The Art of Succession

I'd happily split profits knowing that

he has to kill something in order to eat

instead of him banking on the fact that

he's eating every two weeks it it it

would be really hard for me to be okay

with that structure I have been so quick

to jump in Partnerships off of

excitement and knowing my ability to

integrate um wanting to partner with

other Visionaries and build their

dream

and they just don't have the grip that

it takes to to build it what

responsibility does a partner have to

pay attention to the other aspects of

the business what indicators should you

look for as an early warning that

something isn't working and how do you

consider the benefits and the costs of

bringing in a partner versus hiring a

highly compensated employee my name is

Barrett young and this is the artist

succession podcast my guest today is

jerem Rogers a partner in Legacy hearing

professionals today we're going to hear

a story about removing a partner that at

best wasn't pulling their weight and at

worst was defrauding the company and the

steps that jeram and his partner took to

recover jerem welcome to the artist

succession hey Barrett thanks for having

me yeah my pleasure so uh give me a

little bit of background about your

partner and uh you know just leading up

to uh the acquisition of the company

that that you later came into uh so a a

good friend of ours owned and operated a

hearing need company and he had a

partner at that time who

um uh wasn't helping the business grow

for lack of uh a better term and they

were about a couple days away from

having the landlord lock them out of

their building and so they weren't

paying rent his partner was in charge of

paying the rent paying the suppliers and

he wasn't making payments to those uh

suppliers or the landlord and so they

almost lost it all he made uh a phone

call and uh we

basically bought out his partner paid

off the debt to the landlord and are now

a silent partner in that uh hearing aid

company did your friends start this

company with this partner how did how

did that come yeah yeah so actually the

one who was no longer a partner was the

one who started it and my my friend is

the one he was taught by the guy who's

no longer part of it so he learned a lot

from him and then he got caught up in

things that kind of took him away from

helping drive and build the business and

uh my friend

basically has learned everything from

the guy who's no longer no longer there

and has built a successful business off

of off of what he's learned from him how

long as an employee had your friend been

working with his mentor been been

learning this before I think I think

like 15 years okay and eventually the

conversation turned to partnership and

he was brought in as 50/50 partner or

what was that structure their structure

was a 50-50

partnership and then when when we bought

out his partner it then

switched um he he remained 50 5050 and

we're

5050 I assume there were no indications

of wrongdoing or of any kind of

impropriety on your uh in your friend's

mind when he came into this partnership

how long after he got in behind the

scenes um I mean do you want to talk

about specifics or do you want to leave

it at generalities how long after he got

in behind the scenes did he start to

know something wasn't right there well I

think he knew for a while something

wasn't right but when they were getting

evicted from their their space is when

he realized that hey we've we'

