WEBVTT 1 00:00:00.000 --> 00:00:03.440 Jason bringing you on a business partner. Don't do it and go ahead 2 00:00:05.120 --> 00:00:07.120 So 3 00:00:07.200 --> 00:00:10.080 Welcome to the game where we talk about how to get more customers how to make more 4 00:00:10.080 --> 00:00:13.920 Procure now to keep them longer and the many failures and lessons we have learned along the way 5 00:00:13.920 --> 00:00:19.040 I hope you enjoy and subscribe welcome to the call today. I want to open the floor up 6 00:00:20.000 --> 00:00:21.840 To ask you guys 7 00:00:21.840 --> 00:00:24.640 Because I'm sure because it's been it's been 30 days since last time we spoke 8 00:00:24.880 --> 00:00:29.040 So if you guys have questions in the chat burning burning things decisions that are impending 9 00:00:29.760 --> 00:00:35.760 Things you're unsure about strategies that you need to validate or even just a a verbal high five please put in the chat and then 10 00:00:37.360 --> 00:00:42.880 I'll go him go him from top to bottom Jason bringing you on a business partner. Don't do it and go ahead 11 00:00:44.720 --> 00:00:46.400 So 12 00:00:46.400 --> 00:00:52.240 I've had this business for over a decade and Lee Jen's just net. It's always been my weakest function 13 00:00:52.800 --> 00:00:54.800 And I'm more 14 00:00:55.760 --> 00:01:01.120 What's that? Can I pause you real quick on that one point? How many hours a day do you spend working on Lee Jen? 15 00:01:04.000 --> 00:01:07.120 Not a lot because I get caught up in other stuff. Yeah, so 16 00:01:07.760 --> 00:01:13.120 So you're doing a partnership with Kyle and you're making the inspiration. You want to know the decision process. Is that right? 17 00:01:14.960 --> 00:01:19.600 Yeah, I mean a I want to know if it's a good idea which I know there's risks involved 18 00:01:19.680 --> 00:01:25.280 So then I'm like what what are the risks and what consideration? I'm meeting with Elizabeth Morgan this evening 19 00:01:25.840 --> 00:01:31.920 Bring up my concerns, but I wanted to get your feedback because you've probably seen a lot. You've been I've had eight field partnerships 20 00:01:32.000 --> 00:01:34.000 So I know nothing about this 21 00:01:34.400 --> 00:01:38.160 Is you have to have read like talk about all the ugly shit first? Yeah 22 00:01:38.800 --> 00:01:45.920 Right, so right now you guys are in lust right you guys are like making out getting you know having haven't failed sex and just like it's things are amazing 23 00:01:46.320 --> 00:01:53.760 Right, you don't want to have the really ugly like how are we going to split up alimony if we you know if we get divorced later conversation right exit strategy all that 24 00:01:54.320 --> 00:01:59.680 Yeah, so like that's what has to get defined and you now could define roles and responsibilities 25 00:02:00.080 --> 00:02:03.280 The only reason to have a partner is if they have skills you do not have 26 00:02:03.920 --> 00:02:09.440 Or they have money you don't have or they have time you don't have if you're on the flip side like you have money and they have time right 27 00:02:10.000 --> 00:02:11.360 So 28 00:02:11.440 --> 00:02:15.360 That's where that's where partnerships are useful the number one way most people do partnerships 29 00:02:15.360 --> 00:02:19.600 So it's like hey, I'm cool. You're cool. We love the same thing. Let's go into business together 30 00:02:19.920 --> 00:02:24.320 Which is a terrible way to do a partnership because one of us is not necessary right and you're saluting equity 31 00:02:24.880 --> 00:02:30.240 Right that being said are you looking at doing a true partnership or are you looking on doing like a minority type deal 32 00:02:31.840 --> 00:02:35.440 Um, I would always maintain a majority and it would be a scaling 33 00:02:35.600 --> 00:02:43.920 You know my companies and escorp so he would basically get a piece of the company as he helps me hit certain million dollar milestones 34 00:02:44.320 --> 00:02:47.840 At to the point of max maybe like a third of the company 35 00:02:48.560 --> 