Just over a year ago, I reached out to a friend who has previously built and sold businesses and asked him to partner with me. We formed a new company and I brought assets I’d built over years of being in business – existing customer base, programs, reputation, testimonials, email subscriber list, FB page and groups. We agreed to split profits 50/50. He became CEO so I could focus on what I do best: sales, content creation, and coaching.
One year in and this partnership isn’t working out for me. That’s not just my opinion, the business revenue has not grown as much as we expected and total profits have gone down. He has required a lot of hand-holding and he hasn’t put in place management systems that we badly need. I do not believe that we have the correct foundation in place to scale this business which was the reason he came on board.
I can see that I assumed a lot and have learned a valuable lesson about writing down expectations and agreeing on them.
There are some aspects of the business where he adds massive value, eg finance and legal – but it is clear to me that he is not the right person to be CEO of this business. I arrive at that conclusion based on his performance to date – but I am also concerned about a mismatch on our core values.
I want to renegotiate our agreement and I am continually putting off this conversation.
I want to propose that he stays in the company – but working in the areas where he can make the most impact. I will step into the CEO role (thanks to Entrepreneurial Management, I now have some clear direction on how to do this). I also want to renegotiate our equity and profit split. I think 15-20/80-85% would better reflect the relative contribution we have and are making to the business.
I have so many thoughts about this.
I have thoughts that 50/50 is what we agreed so even if I now see that I gave away too much at the start, I should just honor that agreement.
I think there’s no way he will accept this proposal, so we should just wind up the company and I’ll start over.
I think that even if he does accept, he will feel resentful and that will impact our company growth long term.
I also think that even if he does accept, that the gap I have noticed in our core values is a deal breaker anyway…
Where do I start with all this? I know I need to get clear in my thinking before I have the conversation with him.