← Follow The Yellow Brick Road
Follow The Yellow Brick Road
The Key to Thriving Business Partnerships: Clear Roles, Communication, and Trust
00:28:35
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- [00:04]
A
Hey, guys. Welcome back to another episode of Special Ops where we give real, actionable insights for entrepreneurs. If you think a handshake is enough to secure a successful business partnership, think again. In today's episode, we're going to break down why clear roles and expectations are the key to a thriving business partnership together. Maybe you've had a partnership fall apart because you had unclear roles. What if you could prevent that from the very start? Business partnerships fail all the time because there's vague, uncommunicated expectations. So today we really want to focus on how we can define our roles and having those difficult conversations early to ensure long term success. Make sure you visit our Visionary vault. It's a free resource for our listeners. It's@specialopspodcast.com and today we've got a free guide for starting and navigating business partnerships relationally, operationally and legally. Em and I co wrote this with our friend and attorney, Ryan Poteet. He's an amazing attorney at Gordon Reese and we've known him for a long time. He's helped us with lots of different things, both on our own stuff and with other clients as well. So we're going to touch on, I think, three areas today as we kind of dive into this. The first segment I really wanted to focus on is why we really need clear roles and why that's non negotiable. If you just picture this, right? Like two business partners, they're both working super hard, they're pulling as much as they can, they're pulling their weight, but they're going in opposite directions. Like, how familiar does that sound? We see this like all the time. And so I really wanted to dive into how defining clear roles can help prevent a lot of those misunderstandings in that process.
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B
Here's the thing, right? Like everybody always thinks they're doing more. Except for you.
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A
Except for me.
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B
I'm very clear about that gossip too. Gossip's another one. He's like, okay, within six months I need to not be doing anything. That's how this works. But, but everybody thinks that they're doing.
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A
More, they're contributing more than they probably actually are.
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B
No, they think that they're doing more than the other person.
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A
Oh, okay.
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B
From the outside looking in, you filed taxes. It doesn't seem like that big of a deal.
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A
Depends on where you're at.
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B
There's six businesses and you have to gather all the information. I'm a nightmare. I never have any of my stuff. So it becomes months and months long event, right?
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A
Or we've organized that Better, but yes, or far worse.
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B
You have someone who's writing, writing all the marketing and doing all the marketing and handling all the sales. And the marketing, the sales doesn't seem nearly as big in the operator's mind.
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C
Right.
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B
As what operations is and running all the day to day to the business. And so if you have a marketer and operator working together, you can end up with a lot of friction or.
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A
A lot of magic, depending how it's structured.
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B
You can end up with a lot of friction if you don't have defined goals.
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A
Right.
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B
And so if you have defined clear goals, and I'm sorry, not goals, roles. We have defined roles. And I know what you're doing and you know what I'm doing. And we know we're each taking 50% and we talk about that until we're comfortable with it, then there's a lot. I focus with you constantly. I mess with you constantly about how you never do anything. I make more money than you do in the business. And we set that up. Like, I just mess with you all the time. We set that up intentionally that way.
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C
Right.
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B
Like that's how it was supposed to be. I've never actually been mad about any of that. I just like picking at you. So it's. I prefer it this way. I like it this way. I don't have to worry about the things that I don't have to worry about, and I don't have to worry about anybody touching the things that I don't want them to touch.
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C
Right.
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B
So it's a, it's a great relationship. But we spent time on that. We spent understanding that, and it was like, well, wait a minute, you know, who's going to handle this and who's going to handle that? And I don't want to do that. You're not doing that much, so I'm going to need you to go ahead and take this on.
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A
Well, because there's things that need to be done in any business. Right.