something's got to get we we have to fix

this um and so that's that's when we

came in

and because they had no option they

didn't have the money they they did not

have the the financial backing to to buy

out the landlord and to pay off their

suppliers they would have lost it

all okay so he had suspicions things

weren't healthy within the company but

probably voed these to the partner and

the partner blew them off and said no no

no it's fine don't worry about that I

got it taken care of and then to the

point of eviction I mean this is

probably like back payments going back a

couple years um to vendors and things

like that is that is that about right

yeah there was there was a pretty hefty

Bill to to the landlord that was owed

and then a pretty hefty Bill to our

supplier our hearing aid supplier that

was

owed uh ballpark amount how much are we

talking

200,000

okay um any employees in the business or

is it just him and his former Mentor NOP

nope it was just it was sorry it was it

was him as former Mentor then one

salesman okay gotcha brick and brick and

mortar store selling herin AES doing

fittings things like that c custom made

yep okay yep so did your friend I mean

talking to you and bringing you into

this did your friend talk about warning

signs like if if I were to advise

somebody who's listening to this and

they're like wow my partner just keeps

on brushing me off too and saying don't

worry about it I got it all taken care

of what would you advise somebody to

look for so that it doesn't get to that

last minute I had this happen to a

almost this exact case happen to a large

client of mine and they actually didn't

know something was wrong until the IRS

caught up with them for back payroll

taxes to to the tune of almost a million

dollars oh gosh and he actually had to

fire his mentor uh from that company

similar situation but yeah just last

minute uh you know before you know don't

find out until it's too late kind of

thing what what would your advice be to

your friend of some warning signs that

he told you I I completely just ignored

this well I would I would say you have

to look at the books you you have to see

every penny going in every penny going

out

um that's the only way you're going to

know and you have to you have to have a

third party accountant that that you

both trust and that's that's what I

would recommend because he wasn't he

didn't see what was coming in and what

was going out and you know he was he was

he was an operator so he sold he he

didn't deal with the back end office

stuff um but if you're a partner and if

I was giving an advice to a partner I

don't care what your role is if you're

boots on the ground if you're backend

office it doesn't matter you you've got

to have a meeting of the minds once a

week and review your metrics that you're

tracking your financial metrics you have

to know them if you're a partner you

have to know him I don't care what

you're ruing the buiness

serves yeah yeah I I agree I mean you're

being it's your name being signed on the

hook for all these things you have a you

have a right to understand what's going

on there so but I think that happens so

frequently you have one partner who's

the financial Savvy

supposedly one and then one who's the

technician or the out in the field one

um and one doesn't want to do that job

and the other one doesn't want to do the

other job and so but yeah you're right

just like and that's that's okay you

don't you don't have to do you can

specialize in your lane whatever that is

but there's some things that you just

have to you have to share knowledge and

of the p&l you have to share that

knowledge if you're

Partners

okay all right so he's about to be

evicted and you get a call or a text I

don't what did you say that one yep yep

get a call and uh he's like hey I need

some

help and so he kind of laid out the

situation of what was going on and uh we

helped him and became a financial

partner okay in in this business uh when

you say we helped him uh you and the

company you work for or you personally

so

me the operator of the hearing in

company owns 50% and then me and my

partner own the other

50% um and so actually what happened is

so my partner and the operator have

known each other for a really long time

and that's actually how we got the phone

call

and that's how we connected and we were

able to make we were able to make it

work okay and what's your background my

my background is I am an

integrator

so you know I with my partner little bit

of Rocket Fuel there exactly um you know

my partner is a Visionary and I'm

absolutely integrator and so he'll share

his ideas I'll kind of bring him down to

the ground and and create a system and

it's worked really really well for the

past seven years for us okay in what in

what field what industry multiple I mean

we own a a uh Construction Company um we

own a home flipping company and we also

run a real estate team here in Arizona

gotcha so reality adjacent businesses

real estate and Construction

Construction I mean it's varies

everywhere from we flip which is a

separate business and then we do new

builds and remodels which is a totally

separate business different

subcontractors different

employees from our flip business all

right so you you're your partner gets a

call from the

operator and says I need help how you

know what's that decision look like walk

me through the next week uh or or I

guess how quickly this moved I was

hesitant I'm like we're not we're not

doing that we we don't know anything

about this guy's business we don't know

what other problems he's involved in we

don't know what we're putting because we

