I feel it could have been a real negative partnership experience.

Yeah, I, that, that makes sense. I, I, I have, I have similar feelings. I have obviously very much enjoyed having a partner in almost everything I've done. And you know, partners, it's important, I think, to find a partner that is going to actually serve and fill in, like you said, that the holes or the things that maybe you could do them but that you aren't best at, that you wouldn't naturally do.

That's right.

And if you can find that fit and it's, it's rare, it's certainly possible, it's rare that it's going to be a perfect fit where, you know, you each just totally complement each other. But if you can get close that it, it makes a huge difference because there's, you know, you're both at some level and of course, you know, again, you know, taking, keeping corporate structure at least at arm's length for this discussion. You know, in theory you might be 50, 50, you might not be. Right. It might be, yeah, you never know. Right?

That's right. That's right.

But whoever the partners are, are going to feel the reason you're a partner in a business and you're putting in, presumably putting in sweat equity and all of that is, is that you enjoy at some level the mania of owning a business. Right.

You know, hopefully you do enjoy that. Yeah, yeah, for sure. And, and I could say, you know, you do probably the, maybe the first thing you need to do is recognize what those weaknesses are either in yourself or in, okay, let's say you have this concept and I can use an example. When Dave, when I wanted to start a website that published stuff and we were talking about, you know, deals on the web and things I can remember, I think I reached out and talked to one of your sales rep guys because I knew absolutely nothing about the publishing business and the web business. I knew about the deals.

Right.

And, and that's what I was always excited about. And I knew, okay, great, let's talk about deals and stuff. But the first thing I, you know, well, you know, sitting down and saying, okay, what don't I know? Who, who knows this stuff? And I was being, you know, backbeat media was handling some of our advertising stuff. And I said, oh, let me talk to these guys. So. And that led to you because you're, I believe one of backbeat reps said, oh, well, Dave is the guy you really should talk to. Which led to, you know, decades long partnership.

Yeah.

And I think that is, that's what would behoove you to do first on a personal level and even on the, on the business level is, okay, well, what do I need help with and who has that knowledge or that skill and how can I approach them? Because we didn't know each other at all.

Not even a little bit.

I mean, I'm not even sure of each other. Yeah, we. Yeah, I mean, I was your client and I, you know, but we may have talked a little bit, but I.

Don'T even think we had, to be honest.

Maybe not. Maybe not. And I think that the, you know, the first thing you need, if you're. If you're getting started or you're in a business and you're thinking about bringing a partner on. You know, we spent a lot of time talking, and I think it may have been one of the first businesses when I was looking for a partner that I rolled out and what I always call, you know, a working agreement. And it's not a partnership. It's not a partnership agreement or a contract. You know, I don't believe those kinds of things are hugely necessary and. Or enforceable. And if you have to think of them like that, maybe that's not the person you should be in business with anyway.

Yeah. Yeah, absolutely. Yep.

And so. So, you know, and I'm kind of skipping ahead a little bit, but. But I want to stick with this, the streamline, because we did it, and I think it was successful and it worked. So, you know, we came up with this working agreement that. That did a few things. It identified, you know, what is it that we were trying to do, what the goals are, making sure we had the same goals. So we, you know, we laid it out on paper. You know, just a word, doc. Certain structure. Hey, here's what. Here's what we want to try to do. Here's what the goals of the business are going to be. And one of the things that's, I think, really important how you're going to measure success, because everybody has different ideas of what that success is. And, you know, we've talked about this before as well. Is it all just monetary or is it, you know, if you have one person that says, well, I measure success by the. By working the least amount of hours possible, and the other person says, well, I want to make as much money as possible. Well, you're gonna have. You're gonna have a problem.

You might. Yeah, you might have a problem.

Yeah, you might. You might have a problem there.