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B
And so things that need to be in every business. But the last thing I'll, I'll say about that is when you're, when you're rocking out goals and goals in a business, and you should have, like, goals in order to figure out who's going to do what. And as far as roles to even understand, that's my opinion. But when you're doing that, yeah, this is my job and yes, I need to take care of this, but this is our business. And when I need your help, you're going to jump in and you're going to help me and vice versa. There are times I definitely want to say to you, like, dude, this is like, not my thing. I'm not doing this. But hey, when we're stuck, we're stuck. When we're sick, we're sick. When we're on vacation, we're on vacation. So sometimes there's a need for that. But so don't get stuck on. That's your job. I'm not doing.
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A
This is my dam. Yeah, yeah.
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B
Kick someone in the face. But you should understand who's gonna be responsible for the ultimate delivery of those boxes. I like to call them boxes. And so marketing, sales, finance.
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C
Right.
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B
Employee development.
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C
Right.
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B
Hr. Even if you have an HR manager, even if you have, you know, a marketing director, an owner needs to oversee that.
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A
That needs to be their area.
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B
This is your box. This is what you're going to do. And then what are you physically going to do? And what are we going to be hiring out for? And let's talk about what we're doing today. Let's talk about what we're going to do at milestone $1 million, $5 million, $10 million. Because, listen, at a certain point, a lot of people, myself included, when we hit a certain number in one of the businesses, not all the businesses, Shockwave will always be involved and I'll always be very much hands on.
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C
Sure.
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B
But when we hear certain numbers in other businesses, I don't even want, like, Seismic Wave. I don't even want to hear about it. Like, that's Michelle's problem. Right. Like, that's not. I'm not. Not it. I need to see KPIs that I oversee, and I need to make sure that my business is healthy and that I'm compliant because that's my job as a business owner.
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C
Right.
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A
So just because you're responsible for that role doesn't necessarily mean that you're doing that role.
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B
Correct. Because we had these conversations, and our conversations were all these other services. Businesses are a great way to make money and a great addition to our main business. But it was never meant to be a second, third, fourth, fifth, sixth job for Travis and Emma.
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C
Right.
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B
It was supposed to be, let's get it to a point where we can hire someone, put that someone in there, they become CEO and we back off and they do what they got to do. I remain. I remain the owner. And I have a responsibility to us as an owner to make sure that I'm reviewing KPIs and operations. Because we talked about that. We, we talked about it at Day one when we had no money and we weren't going to be hiring anybody and we're just kicking off and it was going to be me and the team from Shockwave running it ourselves all the way up until when we got to a point where we hired someone to take that over. And so that's why it's important when you're talking about roles to understand what is your partner's long term vision. Because this is where I think a lot of them break down. Well, you're responsible for sales and you hired a sales manager and now you're still making the same amount of money. Yeah, I hired the sales manager and I trained him and so yeah, I was responsible for sales.
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A
So that's happening.
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B
Right, right, right. And look at the sales, they're increasing. So understanding that I think is vitally important to, to that component of when you're planning to go into business with someone.
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A
Yeah. And I think, you know, you mentioned briefly roles and expectations and that might actually be a good place to segment into this next section because as you're going into any type of business partnership, you're going to have expectations of what this person is going to do in.
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B
Every aspect of their life. It's really funny how that happens. Yes, it's really funny how that happens. And as, as someone who's been a business owner for five years and owns multiple businesses versus I did own a business before our first, but it was like it was, that was an accident. I don't understand. I don't know. It was three kids, wanted to have a good time and 15 years later I just get this check. But that wasn't a serious business. This is a serious business. And I didn't understand how much anything that you do and anything I do reflects on the other person.
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C
Right, right.
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B
And it really does.
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A
It really does.
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B
And so there's, there's a lot of expectations that you need to come to the table with from how are we going to communicate? And I'll let you get into a lot of that, but how are we going to communicate? What does it look like when I'm at a conference and I'm passed out drunk on a couch because I drank too much As a business owner of a business you co partner with, I've never done that, by the way, but I'm just saying, like, these are the type of conversations you have, but you need to have because if you don't.
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A
Is that, is that going to be something that you just going to make you go like, I'm out Right. Like, if somebody, if you're not clear on what those expectations are, you can't be upset.
