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Welcoming a business partner mimics the process of getting married. There’s the stage of courtship, optional pre-marriage counseling, writing of the vows, and the big “I do.” In between and after comes the constant work, joining of families, and, nowadays, in 50% of marriages, a commitment that lasts a lifetime.
But just as with marriages, business partnerships are relationship-based. This can ensure a strong foundation but leaves room for plenty of disagreements and even the possibility of divorce.
Industry expert Mark Richardson advises remodelers across the country and has acted as a “pre-marriage counselor” for several industry partnerships. When getting into the “vows,” Richardson advises remodelers to focus on what could go wrong, not just what could go right. What if someone dies? What if you result in a personal divorce? “The more you look at ‘what-ifs’ and what could go wrong, the more likely you are to succeed,” he says.
And just because some partnerships fail doesn’t mean the structure should not be considered. “It’s like if you said, ‘Don’t get married,’” says Richardson. “People go into partnerships all the time. It’s not a holy grail, you have to work on it, but if you pick the right partner for the right reasons upfront, I think you increase the odds it’s going to be more successful for you.”
Here, three remodelers in different stages of taking on a partner share their experiences with making the structure work.
Stephan Sardone & Bryan McLain
A defining moment in Stephan Sardone’s career happened 20 years ago, but it wasn’t the opening of Sardone Construction—it was meeting Bryan McLain.
Sardone hired McLain as a lead carpenter in 2013, then moved him to production manager after three years, and now, partner.
The duo’s long-standing friendship and intertwined interests positioned them for a strong foundation from which a partnership would grow. And the potential success of that partnership would be aided by several smart decisions.
Goals Only a Partner Could Meet
Sardone based his decision to welcome a partner on his long-term goals, both personal and professional. More time, more money, and less stress were the overarching themes. “You have to be the type of owner to get your company there, and I’m not,” says Sardone. “I feel like my goals are higher than I am personally able to achieve by myself.”
And McLain had hit the ceiling of growth at Sardone Construction. He knew that unless he wanted to continue in the same role, a partnership would be the next logical move. He hadn’t considered leaving the company, and Sardone would not let him either. “At one point do I say, ‘I can’t live without this human in my business?’” says Sardone. “Not everyone is as lucky.”
To make Sardone Construction into the company he wanted it to be, Sardone needed to focus more on management. But it’s not his strong suit—he’s more of a risk-taking entrepreneur, as McLain describes him. McLain was the doer: managing books and schedules. Together, their personalities and capabilities balance each other out. “The trust and respect we have for each other is there,” says McLain. “I can let myself be vulnerable, and likewise with him, I can slow his brain down.”
Working on the details of their partnership took the duo eight months, which included strategic planning, taking inventory of values, and solidifying their vision of the company today, tomorrow, and years down the road. The partners plan to start anew later down the line, forming a new name and fresh identity eventually to better meet their new goals. With reviewing their identity also came the ability to choose their desired clientele and projects rather than accepting whatever reasonable work came their way.
“The most important part of a successful business is your identity,” says McLain. “Knowing who you are and where you’re going.”
Working with Mark Richardson would be the best decision the two made during this process, they say. Richardson’s mantra of creating a win-win-win situation for both parties and the company helped Sardone and McLain decide on a five-year payment plan to reach a 45/55 ownership split.
Don’t do it alone
Create a detailed vision for the company
Look at it as win-win-win
Zak Fleming & Marc Black
Des Moines, Iowa
Partners for four years
When Zak Fleming told a friend that he needed someone like Marc Black to expand what was then Fleming Construction, his friend jokingly asked, “Why would Marc want to work with you?”
Black had a reputation in the Des Moines area for being a well-respected general manager, and the two had become good friends over the years. The topic of partnership only came up as jokes, but Fleming hit a stage where his company could no longer handle the volume of work with the current team they had, and finding the needed managers proved harder than expected.
Fleming knew he could not afford Black as general manager but also knew he had to have him.
The two officially announced their partnership in 2018 when Black purchased 40% of Fleming Construction, which became Remodeling Contractors in 2020.
Reputations & Hesitations
Black had seen remodeling partnerships flourish, and just as many fail. Knowing of those that worked well brought enough clarity to go all-in with Fleming. Their mutual trust and thorough discussions helped ease the transition as well.
One hurdle for other remodelers may be their ego, notes Fleming. “The trick is to realize you’re not good at everything except being a carpenter or whatever your trade was,” says Fleming. “Having the humility to realize that, and take on a partner to take those roles.”
Given Black’s reputation and years in the industry, he could have ventured off with his own company but recognized the challenges of starting something from scratch. Becoming a partner would give him the stake he desired while maintaining much of his existing responsibilities.
And a great benefit to partnerships is the wide variety of agreements available, depending on you and your partner’s end goal, says Black. For the duo, Black’s purchase of 40% of the company at a median valuation would be best.
Questions to Answer
Two important areas for Fleming and Black to figure out were understanding roles and valuation.
“We set up a good understanding of where we each fit in the business,” says Black. “We could take on the hats we wanted to wear and define the hats we didn’t want to wear, which is a benefit of being a business owner.” Both parties ordered separate valuations of the company to determine a buy-in plan and price. Fleming notes that coming to an agreement was easy because he saw the inherent value of welcoming Black and where the company would go. “When you go into a partnership, it’s not about cashing in your chips,” says Fleming. “I didn’t sell at the high valuation with 40%, I sold at a median between the two because I wanted it to be fair. We’re investing in the future of our company.”
Today, Fleming says that welcoming Black was the best professional decision of his life.
Tailor the agreement to suit your needs
Be honest and humble about your role
Obtain two valuations of the business
Brandon Bailey & Jon Steimel
Partners for 13 years
Desperate, bored, and broke are three adjectives that Brandon Bailey uses to describe the first four years of running Bailey Remodeling. The company opened in 2005 and made it through the Great Recession, but only because the scrappy 20-something had nothing to lose. “I was at the bottom,” recalls Bailey. “Whatever I was doing wasn’t working, but maybe if there were two of me, we could have more fun.”
He knew Jon Steimel from college and always regarded him as an efficient, reliable professional. Those were Bailey’s only criteria at the time. And unlike others who may hire an advisor or take months of talks, the duo learned through trial and error.
It took 10 years before they realized their shared core values were their most impactful attribute and discovered what system worked. Initially, both attempted to run every part of the business together. But after taking inventory of their strengths, Bailey agreed to lead sales while Steimel handled production. “Once we did that, we started seeing some real growth,” recalls Steimel.
Identifying strengths helped identify the company’s challenges. Bailey, for example, admits he’s not a project manager. Steimel had a natural talent for efficiency.
Another trait that works to their advantage is adaptability. Coming from business backgrounds rather than trades backgrounds left room to learn, and being coachable helped tremendously.
The duo began working with a business coach who was “instrumental” and welcomed any opportunity to learn, leading with a humble mentality of recognizing they don’t know everything. “One of our pieces of success has nothing to do with partnerships, but we’re always willing to invest in coaches. We are strong believers that people have done this before, we shouldn’t have to figure this out,” says Steimel.
While Bailey initially wanted to give Steimel half of the company right away, Steimel was more cautious. The phone may not have been ringing off the hook, but there was existing clientele, and he was concerned about possible resentments down the line.
The two compromised: Steimel would increase his company shares yearly as long as revenue goals were hit. What began at 25% would increase 5% each year and cap out at 45%. Though the 55/45 split puts Bailey with more ownership, the pair’s partnership runs as though it’s 50/50.
Invest in coaching
Tailor your agreement to your own situation
Don’t keep score