I remember that process. I had actually forgotten about it, to be honest. But, but. But as soon as you. You brought it up, I remembered it. And it's interesting because we weren't just two guys. You know, that was a weird. To me, that was a weird start to a partnership. Obviously, it was a very good one and perhaps one of the better ways to start a partnership. Most of the time, it seems like partnerships happen one of two ways. Either two friends are sitting down with a beer and say, I have a great idea, or, you know, the stupid idea comes out and you sort of polish it up a little bit and you're like, actually, that's not that stupid. Stupid. You know, we. We could do something with that. I know how to do this, you know how to do that. And then the partnership is sort of born. And. And that agreement. Or agreement's the wrong term. Right. But that. That outline doesn't get written as early as. As it. As it certainly did in our case. And probably. And probably not as early as it should. Right.

And. And I think your example is more common, and it's kind of like partnership by default.

Well, it's either that or it's two people in business together that wind up working together a lot. And suddenly, again, I mean, it's. It's probably not all that different than the two buddies sitting down having a beer, but it's, you know, two people that interact a lot and say, hey, wait a minute. You know, you've got these skills. I have these skills. We should work together. Whereas what. What happened with. With deals on the web was we were two people that. We respected each other. We knew each other enough to respect each other and perhaps a little bit more, but. But not much.

That was it. Yeah.

You know, I mean, I'm pretty sure the first time I talked to you, we may have shared an email or two if I thanked you for being a client. Right. But sure, the first time we talked was about this, and it was, you know, you know, there's a little dance we went through about. But it was all part of this thing of, okay, well, here's this idea you came to. To me with, and it was, okay, how can we do this? All right, wait, what are we talking about here? Are you just asking me for advice or do you want to do this together?

You know, that's right. And that's very important. You know, and the example that you, you know, the, the two guys over a beer, you know, that. That's happened to me as well, and it. It worked out great. I would say that comment that I made about, you know, making sure you have shared goals, that changes over time. That can change over time, and it's. It's important to revisit, I think, with your partner over time, gee, you know, what direction the business is Going in, are your goals still the same? And you know, is the goal of the company still the same? Because I think that is. Well, that and money and are very, very common things that can cause a partnership to go bad.

Yeah, yeah, it's true. I mean, and people, people don't change a whole lot, I don't think. But certainly our circumstances change pretty rapidly throughout our lives. And if you take two people that, yes, are involved in business but otherwise lead separate lives over a five year or certainly a ten year span, I mean, you can find yourselves in radically different places. Yeah, that's right. Yeah, yeah.

And, you know, I can tell you a story. And I had a guy I started one of my first businesses with and it was pretty successful. And you know, this guy was awesome. He was very trustworthy, he was much smarter than I was. And one of the weaknesses I had was I didn't have any money. You know, I was in college. And this guy had a credit card with a $10,000 line of credit. You know, so it was another, you know, positive in the column of hey, let's start a business. And he was willing to risk it, which was awesome. And I, and I respected that a lot. And you know, we, we had the same goals then and we ran this business and did all this stuff. And then it, you know, came a time where things were, you know, things good things don't always go up in business. You know, people are sometimes surprised to hear it's something bad. It's up and down and up and down, especially people that aren't in business, you know, and you have good years and bad years. And we were going through a challenging time. I can recall, I never will forget, you know, this conversation. And I had a conversation the night before with my wife, telling her, hey, I'm really going to have to start putting in more hours because we're having some problems and the market is such and this and that and I won't go into specifics, but it was just like, hey, I'm really going to have to knuckle down to sure to get, get this thing back on its feet. And the next day my partner, who I love, this guy came in my office, sat down, said, hey, I want to have a talk with you. I said, okay, great. He says, you know, I'm at a point in my life where I really would like to start spending some time away from the business. So I'm thinking, I'm not going to come in on Fridays.

Wow.

And it was now that's fine conversation.

Totally. Yeah. That. That. That's a normal thing for one partner to present to the other problem. Yep.

Yeah. And you work it out, but it was just impeccable timing, and. And it stuck with me. And that's why I always come back to, what are your goals and what do you want out of the business? And this and that. And it was. It was the beginning of the end for us, unfortunately.

