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How to successfully manage an agency with multiple owners

This SAGA Member Webinar is available only to individuals with active memberships. Login or join to gain access.
Webinar presented live on April 18, 2024

When an agency has more than one shareholder, it is important to intentionally manage the partnership to get the best results and avoid potential pitfalls.

In this webinar, Chip Griffin explores ways to structure your partnership for success. He suggests processes, meeting schedules, and reporting systems that will help to get the most value.

Chip also looks at some of the common reasons that partnerships may fail and the steps that you can take to minimize the risk of that happening to the business and its owners.

This webinar also suggests some of the steps that every agency with multiple partners should take to manage the 5 D’s that can threaten its stability: disputes, death, disability, divorce, and departure.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Hello and welcome to today’s webinar on how to successfully manage an agency with multiple owners, also known as a partnership. I’m your host, Chip Griffin, the founder of SAGA, the Small Agency Growth Alliance. And I’m really excited to talk about this topic today because I work with a number of agencies with partners and I know that there are constant struggles trying to figure out how best to, to get the most out of that partnership.

And so that’s really what we’re going to be focused on today. Alongside of trying to make sure that you avoid potential pitfalls of any partnership. Anytime you’re bringing together multiple owners in a business, it does increase the level of complexity. So, before we do that though, I would like to jump into a couple of housekeeping items here for everyone.

First of all, the full webinar replay will be available on the SAGA website. So if you, well obviously if you’re watching this on replay, you already know that. If you’re watching this live, it gives you an opportunity to go back and re watch it, and that replay will be available in the next day or two.

If you are attending live, I will be taking questions at the end of the main presentation, but you can use the Q& A function on Zoom at the bottom of your screen to submit your question at any time throughout the course of the presentation itself. If you’re watching on replay, you won’t be part of that live Q& A, but you’re welcome to email me directly at chip@smallagencygrowth.com. I would also encourage you to join the SAGA community on Slack, where you can ask questions not only of me, but of other agency owners, so you can get feedback from your peers, in addition to whatever insight that I might provide. If you’re talking about this webinar on social media, I’d love it if you would use the hashtag agency leadership, so it’s easy to track and others to join in as well.

And finally, if you are interested in finding any of the resources that I may mention over the course of today’s webinar, or any of the other countless resources that we’ve created over the years at SAGA, just go to smallagencygrowth.com. There’s a search icon in the top right that will help you to find just about anything you want on any topic, whether it’s from one of the webinars that I do, podcasts, articles, workbooks, etc.

So, with that housekeeping stuff out of the way, let’s talk about what we’re going to actually cover over the course of today’s session. First of all, I’ll recap a couple of things that I always talk about whenever I’m discussing partnerships in these kinds of settings. I’ll talk about the foundations of the partnership, what it is philosophically, and I often compare it to being a marriage, basically a business marriage.

We’ll talk about some of the paperwork, things that need to set the foundation for the actual management of the business going forward. But then we’ll dive into the keys for success, how you can get the most out of bringing together multiple owners, because presumably, if you are not going to own 100 percent of the business, you see a value in teaming up with your fellow owners.

And so we’ll talk about how to get the maximum return on that investment. I’ll talk a little bit about the difference between being an equity partner, in other words, an owner, as well as also being an employee, which is typically what happens in small agencies. And those are two distinct roles that we’ll want to explore because that’s key to a successful management endeavor.

We’ll talk about checks and balances because that’s an important thing. Making sure you’re crossing the Ts, dotting the Is, doing all the things appropriately, and making sure that everybody within the ownership structure is being responsible. We’ll talk about actual roles and responsibilities, how to divvy those up, and how to understand what they are. We’ll talk about the meetings that you’ll want to be having on a regular basis. And we’ll talk about what the things are that you ought to include in those in order to make them more successful. We’ll talk about handling conflict resolution, the inevitable things that pop up from small to large over the course of any kind of marriage, whether it’s a personal one or a business one.

And then finally I’ll talk about renewing your vows. In other words, reviewing the health of the partnership and recommitting to it periodically to make sure that it really is continuing to work with everyone involved. And I come to this, just so you know, from the perspective of someone who has been in a number of different partnerships over the years.