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C
Yeah.
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B
So I want to have every right to be upset. I want to talk through, like, how does our business function? How do we communicate? How often do we communicate? What happens when we don't agree?
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C
Yeah.
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A
And have those conversations early on and talk through it, because at the very, very beginning, like, that's the best your relationship's going to be.
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B
Right.
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A
You're the most optimistic about the future.
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B
Right.
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A
And so if you can't have that hard conversation at the very beginning when things are great, there's no way in hell you're ever going to be able to have that when things are terrible or hard.
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B
Right, Right. And I say this all the time. And if you can't have a really hard conversation with somebody when you're planning to start a business with them or you're walking through an operating agreement, if you're getting anxiety over conflict with them, they shouldn't be your business partner. That's not something you should do. And so you and I, way, way, way back, we went through months of talking because that's how you wanted to do it. Well, it was. God, it was so long, but it was, it was perfect because when everything came to fruition, it was the perfect time. It was the perfect moment. It was our time. It really was. It was our time. It was great. And so. But for months prior to that, we had been talking about, what does an exit look like?
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C
Right. Right.
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A
Where does the end. Where are we going? What's, what's, what's the purpose? What's the end game? What happens if everything goes great? What happens if things are terrible?
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B
What happens if one of us die?
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C
Right.
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A
And that's actually been interesting because. And we can probably dive into that a little bit more. But that's interesting because that's changed for us over, over the five years that we've been.
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B
Has changed for us over the five years.
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A
And we've had those conversations over the five years. Correct.
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B
And then my favorite conversation, which I'm being facetious, was what happens when we don't agree lives, when we're not in unity on something. And I. My favorite part about this is I use this against you. And now your wife helps, so that's even better. But that was when we were talking about our roles. Just to kind of go back to that for a second, we were talking about, you're going to be in charge of finance, you're going to be in charge of taxes, you're going to be in charge of sales. I'm going to do the day to day. I'm in charge of employees. I'm sure all the other shit. Hey, so you get last over here, I get lost over here. And you were like, oh, no, no, no, no, no, no, no. If you. And I did like the way that you posed it to me, you didn't say, if I don't agree with you, you're not going to do it. You said, if you don't and what I'm gonna do, I'm not going to do it. Until we can come into agreement. If we're not in unity, we do not move forward. And I'm like, you are out.
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A
Nothing's going to happen of your mind.
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B
That's not how a business works. Like, you have to move forward. Like you have to. Oddly enough, it has never kept us from doing anything that needed to get done. And in fact, the only things that it kept us from doing is I pull that card after I make you fight for a long time, because most of the time I can wear you down, but I pull that card and I'm just like, I'm sorry, Travis. We're not unity, so we can't move forward. My favorite moment on the cruise, by the way, was when me and Sherry did it too, at the same time. But anyway, you'll have to edit that out, but anyway.
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A
No, no, that's fine. But look, here's the thing is, I think out of this is like we have a saying. The best argument should be able to withstand the harshest criticism.
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B
We say that all the time in our business. This is not a debate so that you can, like, you're not. You're not debating to win, right? You're never debating to win. And also you're not debating to win that moment, right? You're debating to win for the future, for the company, for all of us. And if you want to bring an opposition, you're absolutely invited and welcomed and encouraged to do so. But. But when you bring an opposition to something we're doing, especially if it's working, come prepared to defend it. Because I'm not going to, right? I'm not going to switch gears on my whole company because you one year in, have this great idea. If you can defend it, though we've done that, we've moved whole structures because the person who brought it to the table could stand up and he had a good reason for it. It made a lot of sense. The capabilities were better. It was going to move our business Better. And he was able to defend every question and talk through resources and everything else. Let's go.
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C
Right.
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B
But if you're just like, I'm not going to be questioned. Like, get the. Like, come on.
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A
So what I like to talk about now is we've seen conflicts all the time happen, not just in ours, because we kind of invite conflict sometimes. Not necessarily because we want it, but.