Yeah, it sounds like it would have been.

It really was. And to not make a hugely long story maybe a little shorter, but we wound up, you know, merging with another company and doing some other things like that and this. Unfortunately, this guy's strengths got kind of absorbed in this other entity that we merged with. And what I thought was an awesome opportunity that we had to. To kind of reinvent our jobs, which I love. That thing really petrified him and made the guy miserable. And so we, you know, we worked out an amicable parting, but he just. It just wouldn't work. So, you know, constantly reassessing where you're at with your business and with your partner, whether it's a partner by default, whether it's your buddy, you know, kind of things. I mean, it's a marriage. And, you know, we. Dave, you and I, we talk all the time. Is that the direction you want to go in and not. Not be afraid to. To say no and disagree and be really, really, really honest and be able to communicate like that? I think is the foundation of having a successful partnership.

Yeah. I think if someone that had never owned a business or certainly had never had a partner was a fly on the wall for a lot of those kinds of conversations. And, you know, it's important to note a lot of times, at least for me, with a business partnership, you know, you have. There are these moments where you. These pivotal moments where you have these partnership conversations. Right. About the business and the direction of things and all that. But these aren't daily events.

No.

Most of the time, you're just doing what needs to be done. And sometimes, in fact, most of the time, especially early on, you're making things up as you go along, and both partners are doing that. So there's a level of trust there, but you're not consulting with each other on. On the minutiae of every decision, even though it could be argued that. That from. From an outsider standpoint, it could be argued that you should, like, holy crap. You did that without your partner knowing? Well, yeah, but, I mean, we got to just get it done. So I did it.

Yeah, that's right.

But if someone were a Fly on the wall for those partnership conversations, which might happen, you know, I think frequently, might even be once a month. Right? You know, it could be. And in some businesses, you know, might be infrequently and once a quarter kind of thing. I mean, it depends on where you are with things and all of that. Certainly with a startup, early, early stages, it might be once a week. But if you're doing it more than that, you're not getting anything done. You're just kind of constantly reinventing the business because that's what those conversations become. But if you're doing it right, I think the fly on the wall would think that these two people having this conversation are probably at the brink of, of, of, of completely unraveling the whole thing. Because like you said, you've got this honesty and you've just got to be able to say, well, I think this is, we tried this, this worked really well. This was stupid. And sometimes you're both going to be in agreement on it and then it won't seem like it's unraveling. But a lot of, you know, you, you do that because you have been operating sort of in parallel, but separately, and then you come together and you're like, oh, hey, all right, we got to sync up again. And those conversations, I don't want to say they can, they can get heated, but they certainly can. But they can.

Yeah, yeah, yeah, yeah.

And in a good way.

Yeah, in a good way, because you're getting it all out there. And I think in a, in a good partnership, what happens is, you know, you recognize the things that are happening or that your partner is doing or taking care of and all that minutiae, like things that you mentioned, they kind of fall by the wayside because you, you know that things are going to get taken care of. You, you, if you're doing this kind of partnership by default, it often just works its way out on who does, you know, what. You know, I was always like a sales deal guy and I'm always trying to find people that are, you know, good at accounting and good at infrastructure and logistics, those kinds of stuff. You know, it's great and you know, good signs that, that things are working out is when you don't have to worry about that stuff quite as much.

Right.

And, and, and then you, you know, then if your, your partner who doesn't want to work Fridays, well, that's not a big deal. This Guy's working till 10 o' clock every night. You know, whatever's getting it done, you.

Know, what Do I care?

Yeah, that's right. And, and it just get, you know, those kinds of things and you don't keep track of it. But if, you know, one partner is constantly working, you know, 60 hours a week and one guy's working, you know, 30, well, that can eventually quite quickly lead to some animosity and you need to be able to have those discussions. And I've found that when those discussions live in the working agreement and the ex. What are your expectations? It's awesome. And you know, you don't often have the luxury of setting that up from the beginning. I totally get it.