I’ve advised a lot of partnerships and I’ve been an employee in partnership owned businesses as well. So I’ve seen it from just about every angle possible. I’ve seen things that work. I’ve seen things that haven’t. worked. I’ve worked with agencies where I’ve had to say, I actually can’t help you because your partnership is too far broken.

And here’s, here’s why. but I’ve more often than not been able to find ways to work with agencies to help them navigate the challenging waters that can be a partnership in order to get that real benefit that you can have about having a bunch of smart people around the table who are all fully invested in its success.

So let’s talk a little bit about This concept that I’ve just talked about about a partnership being effectively a business marriage. And if we’re thinking about it in those terms, then we need to understand what we’re getting into. It’s in some ways harder to get out of a business partnership than it is to get out of a marriage.

In marriages, there are a lot of structures in place within the law and other things that help you to navigate divorce. When it comes to getting out of a business partnership, though, it can be a lot trickier. And that partnership that I was referencing that I wasn’t able to help a number of years ago, it It was because there was a 50 50 partnership and they were at an impasse, there was no way to resolve it.

There was just no tool that they could use based on how they had set it up. So, you need to think about those kinds of paperwork things in advance. And it is much more complicated to have a business partner than an employee. Employees you can fire, partners you typically can’t. And so understanding that you don’t rush into a partnership, it really needs to be something that you are committed to, that you have a shared vision for, that you have shared values, and that you are prepared to stick this out for the entire lifespan of your business.

In some ways, it’s a little bit more like having kids, I suppose. And then finally, you also need to remember that the more partners you bring into the business, the more complex it gets. And for the purposes of today’s discussion, we’re going to focus primarily on the partnerships that are common in small agencies, where the partners are true partners, they are active owners and employees in the business. We’re not going to talk about what you may see as partners in large agencies, where lots of people get the title. They may get technically some sort of equity piece, but they are not in a management sense a partner in the business. And so we’re going to focus really on that traditional partnership structure that you typically see in agencies of, say, you know, two or three people all the way up to 30 or so.

And that’s going to be the focus of our conversations here. So if we then talk about the paperwork, this is something that you always need to make sure you have in place. And I start every partnership conversation with this reminder, because if you don’t have the right paperwork in place, it opens the door to all sorts of potential problems.

So make sure you have two things in place that you work with lawyers and accountants to get this up. Make sure you have a partnership or operating agreement that explains what’s the equity split, what’s the decision making, what are the responsibilities, what are the rights of each individual shareholder.

Cover all of those things so that it’s absolutely clear you’re all on the same page. But perhaps even more important, have a buy sell agreement. A buy sell agreement is a document that helps guide how you dispose of or sell your equity in the business and how your partners can do the same. It takes care of voluntary transactions where someone wants to leave.

It takes care of involuntary transactions. transactions, whether that’s, you know, any of the big D’s. Death, disability, divorce, dismissal, departure, all those things. It handles those kinds of situations so that you know in advance what’s going to happen. And it may also cover what the valuation of the business will be in certain of these cases.

If you’re interested in learning more about all of this paperwork, there are webinars and there are articles on the SAGA website that will go more in depth, but just for the purposes of today’s discussion, make sure that you have this paperwork in place because it puts a lot of pressure on the effective management of the business if you don’t, because now you’re trying to deal with things that you could have easily handled when times were good, when you were all excited and starting the business and now becomes more problematic as you try to handle it as the problems arise.

So really make sure that you’ve got this paperwork in place. All right, but now the real meat of this presentation. How do you make your partnership work successfully? And it all starts, as most relationships do, with clear communication. What does that mean? That means that there shouldn’t be any surprises.

And when you’re a partner in the business, these surprises go beyond just making sure that your partners are aware of any potential issues with clients or aware of other problems that you may be aware of within the business. In a partnership, you also have to make sure that there are no surprises from a personal standpoint that may override and come into the business.

So for example, if you have a serious illness, you need to make sure that your partners are aware of it. You may even want to do that if you have family members because, who are sick or otherwise in trouble, because it can bleed over into your ability to run the business. And because you are not a traditional employee, because it is a lot more difficult for you to just extract yourself if you are a co owner of the business, you owe it to your partners to be having these conversations and making sure that they are in.

