This Is Why We Tell People To Avoid Partnerships

Summary

Episode Overview

Podcast: The Ramsey Show Highlights
Episode: "This Is Why We Tell People To Avoid Partnerships"
Date: September 20, 2025
Host(s): Dave Ramsey (A), guest host (C)
Caller: Andrew (B), young business owner

This episode tackles the risks and pitfalls of business partnerships. Dave Ramsey and a co-host advise a caller, Andrew, struggling with a lopsided business arrangement in the pool service industry. Listeners are given firsthand insight into why partnerships so often end in disappointment, financial loss, and frustration—especially when proper agreements are absent and partners have misaligned values or work ethics.

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Key Discussion Points and Insights

1. The Genesis and Evolution of the Business ([00:06]–[03:27])

• Andrew's Journey:
  • Andrew co-founded a pool cleaning, repair, and resurfacing company three years earlier with a partner.
  • Early operations were small, handling power washing, window washing, and pool jobs for about 10–15 clients.
  • The business expanded by taking over many clients from Andrew's previous employer, resulting in 60 service visits per week.
  • They subcontracted, then acquired a related pool resurfacing business connected to Andrew’s partner’s uncle.

2. The Partnership Goes South ([03:27]–[04:39])

• Dysfunction Sets In:
  • Andrew manages the pool cleaning and repair side, bringing in $49,000 monthly.
  • The partner’s division is failing: only two jobs in three months, bringing no profit.
  • Communication issues: Andrew’s concerns about performance are deflected with personal excuses (“You wouldn’t understand, you don’t have a child at home” — Andrew’s partner’s response, paraphrased at [03:29]).
  • The partnership agreement is “very vague,” providing no clear recourse.

3. A Bad Acquisition and Mounting Debt ([04:05]–[05:06])

• Poor Decisions and Regrets:
  • The business took on $260,000 in debt to buy the resurfacing business, largely at the partner’s urging (and against Andrew’s reservations).
  • Terms: $4,000/month for five years, supposedly with marketing help.
  • Andrew admits he ignored his gut instinct:

    “But you did it, Andrew. But you did it.” — Dave Ramsey ([04:39])

  • Dave invokes a proverb:

    “The prudent see danger and seek refuge. The simple see danger, move forward, and pay a penalty...I’ve been simple and move forward and pay a penalty.” ([04:42])

4. Strategic Exit: Advice on Ending the Partnership ([05:06]–[07:32])

• How to Escape:
  • The seller (partner’s uncle) allows the business to be “returned” at any time, nullifying debt—but the partner refuses.
  • Dave’s directive:

    “I want you to call the people back and say, I’m going to give you my portion back and deed his portion…Let him have that business, and you go run your other business.” ([05:22])

  • Strong urging to be decisive and assert control:

    “This is your time where your backbone gets installed.” — Dave Ramsey ([07:32])

  • The legal route is on the table if negotiation fails:

    “If you don’t do that, I’m going to hire a lawyer and sue you because you don’t work.” ([06:19])

  • Emphasis on personal agency:

    "You have been too stinking nice to tell people the truth..." ([07:27])

5. Lessons Learned: Why to Avoid Partnerships ([06:33]–[08:13])

• General Principles:
  • Dave reiterates, “Rule of thumb is never do a partnership.” ([06:33])
  • If you must do a partnership, ensure a robust agreement covers contingencies (“when one of the partners is not performing, or doing drugs, or dies, or gets disabled, or gets divorced…” — [06:37])
  • Don't entangle your business with your partner’s personal life.
  • Direct confrontation: Dave pushes Andrew to stop writing drafts and simply have the tough conversation.