Well, you just don't think about it that, right. That early on, I mean, that's, that's.

The issue is, I mean, too excited about everything else. Right.

For us, it made sense because it was, it was the only thing we had in common. I mean, we had a lot in common. We had interests and all of that. But, but it was, it was the only experience we had in common, right. Was creating this, this, this document together. But it, it, it worked because it allowed us to say, oh, wait, I'm not the right guy to do that.

You know, I don't know how to do that. I'm not going to do that. Who do we get to this? And I think it's also really good because oftentimes it's not just two people as a partner. It, it can, there can be a third party involved and that's great. And, and, and I actually really have liked that because it also, you know, you get the kind of tiebreaker, you know, if you will, and, and someone who can look at things a little bit from the outside and offer a different opinion on if you're really heated up over some with, with one person and, and you can, you can do that. Well, I, I like that a lot.

Yeah, yeah. It, it's what, one, one of the. And I'll, I'll use the Mac observer as an example here. But, but I've dealt with this in several other partnerships and in, even in rock bands that I've played in which have, you know, which are partnerships in themselves and.

Yeah, sure.

Quite dynamic because. Well, I mean, I could imagine, right. You're not only, I mean, in any business you're doing something that you're passionate about, but in a rock band, you're doing something all large, most of the time, at least at the scale I've done it. The only reason, or at least the main reason you're doing it is because you're passionate about it. The money is sometimes just not even expected and icing on the cake. Yeah. What's that?

Free beer?

Yes, it's free beer.

That's exactly another conversation. But.

Yeah, yeah, yeah, but that, you know, so. So that. That actually gets really interesting. But at. At the Mac Observer, I have one partner that Brian Chaffin. And. And he approached me early on because that's how partnerships work. Yeah, that seems obvious. But he approached me and said, look, there's this website going up for sale called Webintosh, and we should buy it. And we changed the name because the people selling it to us didn't own the domain name. Webintosh.com that's a whole other story, but it's an interesting story, but. So that's why it's not called Webintosh anymore. Also, I think the Mac observer certainly at the time was a better name, and even now is a better name, although there might even be a better name than that. But. So he came to me and he says, I want to do all the content, and I can, you know, manage the people to get the content up, but I'm really not the guy to think about how we pay for that, you know, how we. How we feel this thing. And. And I had been making some money and just sold my interest in a business that. I'm sure I'll tell this story before the show ends because that was another partnership that sort of unraveled. And he said, so, you know, can you, A, put in a little bit of money to get this thing off the ground and then B, make sure more money comes in so that we do this over time? And. And so we. We really did, and still to this day have very separate responsibilities at the company. But there are those partnership conversations where, you know, we drive the bus, right. And. And we steer the bus. But there have been times, and this is. This has gone back and forth. We've had that business 16 years. At any one time, it's not unlikely for one of us to not have our foot on the gas of the Mac Observer. It has happened. I understand, but the other guy has, you know, and maybe that's okay, right? It totally is okay. It works out fine. I mean, it's. It's interesting, but it creates some. Some very heated conversations, you know, in both directions.

You know, I'm sure.

I'm sure, you know, like, hey, wait a minute. You know, I've been really pushing this thing and this and that, but it's actually. There's the resentment. I say that. That's never actually been said nor I don't think has it been felt. It's more just, hey, you know what, what are you thinking here? You've, you know, you've, you've had your foot off the gas for a little while. You've been either focused on something, either your life, you know, and we've both been through massive life changes since we started the business. I've, you know, we've. There's been kids involved, there's been marriages, there's been divorces. Right. There's been relocations, all of it. And that's just life, let alone whatever happens work. Right.

Yeah. And, and hopefully you've. You build up this, you know, respect for your partner and you know, they're your go to person and you know, to where when that inevitably happens that they get distracted with something else, you're. Maybe you step in a little bit, take it to slack because it will become like you said, both. It goes both ways.