As in the loop as possible and as necessary to make sure that there are no surprises of any kind. Communicate early, communicate often on all things. It also means that you have to have really clear roles and responsibilities, and we’ll talk about that later in this presentation. We’ll talk about those meetings that you need to be having because regular meetings, and I mean formal meetings.

Not that we happen to talk two or three times a day because we’re business partners and we’re sharing client relationships and all of that. I’m talking actual partner meetings where you focus on ownership of the business issues. You need to have those on a regular basis in order to make sure that you’re having open and honest conversation.

The partnerships that go off the rails are typically the ones that have bottled up emotion, bottled up frustration with partners, and it doesn’t get shared in a timely fashion. You need to make sure that you address problems if it’s, if you think that a partner is not carrying their load effectively, for example.

You need to communicate that as soon as you start to feel that, because that’s when it’s easiest to address. If you go years and say, jeez, I don’t know. You know, Chip just really hasn’t been pulling his weight in this partnership. He’s, he hasn’t been, you know, servicing enough clients. He hasn’t been bringing in enough revenue.

I’m bringing in all the burden and yet we’re being paid the same. Those are all real problems that can erupt if you are not having that candid conversation as often as possible. And if you’re making these changes as necessary, it increases your odds for success. So communicate and make sure that you’re taking steps based on that communication.

All right, so let’s talk a little bit about this dual role that I’ve referenced here, where you are an owner and you are also an employee of the business. And because of that, you have to wear a couple of different hats. And when you’re wearing different hats, as frankly, I always need to because, you know, scalp burn is just a nasty thing.

Wear hats that help you to understand what you’re doing in any particular situation, meeting or conversation. And if you’re in a partner meeting, then you’re wearing your owner hat, your board member hat, if you will. Your role at that point is to help guide the business and steer it in a particular direction.

But throughout the course of the week you will be servicing clients, you will be generating revenue, you will be having management conversations about employees. All of that is typically more of an employee role. These two are not the same. Sometimes there will be conflicts. What’s best for you as an owner of the business may not be what’s best for, for example, the team that you’re running within the business.

You need to think about both of those things and balancing those out can be challenging. Particularly if it’s the first time that you’ve been in that kind of a role where you have a significant ownership interest and you are also an employee of the business. But I think it’s also important to think about, and we’ll talk about this a little bit more later as well, that you need to have distinct compensation for these two hats.

You need to be compensated from the profits of the business as an owner and you need to be compensated for your work as an employee for the work that you’re doing. Now this is true even if you own 100 percent of the business, and I talk about this in a lot of the presentations that I’ve done. So again, you can find those resources on the SAGA website.

But these two income streams are even more important when it comes to a partnership. Because often times what I see is that partners will all just pay themselves equally out of the profits of the business. That becomes a problem over time if for some reason one partner wants to pull back on their work a little bit.

Maybe they’ve got other business interests, maybe they’re headed towards retirement, maybe they’ve got family situations that are causing them to want to work less. If you are only having one revenue stream, it becomes a lot more complicated to have the conversations that need to be had in those cases about reducing the total compensation for one individual.

If instead you are being compensated out of the profits for your ownership interest, but also being paid a salary of some sort and work with your accountant to figure out the most tax effective way to do this. But from a business standpoint, some kind of a fixed compensation for the work that you’re doing in the business, it becomes a lot easier to reduce that compensation while keeping the profit compensation in place, because you still do own that piece of the business, even if you are pulling back.

on the work that is done. And frankly, a lot of the tension within an agency business, within a partnership, comes from the financial things. It’s no different in that regard than a lot of personal relationships. Financial items, disagreements tend to put a lot of stress on the relationship. If you have these different ways of addressing it, because you’ve got two income streams for each partner, it makes it not easy, but at least easier to address some of those problems.

And so understanding those two hats and treating those two hats differently in all fashions, both in terms of the work that you’re doing, as well as your compensation, will help substantially. So it would, I would be remiss if I didn’t talk about some of the risks of a partnership from a management structure that you need to be thinking about as a co owner of the business.

And so as a co owner, you need to think about how do you put checks and balances in place? Because if you’re not the 100 percent owner of the business, that means that there are decisions that are going to have to be done in concert with each other. And so your partnership agreement should address some of these, but there are also just generally logistical things that you will need to be looking at.