put our name on the LLC we didn't know

what we were signing up for and you know

the Visionary being the Visionary was

like we got to do this I just know we

got to do it it's going to and in my

mind I'm like how is this going to work

there's so much we got to figure out to

make sure that we're protected we're

safe that we can actually help build his

business and um anyways you know he won

and we decided to pull the trigger and

one of the best decisions we've ever

made uh approximately how long did that

take uh it didn't take long um so I have

a a background in commercial real estate

and so I was able to call the

landlord and um figure out like a grace

period because they had already issued

the 5D notice the doors were getting

locked in like 24 hours and so we were

able to negotiate an extension of that

five-day period for us to give them some

some money and with with an agreement to

pay more every month for x amount of

time for x amount of months okay and um

now that that debt has been paid in full

and business is operating and things are

great um but it didn't take long to

execute the

agreement uh with with the operator you

know the the business partner that we

bought out he was happy to get bought

out you know I think I think he wanted

the

money I think he just wanted the cash to

quit cash and I think he wanted to wash

his hands um I think he realized that he

had dug a big hole for us to get out of

and if we were going to give him money

to go and jump in the hole he dog and I

think he was he was ecstatic about

that okay um I didn't ask approximately

how many years ago did this all take

place two and a half years ago oh no no

probably more

like three years ago yeah it's probably

been three

years uh how how did you come up with a

value for this partner that was just

happy to get anything you know what we

took um annual revenue we looked at net

profit

um and we lowall him uh because we knew

he was desperate to get out and we knew

that he was desperate for cash and so we

we didn't pay him nearly what we felt

the business was worth and he took he

took it so some multiple of net profits

but then you back out the $200,000 owed

to get to that amount

roughly yeah okay and did you guys take

out a loan to be able to pay that off

right away did you have to go on

installment for that too NOP we paid we

paid him in full right away we we paid

him we wanted him out we got him off the

LLC added our names on the LLC and that

way he was no longer part of any

operations at all yeah I mean that's a

that's kind of best case scenario there

he didn't dig his heels and you know I

was expecting a kind of how to force out

a partner would be the discussion here

but this guy saw the cash saw the

trouble realized cash is better than

what we don't have working here cash is

better than get getting evicted tomorrow

yeah and he knew it he knew that if he

got evicted that's gonna hit his credit

and he he would he'd be in

a he'd be in trouble and so this this

and he only had so much time uh to make

that decision either yes or no and I

think that time crunch just forced him

to sign and and take the money uh after

you and your partner are in the business

now what else did you uncover I mean was

it worse than even the operator uh

thought it was

um with that initial call no it it

wasn't it wasn't worse than what we

originally thought it was there was debt

that was

owed and we had worked out agreements

with our suppliers and with our landlord

like I mentioned earlier and we had we

were able to pay them off over the

course of the year

um by just paying them a little bit more

every single month to pay down our debt

okay but tax returns had been getting

filed payroll that kind of stuff was was

being done yep all that was being done

fortunately okay that's great

um how did your I I guess what was your

operator perspective on this uh on now

having two

partners obviously gratitude but Y what

else he I mean he was used to getting

50% so by bringing by bringing us in and

taking the other 50% I don't that didn't

bother him he does

98% of all the

rifting um which is how it was before we

even came in oh it was okay yeah this

guy was almost retired anyways he was

just pulling money out of the company

not doing anything yeah um but no I he

he wouldn't have a job right now he

wouldn't be working doing what he's

doing now if we didn't come in and and

bail them

out uh why

the why did you guys become 50% partner

instead of just do a loan to this guy to

be able to buy out his former partner

partner become 100% owner was there a

reason behind that yep we have

partnered

so managing 1099

subcontractors um real estate agents we

have given loans to them they're

business owners of their own business

right we have given loans to them

and given them everything coaching

training teaching the system how to be

successful as a

realtor

and it never panned out it it just never

we never made our money

back um from from them from our

experience and so when this

opportunity came

available

uh is it was the only way that we felt

comfortable doing it um we we had lost

way too much money in other Ventures

that unless we're willing unless you're

willing to to split profits with us

we're just it's it's not worth it's not

worth it for us we we own and operate

other businesses and so if we have to be

day-to-day

operations just for a

loan the the risk just isn't it's too

much

risk especially with the history of what

was going on with the business

so if we if we were going to do it we

were going to do it

together okay so you said he does 98% of

everything but that 2% that you guys are