00:02:53.760 Okay, well, that's that's different. That's more like a performance-based relationship with kickers 36 00:02:55.120 --> 00:02:57.520 I would I would structure it as phantom equity 37 00:02:59.360 --> 00:03:03.760 Which means what so it's equity that doesn't actually invest in unless there's a sale 38 00:03:04.720 --> 00:03:07.600 And if he were to leave then he doesn't get the equity 39 00:03:08.960 --> 00:03:13.280 And so you can pair those two things together so you can do like equity with profit sharing and so 40 00:03:14.960 --> 00:03:17.360 That that would be that would be probably how I would structure it 41 00:03:18.160 --> 00:03:21.120 Either profit share or rev share depending on you know how you negotiate it 42 00:03:22.480 --> 00:03:24.480 Okay 43 00:03:27.360 --> 00:03:29.760 But just as it just a side of everyone on here like 44 00:03:30.720 --> 00:03:35.920 I remember I had a mentor really early on he's like and I was taking on all these partners left and right because I didn't know what I was doing 45 00:03:36.480 --> 00:03:40.720 And uh, he's like listen, you're gonna need an account. He's like you just pay the account 46 00:03:41.760 --> 00:03:45.520 He's like he's not a part. He's not a partner in my business. He's like I just really come right 47 00:03:45.520 --> 00:03:48.720 So it's like just because you have a need doesn't mean they have to be equity owner, right? 48 00:03:48.720 --> 00:03:52.320 There's plenty of companies that are owned by people who are not lead generation specialists 49 00:03:53.600 --> 00:03:54.720 You know 50 00:03:54.720 --> 00:04:01.200 So I think if it were me I'd probably try and set up a really lucrative relationship that isn't necessarily a partnership 51 00:04:01.680 --> 00:04:05.280 So I'd say like you know, it's pay per or eight percentage of 52 00:04:06.800 --> 00:04:08.800 Something something to that extent, right? 53 00:04:09.760 --> 00:04:14.240 I don't know if you're ever planning on selling because the only reason someone would ever want equity is if they want control 54 00:04:14.800 --> 00:04:19.360 Or they want to be able to make money on an exit so the only two reasons you want equity otherwise equity sucks 55 00:04:20.480 --> 00:04:22.480 Because then you just have liability which blows 56 00:04:23.440 --> 00:04:27.840 So unless he wants control which I don't think he does and unless you think you're gonna sell which I don't think you are 57 00:04:28.160 --> 00:04:31.920 Or I don't think you want to just you've been doing it for a decade unless you're just sick and tired of it 58 00:04:31.920 --> 00:04:33.920 But I don't I don't get that impression 59 00:04:34.240 --> 00:04:39.520 Right, so then the only thing that that he should want or that you should probably negotiate for us the stuff that he wants 60 00:04:39.520 --> 00:04:43.680 Which is a percentage of revenue or percentage of profit based on XYZ 61 00:04:43.840 --> 00:04:47.760 So I think that's what you should I don't think you need to make this an equity partnership at all. I think you just need an agreement 62 00:04:48.640 --> 00:04:50.640 Hmm, okay 63 00:04:52.640 --> 00:04:54.160 That makes sense 64 00:04:54.160 --> 00:04:57.920 Yeah, you just need a performance agreement. This is like standard 65 00:04:57.920 --> 00:05:03.920 You know, there's tons of e-commerce companies that like they take 10% of top line from from sales attributed to the marketing that they make in their full service 66 00:05:05.920 --> 00:05:09.040 They don't have equity in the company, but they get they get a percentage of revenue 67 00:05:09.760 --> 00:05:11.760 Hmm got it 68 00:05:12.480 --> 00:05:19.600 Yeah, I guess I have to see or talk to kind of figure out like why would equity matter to them because yeah 69 00:05:19.680 --> 00:05:25.120 I bet like just say what do you want exit or the or control but right just ask what do you want 70 00:05:26.080 --> 00:05:28.080 He's probably gonna say I want to purchase me on the outside cool 71 00:05:28.240 --> 00:05:31.360 What specifically because if it's the sale I'm not gonna sell so what specifically? 