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B
Because I want conflict. I want conflict. I love conflict. Out of conflict comes a few things. Number one, explosive growth. And I'm obsessed with growth, growth. So I can't be in conflict with someone and not grow from it. I always say that I like to win, but I really don't. I like to learn.
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A
Yes.
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B
I care way more about learning than I do about winning. And for whatever reason, the way I was, I'm just wired incorrectly. And the way that I learn is through debate. I want to debate you on what I believe is the best way. And I want you to tell me why I'm wrong. I really want you to. Not just you, anybody, the guy on the bus. I want you to tell me why I'm wrong. And if you can wear me down enough where it might be right. Like, I won the whole day. I won the whole day if you won because I learned something from you and you taught me something that I didn't know and like, that's a win. So empowering.
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C
Yeah.
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B
But that's just not the case for a lot of people because they're not comfortable in that, if that makes any sense at all.
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A
I want to kind of touch also on communication and regular communication as well, because you and I have what we call, like same page meetings where it's a touch base on things that are going on. It's a way to just stay connected about what's happening in the business or.
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B
We talk about every day.
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A
Right. But it's important to have those conversations to touch base as often as necessary. But probably you should be talking more than you need to. You should be having regular communication about what's going on, where things are at. Are you guys actually on the same page? Is this continue to move in the same direction?
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B
Remember when we tried not to? Yes, you tried not to. You tried not to. You're right. It's constant communication. It may be your thing and I may not even need to know about it, but it's probably important that I know about it.
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A
So another point that I wanted to talk about is the importance of regular communication because you and I have multiple businesses together and the importance of being able to talk about those things, know what's going on in each of the businesses. And by the way, not just business, but also, like, personal life and other things that are happening.
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B
Absolutely, absolutely. Absolutely. I make it a point to make sure you know what's going on in my life if I'm struggling. Like, dude, I got. I got, like, nothing today. Yeah, I got nothing.
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A
It happens.
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B
I. My brain's done. I'm tired that the stuff that's going on in my personal life is too big. And you're like, don't worry, I got you. I got this whole thing today.
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A
But that only happened. Look. But that only happens if we're actually communicating.
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B
Right, right, right.
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A
And so I also kind of want to go through because we've worked with a number of different clients that have had partnerships, some good, some not very good, some kind of disastrous.
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B
Actually, the only time I've ever been sued was two partners that couldn't communicate. Yeah. The only time I've ever been in a lawsuit was two partners that couldn't communicate.
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C
Right.
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B
And what was funny was we tried to get them to do an operating agreement. They weren't partners. They were trying to become partners.
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A
Right.
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B
And they couldn't work through the operating agreement. And after years of not being able to work through an operating agreement, it went from, oh, well, yeah, I was a contractor, and I always said I was a contractor, but now since you said I was trying to be a partner, I am a partner and I own half this whole thing. And so we ended up in this. It was very quick. It was. It was very quick. It was just a nuisance. Yeah. But we ended up in a lawsuit, and I had to flag. Stop everything to go and resolve this thing. So everything stopped in all of our businesses and all of theirs. And it took them a month to really just restructure and get things together. But the whole reason why we got there is an inability to have a hard conversation that could have a result, I. E. The operating agreement.
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C
Right.
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B
And had they just gone through and said, okay, we're. This sucks. We're going to shut the door, we're going to be in conflict. It's going to be awful.
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A
But we're going to figure it out.
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B
But we're going to figure it out because we're partners and we have no choice but to figure it out. And that's how partners go at things.
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C
Right.
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B
And so at the point that that couldn't happen after a short period of time, this isn't the person for me to go to business with. Because the person I go into business with, I become the mentor of other human beings. I'm responsible for other people. We're responsible for a lot of payroll.
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A
Not just our own companies.