    “I don't want to write anything up. I’m going to go sit down, have a cup of coffee and go, dude…We’re not working together anymore. This is how this is ending. I’m done.” ([07:47])

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Notable Quotes & Memorable Moments

• On partnership pitfalls:

  “Partnerships are the only ship that won’t sail, correct?” — Dave Ramsey ([00:55])

• On missed warning signs:

  "The prudent see danger and seek refuge. The simple see danger, move forward and pay a penalty..." — Dave Ramsey ([04:42])

• On assertiveness:

  “This is your time where your backbone gets installed.” — Dave Ramsey ([07:32])

• On closure:

  “Be decisive, Andrew. Clear and decisive.” — Co-host (C) ([08:11])

• On personal regret:

  “I didn’t want to be in this in the first place. I wish I wasn’t.” — Dave Ramsey ([08:02])

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Important Segment Timestamps

• Background & Start of the Business: [00:06] – [01:19]
• The Partnership’s Downward Turn: [01:19] – [03:50]
• Financial Trouble & Regretful Acquisition: [04:05] – [05:06]
• Advice on Exiting the Partnership: [05:06] – [07:32]
• Summary Lessons & Final Coaching: [07:32] – [08:13]

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Takeaway for Listeners

Main message:
Avoid partnerships unless absolutely necessary—and always get legal agreements outlining every scenario. If a partnership goes bad, act decisively to protect your future and financial well-being. Have the hard conversations directly, with clarity and resolve.

This episode provides both a cautionary tale and a practical playbook for breaking free of a failing business partnership. The hosts’ tough, supportive advice is a hallmark of Ramsey’s straightforward approach to life and finance.

Transcript

[A]

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[B]

So I own a pool cleaning, repair and resurface company here in Columbia. I am in a partnership with another guy. We started the business about three summers ago. I had previous experience with a pool company here, one of the bigger ones here, and I decided to branch off, you know, do my own thing. Started pretty small. So me and my partner, we started doing, you know, power washing, window washing jobs, pool cleanings. You know, we didn't have too many clients. Probably about 10 to 15. You know, fast forward to the.

[A]

Why did you need a part?

[B]

Second year at the time? So I had. I. I. Technically I didn't.

[A]

Okay, and now you've learned that partnerships are the only ship that won't sail, correct?

[B]

That's correct.

[A]

I'm guessing you. You two guys did not do anything like go to a lawyer and have a partnership agreement drawn up.

[B]

Initially? No, that happened later on. And it was pretty much too late by, you know, by the time we did make one there.

[A]

Why was it too late? What's. What's happened?

[B]

So basically, we started sub. Last year, we started subcontracting for this. This, the pool resurface company that we actually bought. My partner, he was. It was owned by one of his uncles. His uncles was higher up there, made good money. Anyways, last year, though, I got connected with one of the. My old managers that I actually worked with at the old school pool store I worked at. And I said, hey, what do you think about coming over here? I'll, you know, pay you decent, and we'll, you know, basically start taking a lot of the clients that that pool company that I used to work for has. So I probably took half of their commercial neighborhood pools, plus, I don't know, 10 residential and commercial ones have to be done three times a week. So those come out to 60 visits a week plus repairs. Anyways, when we were. When. Anyways, I had that. That happened last year as we were doing the pool resurfacing. So I got connected with that at the time, that business. Basically, after we got done subcontracting for them, they said, hey, what do you guys think about buying this? You know, obviously it was connected with my partner's family, so he was all about it. He wanted to do it all this. And I said, hey. I was like, how about we just buy the equipment and we slowly build? He disagreed with me. And I eventually just gave in because I, you know, I was like, well, maybe this will work out. So I gave in, you know, And I was nervous about all of it. So anyways, fast forward now to this year. You know, pool, the. I'm basically running the pool repair and pool cleaning side. And you know, for example, last month we brought in about 49,000 revenue. The coat your pool side he is supposed to be running. And he, he's done probably two jobs in the past three months and has brought in, you know, we haven't profited anything from it.

[A]

Why?

[B]

He's, he confronted him about, I said, hey, we need to push this harder, we need to do this. And he basically, he has, he has a kid with his girlfriend and he basically every time I bring it up and say, hey, we need to do this, we need to make more money, we're losing money right now actually. He just says, you wouldn't understand. You don't have a child at home. And things just get awkward after that.

[A]

And you know, so what does a partnership say? About dissolving a partnership? About dissolving it. You have the agreement, right?

[B]

Yeah. So our agreement's very vague, unfortunately. I have actually. All right, so you're actually talking to.