72 00:05:31.440 --> 00:05:33.520 I want a piece of what I'm bringing it cool 73 00:05:33.920 --> 00:05:38.960 So then let's do it based on do X or X or Y for you would be advantage to do profit share for him 74 00:05:38.960 --> 00:05:40.480 It'd be advantage to do a rupture 75 00:05:40.800 --> 00:05:42.800 So do you 76 00:05:43.760 --> 00:05:44.800 Hey 77 00:05:44.800 --> 00:05:49.680 Amos in Asian quick break just to let you know that we've been starting to post on linked in and want to connect with you 78 00:05:50.000 --> 00:05:54.240 All right, so send me a connection request and note letting me know that you listen to the show and I will accept it 79 00:05:54.400 --> 00:05:58.480 There's anyone you think that we should be connected with tag them in one of my or layless posts 80 00:05:58.880 --> 00:06:02.000 And I will give you all the love in the world. All right, so let's get back to the show 81 00:06:06.320 --> 00:06:09.680 Okay, that makes sense and the next question looks like it's relevant 82 00:06:10.640 --> 00:06:17.120 Peter's exit, yeah, okay, so Peter this is for you how to sever ties with the business partner and best practices go separate ways 83 00:06:17.680 --> 00:06:22.720 So it depends on whether you have a kid or not right and how good looking the kid is and how much money the kid makes right and so 84 00:06:23.280 --> 00:06:26.080 You guys have a business if the business isn't making a ton of money 85 00:06:26.720 --> 00:06:32.080 Then most of these times you can just be like hey man like why don't we just both fuck off and go our separate ways 86 00:06:32.560 --> 00:06:35.520 It's even worse than that the business isn't making any money and has 87 00:06:36.480 --> 00:06:38.480 The debt then needs to be paid off 88 00:06:39.520 --> 00:06:42.000 So then you can just I mean then at that point you should just split the debt 89 00:06:42.560 --> 00:06:46.320 If you want to if you like you can split the debt or you can 90 00:06:46.960 --> 00:06:49.520 Is this an LLC that you are ending or is this in general? 91 00:06:50.560 --> 00:06:54.320 So so the way the business is set up is it is an LC 92 00:06:55.360 --> 00:06:57.520 And then I have obviously my own agency 93 00:06:58.160 --> 00:07:04.560 So the to the idea was to use my agency to generate sales to then pay the debt of the other LLC back 94 00:07:05.600 --> 00:07:07.600 However 95 00:07:07.600 --> 00:07:11.040 I'm responsible for the backend. He's responsible for the front end like the sales 96 00:07:11.680 --> 00:07:13.680 Yeah last six months 97 00:07:13.680 --> 00:07:18.320 He hasn't really brought in any sales so now that I'm selling and doing everything 98 00:07:21.280 --> 00:07:25.040 Exactly now it becomes a point of like okay, this debt is 50 50 99 00:07:25.840 --> 00:07:33.360 However, if I'm doing 100% of the work, why should I also pay 100% of the debt and fulfill the product and do everything else on the backend? 100 00:07:33.840 --> 00:07:38.960 Yeah, I mean I figure out like how to rip that bandaid off and say, you know 101 00:07:40.800 --> 00:07:45.920 It's the easiest way to easyest way to have have hard conversations is just ask the questions that you ask here 102 00:07:47.680 --> 00:07:52.320 So like literally the biggest hack in all of relationships is the way that you talk shit about someone behind their back is literally 103 00:07:52.320 --> 00:07:54.400 We should just tell them so it's like hey, man 104 00:07:54.960 --> 00:07:58.160 You said that you were gonna do all the sales and I was gonna do the backend 105 00:07:58.160 --> 00:08:02.480 Well, you're not doing the sales but we're still both responsible for this thing. So what do you think's fair? 106 00:08:04.320 --> 00:08:11.440 You'll have what you have in mind, but a lot of time people who once you once you present the information like that will be like 107 00:08:11.920 --> 00:08:13.520 Ah fuck you're right 108 00:08:13.520 --> 00:08:17.680 Like so what do you think's fair is like well, you should just