doing he know he knew that he was

securing your interest in the company

you guys are involved in the success of

that company more than just you know pay

P the the monthly principle and interest

yeah revenues and profits have have

increased since we've

partnered um he's been able to focus

more on operations and not so much focus

on backend or marketing or taxes or

accounting or any of that stuff so we've

freed him up to where he can just sell

hearing aids and because of that the

business has been much more successful I

gotta so your 50% ownership or 25 and 25

came with a back office I mean you guys

are you using your same company

resources for your construction company

in order to take care of this kind of

stuff too yep okay y gotcha um and the

business is still him and one other

salesperson or has it grown from there

him and one of and one of our salesp

person we've we've had the opportunity

to buy other hearing aid shops around

the state um but we've just been a

little hesitant on we've made the

mistake sick of expanding too fast okay

explain that yeah so when we expand our

real estate company expanded to

California oh San Diego you and your

partner previously had made this mistake

we we have made this mistake previously

of expanding too quickly and in order

for a location whether it's real estate

hearing aids construction doesn't matter

you have to have the right operator in

place and we're just not at a point to

where we can spread our operator here in

Phoenix too thin to run multiple

branches in Arizona so we'd have to find

an additional

operator and a part oh let's not a

partner an additional partner in finding

Partners is tough the right Partners is

tough we've made the mistake too too

many times of partnering with the wrong

people and it's not it's exciting to and

it's exciting to go and open new markets

but it's not exciting when you realize

that you're losing money and you're to

you're locked into a five-year lease and

other

obligations um it's just not it's not

fine yeah I know we've had I've had this

come up in previous episodes like the

difference between bringing in a partner

versus bringing in a highly compensated

employee I me I mean you and your

partner didn't want to do that with this

business was there ever any consider

ation if you guys would just buy out

both like 100% of the company and that

operator would continue on as an

employee or do they they still wanted to

be an owner I mean the operator would TR

would would be open to that probably but

it's just hard for me because he has to

have skin in the game and I don't want

him just to be comfortable knowing that

he's going to get a paycheck every two

weeks

and I I wouldn't feel comfortable doing

something like that I I would rather I'd

happily split profits knowing that he

has to kill something in order to eat

instead of him banking on the fact that

he's eating every two

weeks um so it it would be really hard

for me to be okay with that structure I

gota so if you were to expand by other

uh hearing aid facilities you'd probably

want a 50 2525 structure similar to to

what you have here I I would I prefer

that even though we would make less

money I would prefer that because the

risk is a little bit less on us um yeah

talk to me about the growth um you know

when a when a business is unhealthy it

manifests itself in lots of different

ways and when that is removed it

unleashes just a lot of a lot of stuff

so talk to me about the growth uh just

in terms of multiples or numbers or

anything you're comfortable with yeah so

the growth I'd say the biggest

contributor of the growth was being able

to narrow Focus okay when

you're juggling so many balls you're

going to drop

them explain explain that part what what

was being juggled so if you're if you're

juggling operations

marketing suppliers shipping

recruiting um Big Ideas I mean whatever

it is the overall process of the

business if if you're a oneman shop you

you can only do so

much and so if you're able to leverage

yourself and sub out things that are

lower dollar per

hour

activities than selling hearing aids you

can actually generate a whole heck of a

lot more money when you focus on just

selling hearing aids and so we we came

in and we were able to take off a lot of

the operations piece as far as marketing

accounting backend to where he could

focus on sales um and then he didn't

have any marketing in place really we we

came in and started doing

ads um Google mailers Consulting with

other big hearing a companies that were

seeing success in online marketing and

so we took all of that over so that he

could focus on selling just selling and

that is that alone I'll I'll attribute

that to the majority of the growth he's

doing 98% of the work the other partner

is just taking money out of the company

just bleeding it dry but at that time

he's also the only one responsible for

all these things if it had to get done

and he was the one that was doing it uh

except for the financial piece that he

was being told was all taken care of

don't worry about it yeah I say 98% it's

probably it's not like an actual 98% but

he does do the majority of all the work

but you guys come in with no background

in specific to that industry but you're

able to use your understanding of

marketing and accounting and and all of

the operations of a company and quickly

move in and redirect those kind of

efforts uh to the growth of the company

okay yep yep okay great how long how

long after the partner was gone did I

mean did profitability was it

immediately there it was it was

immediate okay I mean it was it was

literally within 30 days it was it was