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B
That sits in the forefront of my mind when we're making business decisions with any amount of risk that I would love to take. If it puts them at risk, if it puts me at risk to possibly having to lay someone off, I'm not doing it. I've never had to lay off anybody in my entire career, and I hope to God I never do, because I make decisions that in my whole career, even when I worked for other people, that's important to me that these people put their lives in my hands. And so the second thing is, so we're going to be responsible for these people together. We're going to be responsible for this business together. So, I mean, sometimes we got to go to war together.
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C
Yes. Yes.
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B
I got to trust you. I have to trust you. I have to trust you to not just protect you, you have to protect our business, even at the detriment of us.
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C
Right.
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B
Because that's when it costs us, man. And when it costs us. And that's tough. That's tough. And we've had those conversations. I mean, we've fortunately never faced anything really tumultuous that was going to, like, hurt either of us. But. But we've had those conversations where this thing is going to cost one of us something. Yeah. Which one is it going to be? So, you know, if you can't sit down and have an operating agreement and have an open line of communication in conflict and turmoil with this person, you can't be in business with them. And the third thing is, we always say business is a lot like a marriage, but my husband can't go get a loan or buy a car without my signature. My spouse can't. My spouse can't go and open up a checking account in my name without my signature. You've opened up a checking account in my name. You put credit cards in my name. I have to sign up. Then you wouldn't like. They're all. They're all legitimate things. But as my partner, you could go open a bank account, obligations, grab a line of credit, destroy my credit just in the applications. But. But go get a line of credit, buy yourself a car. And. And it's a civil matter.
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C
Right.
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B
And it's a civil matter.
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C
Right.
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B
And my operating agreement doesn't say that you can't do that. Then. Oh, well, I'm just. I got it. Like, I just Got to figure that out.
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A
So I think that's a good transition, actually, to talk about some of the key documents that every partnership needs and what are the steps to set that up in your business or partnership to do that successfully. So I'd like to go into something that's a little bit more like action oriented for the steps to set up a thriving partnership.
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B
So, number one, the guide is going to be the best thing. So, yes, it's actually quite interesting. Travis and his wife Sherry are marriage coaches, and so he wrote the relationship part. And you. You did. You very much led us through. And I say lead intentionally. You very much led us through the negotiation and the conversation, the hard conversations. What happens in death? What happens if I hate you? What happens if I don't want to do I wake up and I just don't want to do this anymore? What happens if I get divorced? That was a hard one.
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A
Yeah.
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B
What happened? That was a hard one.
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C
Right.
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B
What happens if one of us dies?
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A
What do we want to happen?
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B
Right, right. But. But also if we don't agree and what are we going to do and whose roles are who and what's. You know, what's this and what's. You really led us through that over a long period of time, but you led us through that. And so our guide, Travis, wrote a checklist of what you need to walk through and go through for the conversation that you need to have, which probably should be done over several. I don't know. That needs to be done over 17 months, but it might not have been that long. But it was 17 months. Would you like me to break that down or would you like to let that go? Okay. Okay. All right. So it could be three or four calls, but I do think that it needs to be three or four calls and probably a one in person. You flew to Puerto Rico to see me so we could. We could seal the deal. I guess you would say figure it.
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A
Out, work it out.
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B
Like, let's just have this one conversation one more time in person after I filed Sockwave Solutions. And so for another time. Yeah. Story for another time. So. So you have that checklist from Travis and how to navigate relationships on an ongoing basis. Because all relationships need a regular cadence of care is what I call it in my book. A regular cadence of care. And Travis has always made sure that we have that, making sure that we connect in ways that he understands what's going on in my life. I mostly understand what's going on in his life, and he's more emotionally stable and what's going on in the businesses. And as our plans change, we sit down and talk about those plans changing. And he walks through all of that for mine. It's operational. It's what can go wrong in the business. If you don't do these things. You need to have an operating agreement. These are the, the things that you need to think about operationally when making decisions. Like, if I die, Travis and I own 5050 of Shockwave, we own 5050 of all of our businesses. If I were to pass away and my husband became 50% owner, Travis would not be able to continue to run Shockwave. So him and I made an agreement that if one of us dies, our living spouse gets 25% or our living heir gets 25% of our share and the other owner gets the other 25% back. So they can take that money that would be allocated to the other person and either get another partner or be able to hire a very high level person to come in and run things.
