Partnerships are a common agency leadership model and they can be incredibly effective. But, they can also bring challenges to the business. How you structure and care for your partnership is essential to long-term success.
If you share your agency with other partners — how do you keep it healthy and productive?
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Hey there, Drew McLellan here from Agency Management Institute. This week I am coming to you from Captiva Island, Florida. And you know, I’ve been having a lot of conversations with agency owners lately about partnerships. And, you know, there are some incredible valuesin having a business partner when you run an agency. And we work with agencies that literally have one partner up to seven partners. But there are some do’s and don’ts around having a partnership that are critical. So much like any relationship, a lot of it starts with having a common understanding. So the best way to do that is to document out how you’re going to work together. So early in your partnership, ideally as you’re forming the agency, but if you’ve been in business for a while and you don’t have some of the documents I’m going to talk about, there is no time like today. You do not want to need these documents and then try to create them. So here are a couple of things that every partnership should have to make sure that it runs smoothly in good times and bad. Because here’s the deal. You got into business with someone or a group of someones because you like them and you trust them and they have skillsets that you believe your business needs to be successful. But bad things happen, tough things happen. People’s personal lives blow up. All kinds of things happen that put pressure on the business partnership and you want to have a framework for you to be able to manage whatever those pressures are. Whether they’re business-related or they’re personal. So the first thing you need to have is obviously you need to have an operating agreement. And that outlines things like here’s our responsibilities for each of us in the business and here’s what happens when we don’t fulfill our obligations. Here’s how we divide and decide what work gets done and who’s going to take responsibility for it. On top of that, here’s how we’re going to make a decision when we are locked, when for example we’re two partners and we can’t agree. So you’ve got to have an understanding of how you have difficult conversations, a framework. For some partners it’s a we stay in the room and we don’t leave until it’s resolved. For other partners it might be a we have a conversation, we agree upon next steps, we take 24 hours to think about it, we come back. Much like a marriage counselor would tell you to have a safe word, I’m going to tell you to have a safe word too. And that safe word means I’m not feeling heard in this conversation, I’m not feeling validated in this conversation, I think we need to go into this framework, this more formal way of making a decision for us to move ahead. You also need to have what I would call breakup language. So what happens if one of you gets hurt? Do you have insurances to make sure that their family is covered and that the business is protected? What happens if one of you dies? What happens if one of you wants to break up? And that’s the hardest conversation to have. So just like a prenup or anything else, nobody wants to have that conversation when you’re happy in a relationship. But believe me, having it now and having a formal way that if I’m your business partner I can trigger a breakup and there are rules about how that happens. Or you can trigger a breakup and I have to follow those rules because it’s a signed document will save you so much heartache in the end. I love partners and I love partnerships but it breaks my heart when I see partners struggle because they’re trying to navigate a difficult situation without, sort of, rules of engagement. So if you have a partner today or if you’re thinking about getting a partner, please do your due diligence and sort of explore all of that out and really work through that in a legal document before you ever need it. Hopefully you’ll never need it but I have never met a partnership that didn’t rely on that framework at some point in time. So please don’t wait until you’re in the crisis. Make sure you take care of it while everything is going great, okay? I’ll talk to you next week.