It's going to go both ways. And it totally. Yep.

Yeah. And yeah. And now when you guys set that up and started, was it. Did you really formalize a structure or was it like, hey, let's just, let's get this thing going and see what happens?

No, we formalized the structure. We knew each other certainly far better than, than you and I did. But. And I'd done some work for Brian that I never actually got paid for because his client never paid him. So. So, you know.

Yeah. That you guys had that shared experience.

We did, yeah. Yeah. I did some programming for him that just didn't get paid. And, and so, so yeah, there was, there was definitely a, you know, an experience together that it led to it, but it was all business. We were, we were friendly, but we weren't, you know, just hanging out all the time, going, having dinner, you know, it wasn't that kind of thing. Yep. So. So we, you know, but we worked it out. But it, it's interesting and I'm sure it will continue to happen as long as the business is. Is ours. That, you know, there's this shift that goes back and forth. Honestly, the hardest times are when we both have our feet on the gas at the same time.

That's interesting.

Yeah.

Because. Why, why is that?

Well, because when that ha. When, you know, if it's me that has my foot on the gas, not only am I thinking about all the things that I need to do, I'm thinking about at least some of the things that that live in his world.

The content side of things that should be getting done. Right.

Yeah, right. I mean, and that's, that's how it goes. If one guy lets up, you know, the other guy picks up the slack like you said, and, and then, you know, the reverse is true. Like, you know, okay, aren't evolving this, we aren't doing that. Okay. Yep. And, and when we're both in it, I, I, you know, there, yes, we have this line down the middle that, that we defined years and years ago, but it's, it, you know, the actual line moves and when we're both there, there's a little bit of a friction. Right. While we're both pushing on it. And, but it's okay. I mean, we've, we, we know each other really well and we've learned to identify friction. And not only have we learned to identify it, we've learned how the other guy deals with it and we're respectful of the process. That's great. Right?

You know, you just do it. That can be, yeah. And sometimes that can lead to very, you know, positive things that friction and push you in directions maybe you didn't think of going and that kind of thing. Okay, so, and I've got a question for you. Have you, so do you have a buy sell agreement or with your partnership?

Yeah, we do.

That's awesome. That's great. And I think we should talk about that a little bit.

Yeah, go ahead. Yeah.

A real important part of any partnership is talk about and it's not a great thing to talk about, but I mean, it's important. It's not the most comfortable thing to talk about. But what happens if something happens to one of the partners or one of the partners decides, I want to leave, you know, what is the, the mechanism for winding down this partnership and what happens? Or you know, I had the experience where one of my, you know, most long standing partners passed away and you know, I had buy sells with other partners and other businesses and different things. In this particular case, the disguise didn't believe in him. It's like, oh, we'll work it out if everything happens, no big deal. And, and yeah, and it can, you know, lead to some really sticky stuff because essentially you become, you are immediately in business with his heirs, their spouse or his kids or whatever. So you own this company now with these totally maybe wonderful people, not the.

People you chose to be partners with.

That's right. And I will guarantee you those people have different goals than your partner. Oh, yeah, absolutely. No question. So, you know, buy sell part of your agreement can be part of this working agreement. You know, it's just kind of mapping this out. There's tons of templates online. If you go to Legal Zoom or any of those, you could can, you know, download, buy, sell agreements. You can have, you know, if you have an attorney, you can have one write them up. Although it'd be more expensive.

Yeah, it's probably. Even if you have an attorney, unless you have an attorney that's that you really trust and you have the extra money to pay them to do this, you know, you're going to need to be guided through the process because there is not. It's not like, you know, with a will, you can write up a will pretty cheaply because it's a pretty straightforward thing. You know, you list your assets and what you're going to do with them when you're not there to have them anymore. Right. You know.

Yep.

