how to deal with difficult partners so
at a great question one of my readers
yishun love you guys
who are in the SE hi mr. Evan I was
interested in knowing about partnerships
like how do we generally need to get
along with each other for instance we
are for people who are doing and working
on the startup but in the end I get
confused that four partners can’t sit in
the same chair and share equal money
with each other even if we do there’d be
an ego clash about sharing equal profits
because of work tasks so could you give
me an idea about what kind of policies
would be implemented in such a situation
amongst us for partners and how money
should be allocated in such instances
thanks and regards so it’s a great
question and one that causes a lot of
stress for people working in
partnerships a lot of times when you
start in the business you think well I
can’t do everything myself and I don’t
have all the skills I need so you find
related people have complementary skills
and everybody’s all excited at the
beginning and then it falls apart as
soon as it starts to get difficult and
tough and being in the partnership is
just like being married where you’re
going to have to go through a lot of
great times but a lot of bad times
together too and you have to make sure
you have the right people with you and
not just jump into something because it
sounds exciting
so dealing partners is hard I’ve had for
the most part great experiences with it
but I want to give you five suggestions
for how to make your partnership work
number one is have aligned vision and
values this is so important that this
may be a little too late for you because
you already have your three partners but
the start is what’s so important right
you need to bring on people who have
complementary skill sets to you but who
have a vision of what you want to build
with you right they love what you’re all
about they love what you stand for they
love the mission that you’re trying to
accomplish they’re aligned right they
love what this company is all about
beyond just making money and they share
the same values this is so important
this is one thing that people almost
never look at you have to just like
getting married you have to be with
somebody who has the same values as you
because most of your fights are going to
be around values related stuff and if
you
share different values it’s not going to
work you can’t get somebody to change
what their core values are it’s better
to align yourself with people who have
the same core values as you and you have
the complementary skill set so there’s a
lot of work that you have to do right up
front to make sure that you’re bringing
in the right partners from the start
number two is have defined rules so you
may not be able to choose your partners
now that you already have your three
business partners but you can have very
clearly defined roles you have to know
who’s doing what I’ve no idea what your
company does I’ve no idea what
everybody’s responsibilities are but you
have to set that up you have to know
that you’re in charge of this this guy’s
in charge of this she’s in charge of
that you have clearly defined roles and
you don’t step on each other’s toes have
a job description and somebody’s got to
be the CEO but you don’t have a four
headed monster at the top of this thing
pick one person who’s the best person to
lead this business forward that’s your
president that’s your CEO everybody else
has their roles they have the
responsibilities and you’re not stepping
on each other’s toes otherwise it’s
mayhem you’re never going to agree
you’re always going to be fighting over
what to do and that means no progress
for the company
number three pay for performance and
split the profits so you’re asking about
how do you how do you get paid how do
you decide who’s worth what enticed with
the profits I’m assuming you’re equal
partners right you for your equal
partners in the business what you want
to do here is you get paid in two ways
one you have equity right so if you’re
going to give a dividend to the owners
or if you’re going to have a management
bonus or if you’re going to have profit
sharing that should be equal right it
should be based on how many shares you
have if if somebody owns twice as many
shares as somebody else amongst your
four partners then that person gets
twice as much of a dividend when you’re
sharing those profits at the end of the
year or however you’re going to do it
right so the profit sharing is equal but
what doesn’t have to be equal
necessarily is the performance based pay
so you want to make sure that everybody
that is on the team is getting paid
right the Presidents getting paid you’re
developers are getting paid your market
birds are getting the paid however you
split up your four roles everybody is
getting
and typically what companies will do is
figure out how much would it cost to
replace that person about to go in hire
so I’m going to come out to be that
person to be that lead programmer to be
that marketing director to be that CEO
what would it cost me to find a
replacement salary for and that’s how
much that person gets paid now at the
start of a new business you don’t have a
lot of money you’re not raking it in yet
so quite often what companies will do is
everybody gets the same pay everybody
gets the same profit chairs until you
start making some real money and then
people start to fight right when there’s
no money when the company’s not making
anything you don’t have fights over
who’s taking what because there’s not
enough but when your company starts to
make money then people start feeling
like hey I’m worth more I’m adding more
value here
I should be earning a higher salary and
what you can do is look at what that
person is bringing and what real cost to
replace them so everybody can pretend
you have a different salary if people
are bringing different value if it’s
more expensive to replace one person in
another but if you’re owning equal
shares then you split the profits
equally number four is have a tiebreaker
sometimes people fight and you’ll have
partners who just do not agree on
something and you need to have somebody
who can be that tiebreaker for you so
you’re in a situation where you have
four partners right so you might have
three partners against one or or four
against none which is great but the
problem comes what have two people agree
on one side and two people agree on the
other side how do you how do you solve
that what a lot of companies will do is
they have an advisor who will be a part
of the company and own 1% of the shares
and that person is called on to split
the vote right so it might be your
accountant there might be a lawyer
potentially a banker somebody who can
add value to your business who can give