that quick and you're able to pay off

the the landlord and the vendor and

everything from the profit of the

business and so you got guys you and

your partner just put money in but it

was basically just sitting there and

then get paid out eventually cor correct

so we were to pay off all of our debts

and ourselves back within 18 months of

purchasing the property or the sorry the

business all right wow he was really

bleeding bleeding the money out then

yeah um okay somebody who is hearing

this and they are drowning and they're

solar preneur they're you know operating

by themselves

what would be your advice to somebody

who why would I bring in a silent

partner who can do this stuff versus

allocate Capital uh allocate profit from

the business and pay somebody to

Outsource all this stuff what would be

your advice to them whether they should

find somebody that's going to be a third

partner 20% partner like have skin in

the game like you guys are versus not

because I know you've been on both sides

of it too cuz you're not allocating that

stuff you have employees within your

Construction Company rather than you

know bringing a marketing partner for

10% over there yeah I you know I'd first

encourage them to find

out to to learn about who they are and

how they operate because if you're if

I'll go back to Rocket Fuel if you're an

integrator and you're trying to be a

Visionary it's just not going to work

and if you're a Visionary trying to be

an

integrator It's just tough so miserable

it's It's just tough and you're you're

going to clash and um it's not cohesive

it's bumpy it's not smooth and so first

of all figure out who you are and how

you operate what your personality is

that'd be my first suggestion and then

whatever you are if you are an

integrator go out and find somebody

who's a Visionary and that you mesh well

with I am a huge believer in partner

now Cody Sanchez if you know who that is

um he went to ASU so I'm a die hard Cody

Sanchez fan because I'm a Devils fan but

you know she doesn't she sees it

differently she likes to keep the whole

thing and then just paay

employees and that works for her you

know she's a billionaire she has she's

obviously extremely

successful uh

but good employees are so hard to find

and I've had better luck finding good

Partners than good employees and so just

from my personal experience and my I'm

super risk adverse I would rather share

in the

liability with someone who we can ying

and yang with each other instead of

bringing in an employee to do something

that I don't I'm not I'm not really good

at um that would be my

advice from my experience that's similar

to my own I was anti- partner for so

long long I started my own company but

I'm I'm a Visionary and I found myself

happening to be an integrator and

getting burned out and I ended up seven

years ago partnering here with a friend

she's an integrator and she was getting

burned out from having to play the

Visionary um yeah be the only person

trying to innovate within the partners

here at the firm um and so we just we

found a great fit there um

but too many people think oh well doing

this

well so use CPA as example I'm a CPA

that's got a successful firm and if I

partner with this CPA we could have

twice as big of a successful firm but

the the roles that and the skills are

the exact same so it's like an

integrator partnering with an integrator

and then wondering why things aren't

growing so yeah so know yourself and

then you're saying be very specific in

what you're looking for in a partner

don't just go to the first person that

has money and say I'll solve all your

problems for you y and make sure you

have like a resume on that partner if

they have not done this before don't do

it don't do it if they do not have some

sort of experience in owning or

operating a business as a Visionary or

an integrator or I'd have them take the

test if it were me like take the rocket

fuel test who are you um you say you're

a Visionary but are you actually a

Visionary and

make sure that they have some some

experience I I would never partner with

a green partner ever

again if if you're green I can't do it

it's not worth the risk for me because

I'm going to give you everything of me

I'm giving you my all I'm not holding

anything back and the last thing that I

want is to have to train somebody how to

be a Visionary or an integrator you you

you should have some experience and if

you if I'm bringing you as a partner you

have to have some sort of experience and

know what you're

doing uh your operator that's working in

the company now what are what are what

are they are they it sounds like they're

an integrator they're an integrator

they're you know head down and just chop

wood yep so that probably works for the

two of you because you and your partner

are silent Partners within that business

like you're integr integrating these

pieces over here but he's integrating

the sales and the get the getting the

product out the door

correct how what is it like to be an

integrator working with another

integrator um I mean how do you it for

you in this case those roles are clearly

defined but as this operator I would

think wants to move up into more

ownership of the company wants to move

into the back office possibly and take

over 100% of the company

someday I guess how do you how do you

define which roles are

under under whose provins so if if that

was the case it it wouldn't work we'd

have to figure out a

restructure

um because you guys are doing so much

that's not not built into the profit of

that company

more yeah like for example the operator