It's pretty straightforward. And that's why wills are pretty cheap to get done. But a buy sell thing, you've got to go and look at 20 of them or 10 of them or at least 5 of them and say, oh, that's interesting. I wouldn't have thought of that. I wouldn't have thought of that. And then you kind of have to come into the attorney. The attorney can, can make sure that it legally will stand up at least as well as any document can. But you need to know what you want it to. To accomplish. Because everybody's different.

That's right. And how it's going to be interpreted. Right.

Yeah.

Because that's really critical, as you may see it some way and what's worked well for me in the past, if, like, I'm going to use a legal zoom example again, but if I got a document from them, I will send it to my attorney and say, hey, what do you think? Is this thing worthwhile? Can we do it? And oftentimes if he's busy tied up, say, oh, yeah, this is fine, or hey, this is a, a good boilerplate thing, but we need to add, we need to meet and talk and put an addendum in place so that, you know, there's these specific issues taken care of at the, on the backside or whatever.

Yep.

And you know, the other issue to talk about is, and we were going to, maybe we'll still do a whole show on, you know, part of the show anyway, on insurance and things like that is key man insurance. And that is often a very good vehicle to buy out those heirs or spouse kids that you are instantly in business with. And you can fund that with the insurance policy that you carry on each key Partner.

Yeah. Essentially what, what key man insurance is, is you and your partner each taking out or partners each taking out a life insurance policy on the other with you being the beneficiary of that policy. And in theory, the policy pays out enough to allow you to buy the partner's heirs out of the agreement.

Correct.

And you can, but you get with an accountant, though, because you can set this up in a way, if it actually works that way. What happens is you get the money free, tax free, because it's an insurance payment. And now you're buying out your partner's heirs and there's a huge tax burden that they will inherit that way. If you set it up right, it's possible to avoid a sick. For them to avoid a significant chunk of those taxes.

Yeah. You definitely want to have some guidance because as Dave says, there's some what seem like little things that can dramatically impact your tax liability as well as the heirs that are going to, you know, wind up getting the money.

Yeah. Oftentimes they, if you do it right, the heirs make out way better than they would have if you just bought them out with cash. But it's fine. I mean, you get, you wind up with the business. And that's the important part is.

Yes.

You know, that you're not in business with someone else and you know, you don't have to buy an air out entirely. Right. You know, all you need to make sure is you have a majority share and then, I mean, you still have to give profits out and you've got somebody sniffing around all the time.

That's right.

But, but it may be that, you know, the cost of an insurance policy for the business is just too large or doesn't make sense. The insurance policy you bought 10 years ago doesn't cover what the business is worth today when you need it.

So, so, so. Okay, so let's talk about that for a second. Who decides what the business is worth?

See that. I think, I think we should. I think let's table the insurance thing.

Yeah.

Because that's a whole other discussion and I, and I want to stick with the partnership thing.

If you don't think that's great. Okay. Yeah, no, no, I know that's good. I'll put it on my show notes.

Yeah. I, I have been through two partnerships where the business continued, but the, the part. But the partnership split up.

Okay.

And, and you've been through at least one where your, your partner passed away. Have you been through any others or is that just the one?

Okay. That's the only One where the. Yeah, I mean, I had another. Like the example these earlier, where partners split and left, and then I had some other partners, but.

Okay.

Not where the business stood. And I think. And give me your example, and I'll.

Yeah, okay. All right. Yeah, I'll give you. I'll give you both of them. So the first one was the business before the Mac Observer. It was a business called Computer Nerds.

Right.

