Relationships Before Business ALWAYS

Jim Johnson talks with an entrepreneur about ending a three-year partnership over conflicting visions: one wanted a small profitable company, the other wanted aggressive growth. After the split, Speaker B started fresh with seven people from the old firm, including his mother and an employee named Kim, and hit $5 million in revenue in year one.
Questions this video answers
33
About 15 years older
About three years
About seven people (from the prior company)
In winter
Chapters
That is an incredible amount of discipline. I can't imagine that most anybody that you started with was still there by the time you figured it out.
Yeah. And I don't get it, because in my head, I'm just like, this is just such an amazing opportunity. Like, who wouldn't be excited about going and getting someone a new roof where the majority of it's replaced through their insurance?
Yeah. It seems pretty simple. Right. But harder than it may seem on the surface. Yes. So you go to work for this guy and things are going well, you're selling a lot, and you become partners. Is that how it went?
Yes.
Yep.
About seven years in.
And so you did that for about three years. Was it good? Like, becoming a partner is a bit difficult. This. This idea that you're actually kind of like, getting married. It's like a marriage, and the only way out usually is you sell it and everybody goes yay. Or things aren't going so great and we have to have a divorce or separation.
Right.
How would you describe it in your world? Was it something different than those two?
I was so pumped. I was so proud. I was, like, so excited. I really, really love the guy that I partnered with. He always treated me so well. And it was awesome at first. Like, the first year was awesome. Just so. I mean, I was pumped. Like, we were crushing it in sales. The next year was okay. We actually noticed, like, we're not really making that much money. Like, the sales were ins, but we weren't really making that much money, which was interesting. And then we were like. Our eyebrows were. Both of us. We were just like, this is interesting.
Was he a young guy too?
He is probably 15 years older than I am. I'm 33.
Okay. So he should have had a little bit of knowledge going into it, hopefully.
Yeah. I mean, and that's what I learned was we're both salespeople. Like, we are both on the sales side, which probably wasn't the most advantageous partnership. Right. It's not like he was all over the operations and the. The books, and, you know, it's like, we're both just great salespeople.
Gotcha.
And so that's what happened. We. Since there were two great salespeople, we weren't really looking at the numbers or understanding the numbers. And we were like, I don't know if you'd even call it lose. And I still, to this day, don't know, because it was. It was like, were we losing money? Were we making a tiny bit? Whatever it was, it was as good as not even close to what it should have been. And we kind of realized that together. Along with the number one reason that we separated after three years was we just had different visions. He wanted to grow a small company, but make it as profitable as possible. Where my vision is, I want to employ as many people as we can, create the largest company that I can, and make the most impact that I can. That's where it comes from. I want to impact as many people as possible. And it was such a different vision that. And now looking back, I'm like, oh, our visions were totally not aligned, Right?
Yeah. And when they're not, it's like you start bumping heads a little bit, right? One's pushing, the other's kind of pulling back. There's. We're trying to figure some things out, and the one guy's going, okay, figure it out. I'm gonna go sell some more.
Right.
And that can be, I don't know, create a lot of tension. Did you feel that?
I'd say, near the end, like, I definitely started to feel it, like, when we both weren't making the money. And on top of that, we weren't seeing, like, one of my big things constantly the whole time was, okay, like, I at least want to be providing an amazing service. Right? So. But he was always trying to make it work with what we had, and I was always trying to add more people. And I'm not saying that either one of us was right or wrong, but it was. Yeah, we were clashing, and it definitely was creating some tension. But he was so good at selling. Like, we were so close. Like, he was just so good at selling me. Everything's okay. And I was so good at selling him. Like, you know, I guess it was just like, we were always so happy, you know? But, yeah, I'd say after years of it and not seeing the changes that we both wanted, we both got frustrated by, like, year two and a half. We just had one conversation. We're like, hey, we should split up. And, you know, the other person was like, yeah, we should split up. And it was. And we're still, like, we love each other still. We talk on a regular basis. Everything's great. But, yeah, it was very frustrating for both of us.