talks more directly with with the

integrator my partner

um if if I'm in it's because I'm looking

at numbers metrics hey we're not hitting

our for metrics what's going on where

where are we dropping the ball you know

we we incentivize the Gap somewhere

where's the Gap um and

so he

he The Operators he's talking to your

partner the Visionary rather like 90% of

the time okay so in this relationship

and as far as the hearing aid store goes

it is an operator and a Visionary in

that situation you're not the integrator

really in this in this I am when it

comes to the operations of the business

I'm not selling the hearing aids but I'm

the one looking at the metrics and what

metrics we decide to look at and View

and what metrics are important and what

our goals are so what do our quarterly

goal are we hitting it okay what's our

annual goal our monthly goal weekly goal

what's our numbers where are we and so

that's that's where I can get a gauge of

the overall health of the business now

and six months from now and have a good

idea and projected forecast our earnings

um six months down the road a year down

the road dependent on current activities

that we're doing today so that's that's

where I am involved in monitoring those

metrics and activities to make sure that

we are profitable three months from

now okay gotcha um I didn't ask about

this but this does bring this up are you

guys doing like cost allocating or

something like that is it paying you

paying the construction company for the

overhead that's being provided or you

guys just absorbing that as partners on

your end no um no we're not we don't

co-mingle much of any of that all of our

stuff is is

separate um the hearing a compan is not

paying for accounting right now CU you

guys are doing that over here or do they

when your accountants are working on

they're billing it to the company that's

it yep so same account same accounting

firm um but hearing is paying for when

they're working on hearing gotcha so

when your marketing wing of your

construction compan is doing marketing

for that it's getting paid by by hearing

when we market for hearing hearing is

paying for that marketing yeah yeah

that's that's let me rephrase that so we

we have in-house marketing like an

in-house marketing company that the real

estate team pays for so we're able to

leverage that to help offset the

marketing cost for our hearing if that

makes sense explain that a little bit

more yeah so we're already paying for

for a marketer our real estate teams

already paying for a marketer who's

incredible and so when the Visionary has

these incredible marketing ideas and he

brings it to me and that the marketing

gal for the hearing aid company um she's

already in house so we can Le we

leverage her to where sure the marketing

is paying for maybe any marketing

material or Google paper click campaigns

direct costs okay so we're able to

leverage the fixed costs that we're

already paying for in the other

businesses was that your question yeah

that is that's what I'm trying to

understand is if you know if they if the

two companies were to separate those

costs are not currently being reported

in the income statement for that for

necessarily all the work that's being

done there there's a lot

are

CRA hours work on the you know filling

out the okay yeah that's kind of what I

was I mean just by fact of that alone it

could you know it turns profitability in

a company very quickly of just that that

cost sharing so okay how would you

advise somebody who is an operator and

loves their technical role to get more

involved to make sure that you and your

partner obviously are not but but you

and your partner are not also ripping

them off yeah so he he he's involved as

far as he knows every penny and sees

every penny on paper what comes in and

what goes out so he is he is 100%

cluding to what our marketing costs or

what we're spending on campaigns

or

um what Supply costs and the margins

between Supply and what we can sell them

for on the market so he's completely

plugged in to all of that now is he

plugged into how we've run the ad

campaigns and how we Target and redirect

no would I recommend he understand that

no it it doesn't make it doesn't and

unless he wants to go and run on his own

and do his own stuff but then that would

be a horrible use of his time his the

best use of his time is to sell so he's

partnered with you guys whereas before

his other partner says don't worry about

it I got it covered he's partnered with

you guys and you're like no we want you

to understand this this we're going to

teach you what this means we're g to you

know show you what it means to be

business owner so yep we want you to see

every dollar coming in and coming out

and we have nothing to hide absolutely

not you know we're we're totally

transparent as partners we should be and

there's no hiding anything especially

when it comes to money

other than taking

the the rocket fuel test and you know

you said your main question that you

wanted to talk about here was finding

the right

partner and so

hard I mean I'm still finding out things

about my partner after seven years that

I didn't know you know going into it I

know you are too you just find out

people change and yeah they say

something's important and then you sign

the agreement and find out something

else is important important so yeah how

do you go about finding the right

partner because you know like marriage

it's like I don't want to tell you so

much that you run away but I want to

tell you enough that you can trust that

I'm telling you I'm not you know sugar

coating everything how do you find the

right