To my knowledge, it still exists today. It certainly existed long past me leaving, and I had. It was not a business that I founded. I moved to Austin, and the business just was like Geek Squad. But pre Geek Squad, we were going around and helping people, and we actually. And when I moved to Austin, the guy who started Computer Nerds, Lee Robin, had just moved to Austin from San Antonio. He had started a Nerds thing there. He had sold the majority of that off to his former partner there. He was starting it in a new city. His vision and dream was to have Computer Nerds franchises all over the country. And so he was like, okay, I'm just going to do it again. And I met him shortly after he had gotten to Austin, and so we formed a partnership. But I was in that. In that business. I was a junior partner. I did not have an equal share, and so it was a minority share. And we. We worked it up and we built it together. And the reason for the partnership was because I was really good in the field with the customers, and I had the vision for how some of the staff would work and all of this stuff. It made sense on paper for us to be partners. But as we kind of marched down the path, we realized that we were better friends than we were business partners. We had. We had some very different ideas about how compensation should work and how, you know, the whole staff should be dealt with and all of this other stuff. And it wasn't that either one of us was bad. I wouldn't. I wouldn't say that his. His ideas were bad. They were just very different from what I would do. And there was kind of a lot of irreconcilable things. And so we. We just decided, you know, he finally came to me, and he's like, I think I should buy you out. And I said, well, okay. Okay, Yeah. I said, you know, it's your business, so, you know, I. I mean, I can fight a buyout, but what good is that gonna do me?

Did the. This friction that. That, you know, whispered you. Did you think, or did you guys find that it was kind of holding the business back?

Totally.

Okay.

Yeah. And it was, it was palpable in the office too.

I see.

Yeah. Something needed to change.

Okay.

Yeah. And it got pretty, it got pretty bad for a while, but it was, in the end, it worked out fine. The business went on for a time. He had offices and I think he had five or six offices in, in three states and he had consolidated all the dispatch in one area. I mean, it was really, really. He was, and he was doing gangbusters.

Now did you keep an interest in that business or did you, did you walk or do you buy you out completely?

He bought me out completely.

Oh, okay.

Yeah.

Okay.

Yeah. Which was, I mean, was the right thing at the time. You know, in retrospect, would it have been? I don't know. I mean, I, I haven't talked to him in a little while. I think actually the business saw some, some pretty rocky days in, in recent years, but I think it's actually back on its feet and, and he's moving along and all of that. So. Yeah, I'm not sure it would have mattered if I kept an interest in it or not, to be honest. Right, right. You know, and at the time it was like, well, if I don't, if I don't have a say and if I don't have the ability to impact what's going on, I, you know, I want, I don't want anything. And he, we both kind of wanted a clean split and then that was better for, for both of us. And then at that point, you know, I went on and started Mac observer and then the, and it worked out fine. The other business that started as a partnership and, and no longer is, or at least currently is not, was Backbeat Media. Greg, Greg Snyder and I started that together. Actually, that business started as a three way partnership with Greg, Brian Chaffin from Mac observer and I. And within the first year, Greg and I bought Brian out, which was the right move. He didn't really have an involvement in it and it made sense and so we bought him out early. Early on.

Okay, sure.

So for a long time it was Greg And I at 50. 50. And, and then, you know, as, as I mentioned, things happen and he, he wound up going through a couple of major life changes, one of which was becoming an ordained Buddhist priest.

I remember having that conversation with him. Yeah, like, that's awesome, man.

Yeah. And, and, and then starting. Because, you know, obviously, you know, in line with that, he started the, was one of the founding members and partners in the Brooklyn Zen center in Brooklyn, New York. Yeah, but that's cool. You know, that didn't leave him a whole lot of time or mental energy to do the things we needed him to do here at Backbeat.

Yes. Yes.

Yeah. And, and I, I, I feel like I realized that before he did, but maybe he realized it too. I mean, he was the one that proposed we have a conversation about this, which was good, you know, and so it's possible we, we were both well aware of it at the same time. We just, just, we just didn't talk about it at first.

Right.

And, and, and, and so we structured a buyout, but in that business, we did not have a buy sell agreement, which is odd. You'd think after buying one partner out we would have, you know, we would have put that in place, but we did not. But it was very, the, I, I, and I owe a debt of gratitude to Greg for this. You know, the, the whole buyout was very amicable, and, and he actually, he went out of his way to make sure that he felt I was being treated even, I would say, more than fairly. And I feel like I was treated more than fairly.