And top of this list, of course, is financial oversight. As a co owner of the business, you have responsibility to make sure that your books are being kept correctly, that your bank accounts are being treated properly. And so generally speaking, in most partnerships, there is one partner who takes the lead on these financial activities.

And that’s fine, that’s good, in fact, to have that centralized. But you need to make sure that the other partner or partners in the business have some level of oversight. And this can be simple things. For example, when I was the, the lead financial partner, in a couple of partnerships, I would always make sure that any check that was coming to me, whether that was a partner draw, a salary, even an expense reimbursement, that I never, ever signed those checks myself.

I always made sure that a partner, another partner signed those financial instruments because that meant that someone else was keeping an eye on it. And you want to have those kinds of things. You want to make sure that more than one partner is looking at bank statements. And this isn’t because you don’t trust your partners.

You of course should, but things happen. It’s the same as if you had a bookkeeper or an accountant and they had access to your checking account, you would want to keep an eye on that and just make sure that nothing was going on that you were not aware of. You absolutely have that responsibility as a co owner in the business to keep that kind of oversight over your fellow partners as well.

You need to be making sure, of course, that as a business you’re doing all of the legal and regulatory things that you need to do. Again, one partner may be taking the lead on it, but ultimately it’s the responsibility of everybody to make sure that you’ve filed the appropriate paperwork with whatever state governments you need to do, filed all the appropriate tax returns.

Keep an eye on these things. Make sure you understand what those responsibilities are. And I know most of you have not come from an environment where you did a lot of business management type things. These are the kinds of things in owning a small business as a co owner that you need to understand and learn from, and it will help you over time the more you understand these things.

Frankly, it will help you in the advice that you give to clients by being a business owner because it helps you to understand better their perspective and how they approach things. You also have to make sure that you are coming together wearing this owner hat as, and focused on the business direction and guidance of the business.

Where are we going? And that means that you can’t let one partner just go off in their own direction. You need to come together and have those checks and balances in place for strategic decisions, not just for the financial and regulatory ones. And of course, when it comes to equity transactions, there are a lot of checks and balances that need to be in place.

Again, that buy sell agreement that I referenced at the start of this conversation is critical to making sure that you are, you have a handle on those kinds of things so that nothing comes up that is surprising and unhandleable because you didn’t think about it in advance. Alright, so now let’s talk about the actual roles and responsibilities that you have, as an owner of the business, as an employee of the business.

And so, if we think about this in terms of knowing which partner owns which piece of the business. We talked about someone usually taking the lead on financial management. But usually there is a partner who tends to, to lead more on business development in most partnerships. Others may lead more. on the substance, whether that’s communications, marketing, advertising, the science, the substance rather of client service and the things that you’re doing there.

So understanding what your strengths are, leveraging the individual strengths and making sure that you have somebody who is first and foremost responsible for individual areas of the business. And I always say that if more than one person is in charge of something, nobody is in charge. That is nowhere more true, perhaps, than in the partnership, ownership of an agency.

You need to make sure that one person has primary responsibility for all of the core functions. Because that leads to accountability. If both of you, or all three of you, or four of you, however many there are, are responsible for business development and nobody has the lead on it, Apart from just making things confusing, it also makes it so that everybody can just assume that someone else will shoulder the burden.

Someone else will come through even if I am not able to. As soon as you put one person in charge and you say it is your responsibility to make sure that business development is moving forward, or to make sure that client service is being executed correctly, or that we’re living by our HR standards, or whatever it may be.

If you’ve got one person who has that as primary responsibility, it allows that person to feel empowered to say, look, I need help on this. And it improves the likelihood that you’re going to have good results. And none of this means that if you have someone with primary responsibility, they can’t have all of the rest of you contributing as well.

You should all absolutely be helping out wherever you can, and wherever you’re needed, and wherever you can provide value. But you still need to have that point person for every major function within the business. So make sure that you have everybody understanding, What it is that they’re doing. You should put this on paper, whether that’s in job descriptions or just notes or something.

Make sure that it’s well documented so everybody knows who has it. And then over the course of the meetings and conversations that you have as a partnership, you can really strive for that mutual accountability that comes from everybody reporting on the progress that they’ve made, the obstacles that they may have, the help that they may need in order to achieve the goals that have been set.