[A]

What did you, did you go into debt to buy this crappy business that crappy guy's running?

[B]

Yeah. So the business is, was 200, 200, 260,000. They basically said, hey, we won't, we won't charge you any interest. Basically a five year plan. You'll pay $4,000 a month, we'll do all your marketing, get all your jobs the first year. And when I heard that, I was just like, initially I was like, oh, I don't want to do this. I expressed it to him multiple times. I said, this is dangerous. We're going to.

[A]

But you did it, Andrew. But you did it.

[B]

Okay, you're correct.

[A]

And so you didn't walk away, even though you knew you were supposed to walk away. So the prudence see danger and seek refuge. The simple see danger, move forward and pay a penalty. And I've been simple and move forward and pay a penalty. So how are we going to get out of this? You owe these people $260,000. It's his uncle. Well, he let his uncle let you off and let him have. Just give him that part of the business. You take the other part.

[B]

So the deal with the businesses is that we can get the business back at any time and we, oh, we can keep the money we made and that is that we can just give it back and there's no more debt. Problem is he doesn't, you know, partner doesn't Want to do that, but he's also not working.

[A]

Yeah, no, that's not. No, no, no, no, no, no, no, no, no, no, no. I want you to call the people back and say, I'm going to give you my portion back and then deed his portion, your partner's portion to him. Let him have that business, and you go run your other business.

[B]

Right, Right. Yeah, he.

[A]

So I let him sit over there in his own poop.

[B]

Yeah.

[C]

Get away from it, Andrew, if you can.

[A]

You gotta get out of there.

[B]

Yeah, walk away. Yeah, well, what I. What I do right now, I really enjoy too. So, you know, you can do the same thing.

[A]

Just take. Take your portion of the business. He signs off and says, this is your portion. I'll take you. You can have the portion that your uncle sold us and you can have the debt and you can have. You can make all the money in the world. Good luck. And you just turn my. Turn this over here loose to me and. And I'll take this and we're splitting up. And if you don't do that, I'm going to hire a lawyer and sue you.

[B]

Yeah.

[A]

Because you don't work.

[C]

How old are you guys, Andrew?

[A]

26.

[B]

I'm 24 and he is 28.

[A]

Like, I've done this before. Okay?

[B]

Yeah.

[A]

So rule of thumb is never do a partnership.

[B]

Right.

[A]

If you are dumb enough to do a partnership, you have to have thorough partnership agreements that deal with when one of the partners is not performing or doing drugs or dies or gets disabled or gets divorced. And you don't want to be in a pool business with his girlfriend. Okay. Or whatever. So all that. And you don't have any of that, so you're screwed is where you are. But if you can go over and sit down with him and go, look, I'm so pissed off. I can't see. This isn't working. I want you to take this whole thing, and I'll take this whole thing and I'll sign over my part to you and you sign over this part over here to me. And if you don't do that, I'm gonna go get a lawyer and sue you because I'm not gonna live like this anymore. It's not working for me. And you have been too stinking nice to tell people the truth and too.

[C]

Nice to stand up for yourself, Andrew, of what you know is right or wrong. So, right, let's.

[A]

This is your time where your backbone gets installed. Okay.

[B]

Right? Yeah. Yeah. So I. I have actually written.

[A]

You're not gonna do it, are you.

[B]

No, I have some. I have already something written up. I'm just.

[A]

I don't want to write anything up. I'm gonna go sit down, have a cup of coffee and go. Dude, you're. I'm gonna sign over this whole thing over here to you. It's gonna be yours. You're gonna sign this whole thing over here to me. It's gonna be mine. We're not working together anymore. This is how this is ending. I'm done.

[B]

Yeah.

[C]

And you can.

[A]

I didn't want to be in this in the first place. I wish I wasn't.

[C]

Your tone could be nicer than that.

[A]

I don't know.

[C]

But be done.

[A]

At least in your head, have that tone.

[C]

Be decisive, Andrew.

[A]

Clear.

[C]

Clear and decisive.

[A]

And don't talk about all the stuff in the past and all that. All that matters is you're fired. That's all that matters. Create your free every dollar budget today. The simplest way to budget for your life.