That's pretty cool, actually, because it doesn't usually go that way. You know, it usually gets pretty, like, well, you know, how much is this business worth? And what do you owe me versus what do you owe me? And all that other kind of stuff. And you guys are both, like, you know what? Why don't we just go our separate ways and still be buddies? Which is. That's big of both of you. Now, I have a question. Did you figure out why you weren't making money?
Did I figure out? Yeah, I figured out why we weren't making money. We weren't making money because we weren't taking our overhead into account when we were job costing. And we were just like, yeah, that was a big deal. Like, yeah.
Cause overhead can be pretty dramatic sometimes.
Yeah. But one thing I wanted to add real quick. Cause it was on my mind. I think it'll bring people a lot of value, is that I'm really proud of the fact that we still have a great relationship. And I work with my family, I work with a lot of friends. And I worked with this individual who we had been friends for so long, I worked for him. And I'm really proud that we still have a relationship. I mean, it's been, what is it, 18, 20 years now. I've known him and we're friends even after so much stuff like this. And the reason that I'm able to do that is because I never put business over relationships. And I, I, I want to just send that message out to people that I believe. I've lived, like, way happier of a life because of that.
Yeah, I, I've noticed that about you in a variety of different. And sometimes it plays well for you. Sometimes it can be a little bit of a challenge. Right. As we're dealing with folks that work for our business. So, okay, we decide to split and you're gonna go do your own thing. Who are the first people you talk to? Like, okay, so I'm gonna go do my own thing. I need some help. What does that look like?
So we basically had probably about 15 people at the company. My partner, he wants to keep it lean, so he's like, all right, like, these are my three, four people. I'm like, all right, come on, the 10 or 11, let's go over here. And I think, you know, if I think back, I believe that we started with like seven people that were from the company we had before.
That's pretty awesome. So they followed you, so they must have liked you for some reason or another. So that tells me probably some good instinctual type leadership skills, those types of things. Probably pretty decent culture. Who are some of the key people, like bringing leaders or anything like that.
Yeah, we have still some people today that are here. My mom, first of all, she was running the whole office, and she still runs our whole office. We also Have Kim, who does our supplements. I also had several of my friends, so none of them work here anymore.
Yeah, Kim and your mom still work there, right?
Yeah, Kim and my mom do. And then I had, I had several other people who came, but yeah, those are the only two that still work here. Out of those seven.
So you start at zero. What's your first moves? What do you do?
First move was we. I mean, there was time, right. So we split up in the winter. So I had the whole winter to plan. We created the company. I. As soon as the company got approved to do business, I immediately went out and started generating sales. We had the team already. Everyone was excited. Everyone was pumped up. We went out and we started generating sales right away. Like the day that we were approved, we were knocking on doors about.
Right.
And we were so pumped and we were really like talking to our clients, getting referrals. We were just, we really hit the ground running. I mean, we did over 5 million or I think we did 5 million flat our first year.
Wow, that's pretty awesome. So you did 5 million your first year. What challenges and obstacles did you run into in achieving those kind of numbers in your very first year?
Honestly, it wasn't really that challenge. It was very much business as usual. There was a lot of excitement.
Why would you like. Okay, so that's unusual, right? So most people started go zero to 5 million. Now you had some past experience, so that helped in the sales part of it.
Yes.
Like there's process and systems and accountability and leadership and culture and all these other things. What did you do to like get that kind of stuff installed to do like. Because if you do 5 million, that's cool.
Yeah.
But then you got to do again next year or more. What'd you do to like get those things where it was smooth that first year instead of it being chaos like most people would deal with?
Yeah, we were at this time, we. I wasn't probably doing the best with that. I think that we just had a lot of people who really, really cared and we, I think, I don't know if we were still in my parents basement at this time. I think we might have been in my parents basement. I'm having a little trouble remembering. But yeah, I mean, as far as the processes, we were just, we had, you know, everything from the, you know, we took our time to make processes at the previous companies that we were at and we had access to all of that. So a million percent, like there's no way we would have been able to do 5 million and run everything the way we did, without taking all the processes that we had from the previous company and all of our previous documents and everything like that. So that was so needed.