partner uh and keep yourself from

finding out six months from now or a

year from now I've made a huge mistake

what what are your thoughts on that

because you've been burned too so um I

have been burned to many times uh with

Partnerships uh the partner that I have

now we've been I mean it's been like go

eight years I've known him for almost my

entire life and so that's been super

helpful you know i' I've known his

personality I know what he's good at

what he struggles at with um and so I

knew what I was getting

into for having known him for so long um

but we I have been so quick to jump in

Partnerships off of excitement and

knowing my ability to

integrate um wanting to partner with

other Visionaries and build their

dream

and they just don't have the grit that

it takes to to build it and I know your

your big thing is um jumping into B

pre-existing businesses and not starting

from the ground up the best business I'm

a part

of well it's I shouldn't say that but

one of the best businesses I'm a part of

is the one that was already

operating and it requires the least

amount of work uh and it's one of the

most fun to be a part of this is hearing

or this is this is hearing yeah this is

hearing you the construction company

it's man it's tough

and it's not fun it's not fun at all I

would have rather bought an existing

Construction Company then started from

scratch

why because I would have had the ability

to look at history past sales who's been

in the business what they're doing

operations expenses income relationships

vendors I have all of that information

that I can make a decision on whether or

not I feel good investing in this

business starting from zero you don't

have any of that history and so you're

going into it

optimistic thinking that everything's

going to work out great well optimism

optimism kills

businesses and you know optimism has

killed some of our

businesses and so anyways that I I love

like I said Cody Sanchez and and and

your whole point of this podcast I love

businesses that are already operating

that just

need

structure and need some direction on

what to do and how to grow and lots of

times it's Visionaries who can't let go

of the vine and they want to do

everything themselves they have trust

issues and

so anyways that's that's that's what I

would say yeah it's interesting to hear

your perspective I mean on mine the the

downside of buying an existing business

from a Visionary is it's not my baby

like it's not I didn't create it from

scratch I didn't make every single

little direction or innovation that now

defines this company so I understand I

I've gotten over that um but from an in

integrators perspective I would think

like all the processes in a in a healthy

company when you acquire it they're all

they're all set but you don't see it

that way you see it

as we have processes that are working

working or correct me if I'm wrong you

see it as we have processes they're

working and now I get to choose which

process I want to focus on next is that

kind of how you approach that correct

excited and you I don't have to solve

everything I can solve the one I want to

so and you can work on it piece by piece

but going back to the Visionary piece

you operate

emotionally and so yeah it's my baby

right like I I want it cool I'm more

focused on like tangible numbers

and like tangible outcomes and so if if

there's a business that's operating if

there's an opportunity to add value to

increase revenues and if you're valuing

the the business based off of three

times Revenue 10 times Revenue whatever

industry you're in I'm going to try and

find that value at Opportunity increase

sales and revenue to increase the value

of that business just like real estate

in the commercial world it was the same

we would take C-Class properties and put

in b class tenants and fill vacancy and

add value over the millions of dollars

of value over the course of 12 months

and the same thing can happen in

businesses if you know how to motivate

incentivize and cut the fat on business

operations okay

awesome uh practically speaking what's

the minimum time you would say feel out

a future partner before jumping into

something to make make sure that it's

not just

excitement from ground up or from a

pre-existing business bringing somebody

into a pre-existing

business I I I'm I'm struggling here I

need to bring in a partner how long

should

I yeah I know right so so a lot of my

friends you know I ran my own company

for six years and I went back to being

an employee and I didn't actually become

a partner here until I've been working

here for three years but that was

intentional because my partner say she

wanted me to have an exit plan I didn't

fire my clients when I came in here they

didn't acquire me she wanted to make

sure I wanted to be here and it took you

know one and a half of those three years

for me to make that

decision but and so many people are like

how could you go back to being an

employee why didn't you just become a

partner from day one and it's like

because we don't know there's a lot of

stuff we don't know um yeah I think I

think what what you just said is exactly

what I'd recommend

bring them in as an employee with the

expectation of if such and such happens

and we grow x

amount you can have a ownership

opportunity that way there's there's

like this grace period in this

probationary period instead of jumping

straight into bed with someone that you

don't have a a really long history with

um I would definitely

recommend starting off as an employee

and working your way up if we were to

ever bring a partner into our business