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C
Right.
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B
And so it has all kinds of strategy like that and what to think through. And then Ryan Poteet basically wrote you a checklist of what absolutely needs to be identified in your operating agreement. My side gives you the options, his side just gives you like all the titles. He's not going to tell you what to do. That's your decision. But he's going to tell you things like if you don't have this in your operating agreement, then this person can go buy a car in your business's name and you now own half of the car that they drive every day. So the guide is, I think, the, a phenomenal way to navigate through what you need for your partnership from conversation to execution of operating. Right. And what I'll say is for people who are listening, they're like, damn, I wish I would have done that. It's never too late. Travis and I, Travis and I have changed what we are doing three times because our lives changed.
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C
Right.
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B
How much money we made changed. And as you make more money, you have a new set of concerns, a new set of problems, and the things that maybe you thought were so important before aren't really that important anymore. So we went through three times total over five years and have changed it and have upgraded it to go with our lives. So there's no reason why you can't sit down with the, with the Guide and go with two partners, three partners, four partners, and go through the whole thing and re outline it.
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C
Yeah.
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A
And again, like the communication really is key because I'm A big fan of being in unity in the decisions you're going. I like that in partnerships. I like that in my marriage. I like that with staff or with team members. Because you're inviting. You probably have a different perspective.
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B
It's not a democracy.
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A
I know. I'm not saying you don't get a vote.
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B
You can give me your opinion. If we're not in unity, you can just move on.
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A
But how much more powerful for it is.
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B
I agree. I like that to happen. But if an employee doesn't want to do something, I'm not going to not do it.
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C
Right.
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A
But if you get their buy in, it's so much more powerful.
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B
I agree with you completely.
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A
So. But the same thing in your business and having the same buy in together, and if there's areas of friction or conflict, then it's an opportunity to figure out how do we solve that together. And. And if we need to adjust or tweak the operating agreement to accommodate that, then do that. Like, there's no reason you can't make changes to this thing as you need to. So have those conversations. Allow yourselves to be in unity so that you're. You're documenting what.
- [26:38]
B
Honestly, the more you have those conversations, the stronger your businesses and the easier when you're in turmoil. And there was like, one point not that long ago that we were in turmoil, and a lot of it had to do with not regularly meeting.
- [26:53]
A
Mm.
- [26:54]
B
Not you not being as present as the. In the business that you needed to be, but also wanting half of the say of what went on and me not having even a moment to say, like, we're in the weeds, dude. I am overwhelmed. I cannot explain this to you. We just need to keep going. And so that was a really challenging time for you and for me. But we knew how to navigate through it because we had discussed what to do when we weren't. When things weren't going right, what do we do? And we basically had a map on exactly how to handle it. It was very, very. It was a hard time. I won't say it wasn't a hard.
- [27:34]
A
Time, but it helped us navigate that.
- [27:35]
B
There were days I was just. But there was. It was a much easier situation than what we've seen of other partnerships because we had navigated through that. So we were responding rather than reacting.
- [27:50]
C
Yeah.
- [27:51]
A
So if you're ready to build a partnership that lasts, head over to our free members visionary vault. It's a members area@specialopspodcast.com where you can get a customizable operating agreement and template to start defining those roles and expectations today. So if you've got value out of this, click like and subscribe. Make sure to visit specialopspodcast.com and again, we just wanted to recap the importance of setting clear roles as non negotiable, the role of expectation and communication, and actionable steps for thriving partnership. So go ahead and visit Special Ops Podcast to get access to that information and get that guide. We appreciate you guys so much. We look forward to catching you next time. Goodbye.