So, I’ve referenced meetings quite a bit here. Let’s talk for a minute about the meeting structure that I recommend. And the way I generally recommend that partnerships work, and obviously each one may be a little bit different and things may need to be customized for you, but in general, I think the best structure is to have a weekly check in as your starting point.

And this doesn’t need to be a long meeting. In fact, it shouldn’t be, in most cases, a long meeting. Typically in the partnerships that I’ve been in, this has been a 30 minute weekly call, Zoom, in person, if you’re all in the same office. Whatever the structure might be that makes sense physically for you But those weekly check ins allow you to make sure that you’re just doing all the basic blocking and tackling and that you’re able to communicate Any challenges or opportunities from a business perspective as soon as possible And you’re able to get out ahead of things as opposed to allowing the the narrative to drive you Because you waited so long to touch base. And this is true You need to have these meetings as I referenced before Even if you are talking two or three or four or five times a day, because these are conversations that you have that are separate and apart from all of that daily grind.

And we’ll talk about the substance of those meetings in just a little bit. In addition to these weekly meetings, I recommend a either monthly or quarterly, typically quarterly planning session, where you spend a little bit more time together, maybe a half day or so, and you’re really having these in depth conversations, looking ahead to where the business is going, looking at meatier challenges and opportunities that you can’t address in a 10 minute conversation on a weekly check in.

And then finally, I recommend an annual retreat for all of the partners in the business. And this should be something where you, you really are disconnecting from the day to day, and it gives you a chance to take a big picture look at where things are headed, where you want to be going personally, where you want the business to be serving you in the future.

So let’s talk about some of these in particular. So this weekly meeting, again, I said Zoom or in person. I prefer to have it in a visual format where you can see each other so that you can see facial expressions and really interact. But in any case, it doesn’t need to be physically in person, but in some fashion you need to be getting together on a weekly basis.

You need to be sharing updates in advance so this is a conversation and it’s not, Each partner just, you know, whether it’s two or three or four of you, each of you reporting on different things. It’s really an opportunity for you to have conversation. So just as I recommend for most meetings, have updates shared in advance that you can.

Share an agenda in advance so you all know what you’re going to be talking about and have a chance to think about it. And you should have ideally one partner who is leading these conversations. It doesn’t have to be, it can be a first among equals from just a management perspective. It can be the best facilitator in your group.

Doesn’t really matter. You need to have somebody though who’s driving the conversation and making sure that it everything on the agenda is touched upon. It may or may not be something that you would combine with a general management meeting for the agency. If you’ve got three partners and one other senior executive in the business, then you may well just do this as a single weekly meeting, and it may be appropriate because that senior employee may be in the loop on, say, 90 percent of the issues that you’re considering as a partnership.

You may still need to do periodic meetings where you exclude non partners because you may have more sensitive things from a an ownership perspective that need to be discussed. But oftentimes if you’re, if you’re a small team and you only have one or two other senior employees who are not partners, it may make sense to combine them because there may be enough overlap in these weekly conversations for that to occur.

You really do, as I said, though, want to focus on having conversations about the future, having those in depth conversations about where you’re going and the obstacles that you have, because that’s the value that you get out of having these meetings. It’s not about sitting there and just sharing the updates and rehashing what went on in the past.

I would also encourage you, keep it to business topics. Client updates should only be relevant if they are material to revenue. In other words, we’ve got a real issue with a client who might go away because of X, Y, or Z. Whether it’s something going on in their business, or in the relationship with the agency, or whatever.

But it shouldn’t be something where you’d spend, much if any time at all talking about, you know, What’s the next thing with this client? What’s the strategy we should have for this or that? That, those should be separate conversations, conversations that you’re having about client strategy and other client issues.

And then finally, at the end of each meeting, make sure that you’re tracking what action items have come out of it and make sure that you follow up in the next weekly meeting to make sure that any accountability that needs to take place, reporting on whether you made the progress that you said you were going to make in that intervening time period is occurring, because there’s one of the real benefits of a partnership is that mutual accountability that you have with and to each other that you don’t have when you’re a 100 percent owner.

And as, as a 100 percent owner, you don’t have. frankly, much in the way of consequences, if you are late doing something, unless it’s something obviously that has external impact. So take advantage of that in the partnership and have that level of accountability taking place.