take the business and um 109 00:08:19.200 --> 00:08:23.760 I guess I can try and start paying off my share over time. You're like cool. That's what I was thinking too 110 00:08:24.400 --> 00:08:30.560 Let's sign these that way that you know the things dissolved and then uh you transfer your equity to me and you have a note 111 00:08:31.040 --> 00:08:33.040 Back to me for 50% of the debt 112 00:08:34.080 --> 00:08:36.080 You 113 00:08:36.080 --> 00:08:38.080 Cool that makes sense. Yeah 114 00:08:38.960 --> 00:08:41.120 You can google promissory notes 115 00:08:41.360 --> 00:08:43.440 template one page 116 00:08:43.440 --> 00:08:50.160 It's just like from borrower to lender no interest x amount by this paid by the state in this increment 117 00:08:50.880 --> 00:08:52.080 like 118 00:08:52.080 --> 00:08:56.560 What what happens if they default and that's it like it's a very simple like 119 00:08:57.840 --> 00:09:01.520 I've done million dollar loans on one page like you're there they hold up 120 00:09:04.080 --> 00:09:06.720 And you're in real estate, so you should find plenty of promise ordinance that are simple 121 00:09:07.920 --> 00:09:09.520 Yeah, that makes sense 122 00:09:09.520 --> 00:09:13.200 So equity that's to where investors are to our lenders, right? 123 00:09:13.200 --> 00:09:14.800 So I want to make sure like 124 00:09:14.800 --> 00:09:19.360 So this the equity and the debt so there's two pieces right the equity you just say hey 125 00:09:19.360 --> 00:09:21.360 I own 100% of this company 126 00:09:21.360 --> 00:09:26.720 You're giving your shares to me because you're not doing shit right that's number one or we dissolve the company 127 00:09:26.720 --> 00:09:29.280 I create a new entity. I'd prefer to save $300 since up to you right 128 00:09:30.160 --> 00:09:31.920 With the thing is is you could do that right now 129 00:09:31.920 --> 00:09:35.520 It doesn't like and you could just say like I don't really give a shit if you sign this and it saves me 300 bucks 130 00:09:35.520 --> 00:09:38.080 Like this is not really discussion because there's nothing here right 131 00:09:38.800 --> 00:09:43.520 The the second piece is is okay now let's now that we've dealt with the equity piece now 132 00:09:43.520 --> 00:09:48.640 Let's deal with the debt piece right and so the debt piece this is what we both oh this is what we agreed on 133 00:09:48.720 --> 00:09:55.280 This is what I will do and this is the promissory note that you can write you know or we can both sign together towards the lenders 134 00:09:55.760 --> 00:09:57.760 Okay 135 00:09:57.760 --> 00:10:00.320 Okay, makes sense and then you get then you're done 136 00:10:01.600 --> 00:10:08.880 Yeah, and then as far as his involved in my agency just he can quote unquote sell my product and earn a commission and do whatever he 137 00:10:09.360 --> 00:10:12.960 Seems with it or or not because that's the other 138 00:10:14.000 --> 00:10:16.640 You know tricky part is he's also involved in my agency 139 00:10:17.360 --> 00:10:21.040 But more so because he doesn't make any money so it's not like he's gonna start making money now 140 00:10:21.680 --> 00:10:23.680 Yeah, okay, right? 141 00:10:24.320 --> 00:10:27.040 Yeah, that's kind of what I'm thinking as well. Yeah, it's like let's 142 00:10:27.040 --> 00:10:30.000 Let's discuss about the fact that it's like what if he gets rich on my product 143 00:10:30.000 --> 00:10:33.040 He wasn't getting rich on your fucking product for the last two years so like I don't think it's just 144 00:10:34.800 --> 00:10:40.480 Yeah, no, my my thing was like I wanted I want him to pull some cells in for us to actually sell the product 145 00:10:40.480 --> 00:10:42.640 Because then we would actually pay the other thing. Oh, that's fine 146 00:10:42.640 --> 00:10:47.760 Then I would say and on top of this I'll still continue to give you the the thing you still sell it and you know 147 00:10:47.760 --> 00:10:49.760 We split the revenue 148 00:10:49.760 --> 00:10:51.760 Okay, cool 149 00:10:51.760 --> 00:10:54.480 Sweet