Yeah. Yeah. It's a Zen thing.

Totally. Yeah.

He's like that. I could see, I mean, I've, you know, talked with him a lot, and he was our rep for a while, and I, I could see that. And that, that's awesome. And that's what you, you know, hopefully you've built up this, you know, mutual respect for one another.

Well, that's what it came from because, because the business had existed for a period of time, we were officially partners, but he was detached. And so when he came to me and said, let's do this buyout, you know, he, he went out of his way to make sure that we sort of rewound and said, let's do this in a way that's reflective of the fact that it's essentially happening two years ago or whatever the timing was, you know what I mean?

But it was for him. Yeah, it was.

I, yeah, it was. Yeah. I really, like I said, I really appreciated it because it kept it from getting ugly because I would have, I would have brought that up anyway, you know.

Yeah, that's the key. Well, if you had, you know, that's the thing. You want to have that open and frank discussion, and that's, you know, finances are involved. You, you have to have that, you.

Know, you have to have it. That's right.

Yeah. So, yeah, so it sounds like to me that, you know, going back to the beginning here, both of us have a pretty positive view of partnerships.

I miss having a partner with Backbeat, to be honest.

That's interesting.

Yeah. I mean, it's fine, but.

Yeah. I mean, to the point where would you go out and say, hey, I want to. I want to bring somebody in that can do these kinds of things? And, I mean. Or it's just like, oh, no, I'd just kind of like to have somebody, but I don't.

Yeah, there are. There are moments where I would appreciate having a partner. And. And I mean, the. Some of the guys on the team serve that role in. In various ways. Right. You know, ideas to bounce off of. But at the, you know, at the end of it, it's still, you know, I'm having this conversation with Dave, the guy that signs my checks. Right.

Yes, correct.

And so different. It's different. And I guess, you know, maybe the answer would be to bring on some people as. As board members. Right. And. And then. And then there's some, you know, that. That would be a way to create that. That structure without having to impact the. The rest of what goes on.

Yeah. You could have an advisory board, if you board. Right. You know, meet with them on a occasional basis, that kind of thing, you know, and that's good. And I think the key thing that we've been, you know, putting out there for the last half hour or so is. Is partnerships are great. If you have the opportunity to prepare and kind of model how things are going to work up front, that's awesome. You may not have that luxury. And the, you know, the critical thing is communicating and keeping those, you know, what you're. Your current goals and future goals are in mind and, you know, working together to achieve those things.

Yeah, that's the trick. Communication. Yeah.

Yeah.

And, you know, you. You use the term a couple times. Marriage. It's absolutely. Right. I mean, it's. Yeah, yeah, yeah. And sometimes.

Definitely is.

It's, you know, in some. I don't want to say sometimes. In some ways, it's even, you know, deeper than that. On a different level. I mean, it's.

Yeah, yeah, yeah, that's right. Well, you become. You depend on them for certain things. And, you know, it's. It's obviously very different. That connection you have and then, you know, that respect for one another and relying on one another, that it's. It's a. It can be a powerful shared experience. It can be powerfully positive.

Yeah.

And powerfully negative, you know. Absolutely. So you want to try to pull out that positive stuff as much as you can and, you know, grow off, use each other's strengths to help each other lift each other up.

Yeah, that's right. That's right. Well, that's 43 minutes and 25 seconds. I think. That's a good one, man.

Yeah, that's good.

That's great.

Well, you know, we'd love to hear your partnership stories. If you have any, you know, comments or other questions and, you know, awesome stories or horror stories that you'd like to share, you know, reach out to us feedbackbapodcast.com you can also follow us on facebook@facebook.com dbapodcast podcast and our Twitter is DBA podcast. Is that correct, Dave?

Yeah, it's all DBA podcast right now.

All DBA podcast right up until the.

Moment we change it. That's right.

That's correct. Everything changes.

Everything changes.

Awesome.

Thanks, folks.

Have a good night.

We'll see you next week.

Take care.