The quarterly meetings.

These I do recommend that you have in person. And they don’t need to be particularly long. I think generally speaking, a half day or so is about the right length for these. You should be out of the office if possible, but you don’t need to have a fancy location. And if you happen to have a conference room in your office, if you are not a virtual agency, that can still be a perfectly productive location for this kind of a conversation.

But this is. This is not the weekly meeting as far as, you know, dealing with more of the blocking and tackling of the business. This is really something where you should be pulling out just a couple of topics each quarter and focus on them. They might be major challenges. They might be major opportunities, but these are the kinds of things where you’re trying to get that collective brain power together to really think about it for a longer period of time than you have available to you over the course of the normal work week.

And if you use it for those purposes and you think about those big picture things, then you’ll be in a much stronger position. You should also be doing basic things like reviewing your quarterly financials. I wouldn’t encourage spending a lot of time on your quarterly financials, but they should be shared in advance.

And, all of the partners should be free to ask any questions that they have about them. And whoever your financial lead partner is should be able to, answer them or take those questions and work with your accountant or other professionals to get the answers that are needed. But do make sure that you’re spending some time looking at them so that everybody is on the same page about where the progress has been.

And in addition to looking at the backwards quarterly, if you will, you also want to be looking at the forecast for the next couple of quarters at each one of these. Again, not a huge portion of the meeting, but it should be a percentage of the time to make sure that you are all on the same page. And again, going back to my

keys to success earlier, no surprises of any kind. You do want to make sure that all the topics that you’re putting on the list, including the financials, they’re really focused conversations. You have really clear objectives for them. So, you know, with the financials, it may be understanding what’s going on there, but The financial lead may also say, these are, you know, particular things that you need to be aware of.

We’re building up a large cash reserve, we need to figure out what to do with it. We foresee a cash crunch next quarter because of X, Y, or Z. We need to plan for that. But make sure that you have clear questions, clear desired decisions as outcomes that you’re looking for so that you’re not just having a rambling conversation because we’re all creative people.

We have lots of ideas. If you’re an entrepreneur, if you’re a communicator. These are things you probably could, you know, we could spend a lot of time talking about A. I. And what does that mean for the agency and all that? But what specifically are we looking to do? Are we looking to craft an A. I. Policy for the business?

Are we looking at making some investments in trying some A. I. Technologies or creating something? You know, we want to make sure that we’re not just having a generic conversation about A. I. But rather a specific one to address a particular challenge or opportunity that we see. And ideally you want to mix it up so that different partners are leading different parts of the conversation.

Keep everybody involved. Make sure that everybody is having an opportunity to bring things to the table that are in their particular areas of responsibility within the business.

Finally, the third leg of the stool when it comes to meetings in a partnership, annual retreat. I’m a big believer that you ought to take time to get together in person at some out of town location.

So not where you typically do business, not where you have your headquarters, you know, find some other location to go to. If it’s, if you do it in the wintertime, go somewhere warm or go somewhere cold if you all like to ski. But whatever it is, make sure that you’re, you’re breaking your patterns for this kind of an annual conversation.

And it’s, it really serves two purposes within the business. One is just the same as with the quarterlies. It’s an opportunity for a more in depth conversation to take place. But it’s also a time for more informal interaction, because if you do it over the course of two days, there should be a lot of unscheduled, lightly scheduled time.

Something that gives you an opportunity to all interact with each other, whether that’s two, three, four, five, whatever. All of you need to have that opportunity to interact. I really strongly recommend that on day one, you have a dinner where you’re able to just all kind of relax, have conversation, and, and as I say, rekindle the business romance.

You need to make sure that you’re still feeling strong about where this business is headed. And a lot of times, the more informal that you can make your conversation, the easier it is to do that. And frankly, Oftentimes it will bring in topics that you may want to discuss on day two when you’re having those more relaxed conversations.

Because if you feel free to open up to your business partners in those sessions, it may give you something to talk about that might not have been on the initial agenda. And that can oftentimes be very productive, because you want to make sure that you’re opening those lines of communication as much as possible.