that's how I would do it I don't think I

would ever put someone in as a partner

right off the bat and I don't care where

they came from I don't I don't care if

they were the CEO of Amazon um because

their personality and their their values

may not mat it's going to change that

company and yeah if they're a partner

from day one it's going to be that much

harder to get him out on day 30 than if

they're an employee like it's not

working out so absolutely and I want to

see if they I want to see him sweat I

want to see him struggle how are you

going to you know progress through

adversity are you the type that just

gives up and rolls over or do you stay

late and fix it and you can only tell

that by actually being in the trenches

with

them man that's good uh anything else

here before we before we wrap up the

call jerem that you wanted to talk about

no I don't I think so I appreciate you

having me yeah thanks for being so being

on here so much it is good to hear the

the outside investors perspective on

these things

um yeah okay so what I like to do with

my guests at the end of the show is just

do a lightning round and you know this

is a chance to get to know my guests

just a little bit better and find out

you know some of their thoughts on uh

other things how they think about

business how they think about you know

their place and the marketplace so are

you ready for the lightning rounds I'm

ready I think okay all right first

question is uh coffee or tea and how do

you like it neither I'm a water guy okay

water water uh trying to hit like eight

eight gallons or not eight gallons eight

cups a day or anything like that no I

try but I can't drink that much even

being here in Phoenix and it's hot as

you know yeah it's hot yeah um it's I I

don't even know if I get eight cups a

day but I'm just a water I don't I don't

caffeinate um okay so it's water for me

that's my choice all right alternate uh

iced or

tap oh ice absolutely ice

water all right my wife's the same way I

can't drink ice water oh man I can D tap

makes me sick all right uh pie or cake

cake any specific

kind um not necessarily it has to have

have like a ton of

frosting if the frosting isn't as thick

as the actual Cake part I won't eat

it all right uh what is a common belief

among entrepreneurs that you would want

to

challenge

um there's other people out there that

are just as good as you

are um I think as an entrepreneur myself

I think that I'm the only one who can do

it right and that is not the case if if

I can just give people a little bit of

trust and

Grace they end up being able to perform

a whole lot better than I can on a lot

of aspects of the

business okay gotcha so it's kind of

like that idea of higher smarter than

you on certain things yeah y okay y uh

what's your favorite holiday and why

Thanksgiving is my favorite holiday I

love food I'm a huge foodie um I used to

love Christmas um but it just it's too

commercialized for me now and so it's

too stressful as a parent too Christmas

is stressful Thanksgiving is fun

relaxing you're with family you're

eating food the weather here in Phoenix

is nice so it's for me it's Thanksgiving

hands down awesome I think you might be

my first guest that picked my favorite

holidays nice

uh do you consider yourself a morning

person or a night person and do you have

a favorite

Routine Morning yep I'm up at 4: 4:00

a.m. every morning um and the the the

routine is the gym I'm in the sauna for

20 minutes and then I I lift weights for

another 45 minutes and then I get home

get my kids ready for school and then

I'm off to work okay

awesome uh what is one thing that you

would want your successor to Remember

You

for yeah so I like that question a lot

and I think what I would want to be

remembered for

is

how how hard it was to get to

where we are and didn't give

up um and so if whatever successor takes

over what we have them knowing that we

didn't give up when it was

hard okay

awesome uh where where do you find

yourself finding creativity right

now um I don't I let my Visionary do

that you're an integrator so I I know my

lane and when my partner says this

is exactly you know what I uh I'm the

Visionary at home um but I'm not the

Visionary at the office and so I I tend

to to not be very vocal with my uh my

creativity okay but I know integrators

can be very creative when it comes to

processes yeah exactly that's just what

that gets them excited rather than a

direction or something off in the future

they like no this right here I want to

get stuck in on it for the next two days

and that's it don't bug me that's it

nice uh and and what do you guys have

coming up I guess with with the hearing

uh the hearing aid store what do you

guys have coming up in the next year so

that's got you really

excited um you know there's there's a

another shop that's looking to

sell and it's about two hours north of

Phoenix

and that's exciting we we feel like

we're really close to the point to where

we can afford to expand um we have been

in talks with this operator for six

months now and there's a a high

probability that that might be something

that we pull the trigger on if we have a

good fourth quarter fourth quarter here

in Phoenix is good because snowbirds

coming to town and uh there's a lot of

old people in Phoenix during the winter

and so depending on what that looks like

and how well we're able to do we'll

determine on if we can afford kick span

our business all right interesting very

good uh well thank you Jerome uh Jerm I

really appreciate you being on uh a

guest of the artist sucession podcast

this has been great thank you so much

hey thank you Barrett