you advice it could be a coach it could
be a mentor could be a business person
you look up to who owns a really small
piece of the company and they can come
on board if you guys are ever in a
deadlock that you can’t get past because
you need to make a decision to move on
you will not have success just
constantly fighting amongst each other
and so a lot of companies who are in
partnerships will have that person set
up as a type
and number five is have a great
shoulders agreement as sad as it is to
say you know I’m the guy who believes
but as sad as it is the same most
partnerships don’t work out and now
you’re talking about having four people
in a partnership it’s probably not going
to work out with everybody staying on
board for years and years if you look at
the history of companies it’s very very
very rare that happens and so what you
want to do is make sure you have a great
shareholders agreement and what it does
is outlines the rules for coming in or
leaving a partnership so for example one
of the causes you want to have is as a
shotgun agreement so you need the
shotgun clause you’ve got to have that
in a basically what it means is you can
if somebody’s being a big pain you know
you just cannot get along with this
other partner or two partners or par you
know that one of them has to leave they
can invoke the shotgun clause and what
it does is basically says either I’m in
or you’re in and I set the price I think
the value of my shares are worth this
amount of money so you can either buy me
for that amount of money or I’m going to
buy you for that same amount of money
and they have to make the decision and
somebody’s in and somebody’s out and
they set the rules and this way you’re
not going to court and you’re not
continuing to fight and it doesn’t cause
a whole bunch of issues but a good
charles greane will also outline other
issues so for example if if somebody
buys you out right same somebody wants
to acquire your business do they buy out
all the other partners or not or can
they just buy out too and on 50% of the
shares right does everybody have to
agree if somebody’s selling the shares
can I go sell my shares to my best
friend who’s now going to own part of
your business is that okay
right or do you have right of first
refusal if I die do my shares go to my
wife right and then she’s a partner in
your business is that okay or do you
have right of first refusal right all of
these things can be figured out because
chances are somebody’s going to have a
problem with the business and it may be
easy to solve but typically it’s not and
so having a good shows agreement will
save you aggravation
money and help your business continue to
grow so in summary how to deal with
difficult partners number one have
aligned vision and values number two
have defined roles
number three pay for performance split
the profits number four have a
tiebreaker
and number five have a great
shareholders agreement and believe for
those who are watching like the video
you can subscribe to the channel to see
more just like this thank you so much
for watching
I’ll see you soon don’t forget to check
out my newsletter click the link below
hi I’m Jason Grif on seeker of razz
online comm and I want to say Evan
Carmichael’s newsletter is consistent
fun inspiring and XD only newsletter I
prioritize and look forward to period
at a great question one of my readers
yishun love you guys
who are in the SE hi mr. Evan I was
interested in knowing about partnerships
like how do we generally need to get
along with each other for instance we
are for people who are doing and working
on the startup but in the end I get
confused that four partners can’t sit in
the same chair and share equal money
with each other even if we do there’d be
an ego clash about sharing equal profits
because of work tasks so could you give
me an idea about what kind of policies
would be implemented in such a situation
amongst us for partners and how money
should be allocated in such instances
thanks and regards so it’s a great
question and one that causes a lot of
stress for people working in
partnerships a lot of times when you
start in the business you think well I
can’t do everything myself and I don’t
have all the skills I need so you find
related people have complementary skills
and everybody’s all excited at the
beginning and then it falls apart as
soon as it starts to get difficult and
tough and being in the partnership is
just like being married where you’re
going to have to go through a lot of
great times but a lot of bad times
together too and you have to make sure
you have the right people with you and
not just jump into something because it
sounds exciting
so dealing partners is hard I’ve had for
the most part great experiences with it
but I want to give you five suggestions
for how to make your partnership work
number one is have aligned vision and
values this is so important that this
may be a little too late for you because
you already have your three partners but
the start is what’s so important right
you need to bring on people who have
complementary skill sets to you but who
have a vision of what you want to build
with you right they love what you’re all
about they love what you stand for they
love the mission that you’re trying to
accomplish they’re aligned right they
love what this company is all about
beyond just making money and they share
the same values this is so important
this is one thing that people almost
never look at you have to just like
getting married you have to be with
somebody who has the same values as you
because most of your fights are going to
be around values related stuff and if
you
share different values it’s not going to
work you can’t get somebody to change
what their core values are it’s better
to align yourself with people who have
the same core values as you and you have
the complementary skill set so there’s a
lot of work that you have to do right up
front to make sure that you’re bringing
in the right partners from the start
number two is have defined rules so you
may not be able to choose your partners
now that you already have your three
business partners but you can have very
clearly defined roles you have to know
who’s doing what I’ve no idea what your
company does I’ve no idea what
everybody’s responsibilities are but you
have to set that up you have to know
that you’re in charge of this this guy’s
in charge of this she’s in charge of
that you have clearly defined roles and
you don’t step on each other’s toes have
a job description and somebody’s got to
be the CEO but you don’t have a four
headed monster at the top of this thing
pick one person who’s the best person to
lead this business forward that’s your