In general, with these annual retreats, I do like to have a longer time horizon for my thinking. In the quarterlies, you might be just looking ahead the next couple of quarters. In an annual retreat, you want to look ahead a year, two, three, maybe more, as you start thinking about the overall directionality of the ship and where you want to take the agency in the future You should also be taking advantage of this time to share with your partners any adjustments to your own personal priorities. You’re thinking about retirement in three to five years. You’ve got a kid headed off to college in a couple of years, and so that’s putting a pressure on you to think about, you know, how you’re generating income to support that.

Whatever those things may be, share some of those at this, because it’s an opportunity for you to talk about what’s working and what isn’t, both within the business, as well as in terms of how the business is serving you as an owner. As I always say, it is not worth taking on all the stress and risk of owning your own business, whether that’s 100%, as a solo or in terms of a partnership if it’s, if the business is not producing what you want, what you need from it.

So yes, you need to be a little bit selfish, in terms of what the business is providing and you need to share with your partners where it’s working and where it isn’t. Is it giving you the flexibility that you need from a time perspective to balance your things outside of work. Is it generating the kind of income that you want or need in order to be successful in the other things that you’re doing. All of these things should be on the table in that annual retreat so that everybody Is on the same page because it’s your chance to either solve these things or figure out maybe there’s a conflict and we need to go somewhere else, which of course is a nice segue into the next piece of the conversation, which is conflict resolution.

There is no such thing as a partnership of any kind, business or personal, that has no conflict ever. If you manage to have a partnership somehow, that miraculously doesn’t, there’s not a disagreement about anything. Whether that’s strategic for a client or big picture business or something even bigger than that.

I would be shocked. It just, it doesn’t happen. So, you have to think about how do you resolve these conflicts? How do you address them when they inevitably do arise? So, Obviously, we’ve talked about communications. It means you need to have candid conversations. But those candid conversations should take place because you’ve planned for that conflict in advance in some of those documents that we talked about earlier in the role or job descriptions that we talked about.

So, plan for these things and how you structure it. But I think the biggest piece of advice that I would offer here is make sure that if there is conflict brewing, you should not suffer in silence. And you should not, or you should encourage your partners to have the same mindset. All too often when I see agencies truly fall apart, it’s because one person in the partnership had, had pent up frustration that they didn’t bring to the table and they didn’t try to find a solution early on.

And we talked earlier about how if, if you can spot these problems and you can address these problems, it’s often a lot easier. But another piece of, of conflict resolution is understanding that sometimes a bad decision is better than no decision. So at some point you need to end the debate and just Take a stance, take a position as a business.

It may be that not all of the partners in the business agree with that, with every element of that direction. And if it’s, if it’s so fundamental that they can’t continue in the partnership, fine. Let’s address that. Let’s solve for that. Let’s figure out how we can extract them from the business if that’s really the direction it has to go.

But stalemates are the enemy of success. And so you need to make sure that you are structuring your conversations and your meetings and your business process as partners so that you get to decisions in a timely fashion. Certainly don’t rush them. Certainly don’t, you know, give up the opportunity to take time to think about something, walk away from a tough conversation and say, let’s revisit it tomorrow morning.

All of those are fine things, but you need to make sure that you are driving towards a decision, driving towards a solution. Because otherwise. Things fester and the more they fester, the harder it is to resolve the conflict. You also need to try to think about how to compartmentalize as effectively as possible your ownership role from your employee role.

And because you do have those two hats and they sometimes conflict, sometimes you need to step back and say, What’s best for the business when I’m wearing my owner’s hat? And again, that may not be what’s best for you and the specific team that you’re running with the business. as we talked about earlier, a separate compensation helps with this conflict resolution, because it gives you an additional tool to add to the mix.

And if you’ve got that kind of a tool, you can often resolve the challenges much more quickly, and a lot of the pressure within agencies can come when one partner is perceived to not be pulling their own weight. I’ve seen that in a lot of partnerships, and it can be a real drag on the overall business, not just the individual relationships of the partners.