president that’s your CEO everybody else
has their roles they have the
responsibilities and you’re not stepping
on each other’s toes otherwise it’s
mayhem you’re never going to agree
you’re always going to be fighting over
what to do and that means no progress
for the company
number three pay for performance and
split the profits so you’re asking about
how do you how do you get paid how do
you decide who’s worth what enticed with
the profits I’m assuming you’re equal
partners right you for your equal
partners in the business what you want
to do here is you get paid in two ways
one you have equity right so if you’re
going to give a dividend to the owners
or if you’re going to have a management
bonus or if you’re going to have profit
sharing that should be equal right it
should be based on how many shares you
have if if somebody owns twice as many
shares as somebody else amongst your
four partners then that person gets
twice as much of a dividend when you’re
sharing those profits at the end of the
year or however you’re going to do it
right so the profit sharing is equal but
what doesn’t have to be equal
necessarily is the performance based pay
so you want to make sure that everybody
that is on the team is getting paid
right the Presidents getting paid you’re
developers are getting paid your market
birds are getting the paid however you
split up your four roles everybody is
getting
and typically what companies will do is
figure out how much would it cost to
replace that person about to go in hire
so I’m going to come out to be that
person to be that lead programmer to be
that marketing director to be that CEO
what would it cost me to find a
replacement salary for and that’s how
much that person gets paid now at the
start of a new business you don’t have a
lot of money you’re not raking it in yet
so quite often what companies will do is
everybody gets the same pay everybody
gets the same profit chairs until you
start making some real money and then
people start to fight right when there’s
no money when the company’s not making
anything you don’t have fights over
who’s taking what because there’s not
enough but when your company starts to
make money then people start feeling
like hey I’m worth more I’m adding more
value here
I should be earning a higher salary and
what you can do is look at what that
person is bringing and what real cost to
replace them so everybody can pretend
you have a different salary if people
are bringing different value if it’s
more expensive to replace one person in
another but if you’re owning equal
shares then you split the profits
equally number four is have a tiebreaker
sometimes people fight and you’ll have
partners who just do not agree on
something and you need to have somebody
who can be that tiebreaker for you so
you’re in a situation where you have
four partners right so you might have
three partners against one or or four
against none which is great but the
problem comes what have two people agree
on one side and two people agree on the
other side how do you how do you solve
that what a lot of companies will do is
they have an advisor who will be a part
of the company and own 1% of the shares
and that person is called on to split
the vote right so it might be your
accountant there might be a lawyer
potentially a banker somebody who can
add value to your business who can give
you advice it could be a coach it could
be a mentor could be a business person
you look up to who owns a really small
piece of the company and they can come
on board if you guys are ever in a
deadlock that you can’t get past because
you need to make a decision to move on
you will not have success just
constantly fighting amongst each other
and so a lot of companies who are in
partnerships will have that person set
up as a type
and number five is have a great
shoulders agreement as sad as it is to
say you know I’m the guy who believes
but as sad as it is the same most
partnerships don’t work out and now
you’re talking about having four people
in a partnership it’s probably not going
to work out with everybody staying on
board for years and years if you look at
the history of companies it’s very very
very rare that happens and so what you
want to do is make sure you have a great
shareholders agreement and what it does
is outlines the rules for coming in or
leaving a partnership so for example one
of the causes you want to have is as a
shotgun agreement so you need the
shotgun clause you’ve got to have that
in a basically what it means is you can
if somebody’s being a big pain you know
you just cannot get along with this
other partner or two partners or par you
know that one of them has to leave they
can invoke the shotgun clause and what
it does is basically says either I’m in
or you’re in and I set the price I think
the value of my shares are worth this
amount of money so you can either buy me
for that amount of money or I’m going to
buy you for that same amount of money
and they have to make the decision and
somebody’s in and somebody’s out and
they set the rules and this way you’re
not going to court and you’re not
continuing to fight and it doesn’t cause
a whole bunch of issues but a good
charles greane will also outline other
issues so for example if if somebody
buys you out right same somebody wants
to acquire your business do they buy out
all the other partners or not or can
they just buy out too and on 50% of the
shares right does everybody have to
agree if somebody’s selling the shares
can I go sell my shares to my best
friend who’s now going to own part of
your business is that okay
right or do you have right of first
refusal if I die do my shares go to my
wife right and then she’s a partner in
your business is that okay or do you
have right of first refusal right all of
these things can be figured out because
chances are somebody’s going to have a
problem with the business and it may be
easy to solve but typically it’s not and
so having a good shows agreement will
save you aggravation
money and help your business continue to
grow so in summary how to deal with
difficult partners number one have
aligned vision and values number two
have defined roles
number three pay for performance split
the profits number four have a
tiebreaker
and number five have a great
shareholders agreement and believe for
those who are watching like the video
you can subscribe to the channel to see
more just like this thank you so much
for watching
I’ll see you soon don’t forget to check
out my newsletter click the link below
hi I’m Jason Grif on seeker of razz
online comm and I want to say Evan
Carmichael’s newsletter is consistent
fun inspiring and XD only newsletter I
prioritize and look forward to period
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