And then finally, when you do have conflict, or perhaps even without that, it can be helpful to introduce an outside facilitator or advisor into the mix. And when I had partnerships, we often would have someone who would sit in as an outsider, as a consultant, as a facilitator, who would participate in particularly quarterly or annual.

partner meetings in order to help ask questions perhaps that may be going, unasked, to, to be a devil’s advocate on things, to press us on our assumptions and, and making sure that, that we truly were, believed in and were committed to the direction that we were going, and so oftentimes having someone else in the mix who is, able to effectively play that role can be valuable, Again, particularly in conflict situations, but typically it works better when you have someone who’s already been involved before the conflict arises, because they can tend to add additional value there.

So, consider that as a piece of it. And that could be someone that is just, you know, known to all of you, and, you know, Frankly, I’ve in the past used people who are not specifically from the agency community itself. They can still provide a valuable role if they’ve got general business knowledge and are able to, to poke and prod and, you know, just be effectively a neutral party in the conversation.

So, the last piece that I want to talk about here before we move to Q& A is this concept of renewing your vows and it really plays into that annual retreat. This should be really your opportunity to reflect going into the annual retreat. all of the things that in your mind are working and not and thinking about your annual retreat as essentially a partnership health checkup.

And so this is where we want to start thinking about what makes a difference to me in the business. What are the things that I would like to fix? How can I solve some of these problems earlier? And really making sure that inertia is not what’s driving your decision making. I’ve talked a lot about how so many small agencies are driven purely by inertia.

This is how we’ve always done things. This is how so, so and so said on a YouTube video that we ought to do it or a webinar. All of the advice that I give is just that, it’s advice. You need to make your own decisions. You should not be moving forward in a particular direction simply because it’s what you’ve always done or what, what some expert said. You need to internalize that information and understand how it affects things and really make proactive decisions, particularly during these annual retreats to say what is right for the business, what is right for me. And by recommitting to your agency on this annual basis, it allows you to feel better about what you’re doing because there are there always compromises. There are as much as a partnership can be beneficial. There are downsides. There are drawbacks. And so you want to make sure that that you are thinking these things through proactively and constructively reaching the conclusion that it is still the right way to run this particular business.

And so recommitting, renewing your vows, Fixing what you can fix, and if you absolutely can’t, if you’ve tried everything, and you should absolutely try everything, you shouldn’t, you shouldn’t just walk away from a business partnership easily, you should sit there and, and have open conversations with your partners about addressing whatever flaws you see, addressing whatever priorities need to be changed to help you get what you want and need from the business.

Try to fix it. But if you can’t, if you absolutely can’t fix it, then that’s the opportunity for you to go to your partner or partners and say, Look, this just isn’t working. We’ve tried everything that we can think of. Ultimately, I need to get out. Let’s figure out how to do it. And again, the paperwork we talked about early on helps give you a framework, but you, it’s just a framework and you can often negotiate different approaches that make sense in individual cases.

Perhaps you spin off and become a consultant to the agency that you are a part owner of, draw down your ownership structure over time. There’s all sorts of things that you can do to address these if it just isn’t working for everyone in the partnership going forward. But of course, all of these things are reasons why you don’t never want to rush into a partnership and some of the webinars that I’ve done in the past address how to think about when is the right time to go into a partnership structure for the ownership of your agency.

So, that will bring us to the wrapping up portion of the webinar. Essentially, you need to be thinking about how to manage effectively from the get go. Make sure that you have the structure in place, all of the paperwork in place. Think about your dual roles as, an owner of the business as well as an employee of the business.

Make sure that you’re compensating based on those two different approaches because that gives you those tools that you need to resolve conflict, have a regular cadence of meetings. It’s actually focused on the business issues that arise and not simply to deal with the regular day to day routine things that you may be talking with your partners about, every day of the week, on Slack, on zoom, wherever.

And so, make sure that you’re. putting those structures in place and then make sure that on an annual basis, you’re looking at those big picture things, making sure that the partnership is still working for all of the owners in the business and that you are set up for success in the future. So, with that, that will take us onto the Q& A portion of this webinar.

If you’re watching on replay, this will conclude the formal presentation and the replay itself. If you do have questions that you would like to ask based on having watched this on replay, feel free to email me, chip@smallagencygrowth.com. If you are watching live and would like to ask a question that you would prefer not to share publicly, feel free to use that same email address.

All of you can also jump into the community on Slack and ask questions of other peers in the SAGA community who may have their own perspectives. And so with that, thank you all for watching. And if you’re here live, I’ll start the Q& A in just one moment.

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