Even if you’re business is going great, having an exit strategy can help strengthen it and help you get your needs met.
Learn how with Cathy Vartuli from http://www.TheIntimacyDojo.com and Reid Mihalko from http://www.ReidAboutSex.com and http://SexGeekSummerCamp.com.
Reid: Exit Strategies II, Part 2, which means there’s Part 1, so go check out Part 1 so you can jump in on this one. I’m Reid Mihalko from http://www.ReidAboutSex.com and Sex Geek Summer Camp and when I’m wearing my Sex Geek Summer Camp shirt that means we’re talking about business. We’re sex educators. This is Cathy Vartuli from http://www.TheIntimacyDojo.com. We’ll also usually mention talk business and stuff Rick Wills from http://www.ThrivingNow.com which Cathy and Rick do that business together because Cathy is very polyamorous. Has lots of business partners. All right, Exit Strategies.
Cathy: You want to talk about favoritism?
Reid: No, I want to do exit strategies and then we’ll do another video about favoritism. I want to reiterate this piece because I think it’s useful. We started talking about on other videos, just watch these videos, about being poly in your relationships and being primary wired in your poly, so if you’re polyamorous, or in your business meaning that you do business with a bunch of different people, like Cathy does. Or you do projects, you co-teach and co-create with a bunch of different people. If you like to work with a lot of different people then you can consider yourself kind of poly versus monogamous where you only work with one person, or build a team or company. This means that you’ll have more break ups if your polyamorous. You could dissolve a bunch of different companies rather than just one. Having these exit strategies and knowing what your needs are for breaking up, for transitioning out of a company, or having your partner transition out, will smooth things over. One of the things that people fight about and really fumble and creates a lot of frustration and anger is the money piece. Then you and Rick have a really interesting take on how you share things on getting out of the business. Go over quickly the IP stuff, the email list stuff, and then the money. Those three things, if you’re an internet marketer kind of thing, those are three land mines that people don’t think to talk about.
Cathy: For intellectual property, we both own any material we create together. As long as both of our names are on the program or whatever, we both co-own that, we both can use it as we like. We have a standard 10% cost of sales for online products because the credit card company takes some money, there’s administrative fees, that sort of thing, so we take 10% right off the top. Whoever sells that product…
Reid: For running their shopping cart…
Cathy: Right, if Rick and I had split up and we each have our own business, if he sells it from his store or Reid sold it from his store, there’s a 10% off the top for administrative. After that, it’s split 50/50. One of the nice things is, it’s the amount that’s brought in. If one of us is doing a summit, where we’re offering a discounted fee, we’re allowed to use it as part of the summit. We’re allowed to contribute that as part of that and we might be selling it for 25% of the original cost. We still split…
Reid: The 25%.
Cathy: Yeah, so each of us gets 45% of that the income from that. That’s our agreement, so if we split up or if I wanted to go and do your summit myself, I can take things that we co-own and I can run with it. It’s not locked in or I don’t have to get his permission or track him down. I just can’t devalue the program.
Reid: You’re not going to try to undersell each other.
Cathy: Right.
Reid: If you gave something away for free, that was a paid thing…
Cathy: Like as a bonus…
Reid: Like a free bonus, it still benefits him because he’s in the program.
Cathy: Right, he’s getting exposure. I wouldn’t say, “Oh, this is cheaper.” I wouldn’t advertise get it cheaper than Thriving Now, that would be undermining each other.
Reid: Fuck you!
Cathy: It’s that kind of split, I really like it. Each of us owns the copyright and then if one of us, as we talked about in the previous video, if one of us wants to re-cut it ourselves or with somebody else, because after a while you have new information, it might have been update, we have two years after the release of the program I can go and say, “Hey, I know we cut that together, but I’m going to cut the program myself or with somebody else.”
Reid: You guys share the intellectual property, it’s not intellectual property that you can use only for its present use.
Cathy: Right.
Reid: Got it.
Cathy: That makes it really easy and relaxed. We get to co-create together and create something without feeling loft in, am I allowed to use this concept because we talked about this in this program. What was the next?
Reid: The email list.
Cathy: Oh yeah. The email list for this, and again Rick and I co-own the business, it’s ours together. Each of us gets a copy of the email list. We have to inform them because if whoever ends up with Thriving Now has that list. It belongs to that, we promised never to sell it. But we can say, “Hey, I’m moving away from that, I’m inviting you to be part of a different list.” Whoever doesn’t get the business would have to invite people to opt in. We would each get to mail to that list to move forward. It’s not like the business goes away, if Rick kept the business, if we agreed to the money and he kept the business, it’s not like I would lose the list. I would have to invite them to come over to my topic.
Reid: Is there anything around emailing that piece where the intellectual property that you guys have veto power over?
Cathy: Yeah, if Thriving Now right now is a relatively PG13, we do talk about sexual intimacy issues, but at a rather outside in the open email we don’t talk explicitly about fucking. If I wanted to send something well outside the normal range that people opted in for, he could say, “No don’t, we don’t do that.” Or if I suddenly wanted to go into dog fighting or something that was totally off topic, that case, ear pumps, call somebody.
Reid: Tapping techniques for your fighting dogs.
Cathy: If it was totally off topic, we could say no, don’t do that.
Reid: Then last, but not least, money. How do you guys do money?
Cathy: In terms of the business?
Reid: If you want to share.
Cathy: I’m not sure what your question is.
Reid: As you’re exiting, how does the money work? This is where the piece I think is really brilliant around how you guys buy each other out.
Cathy: If we agree that we’re not going to work together anymore, we’ve gone through our exit strategies, tried our mediate and it’s not working. We can divide the business. One of us can offer to buy the other person out. What’s written is say I make the offer and I offer say I’m just going to make up a number, $100,000 to Rick for Thriving Now. He can say, “Humm, no, I’m will give you $100,000 for the business, I have to take it. I would only make offers that I would be willing to accept and it keeps the fighting and the conflict way down.
Reid: I just think that piece is really brilliant and I think that piece is probably brilliant in a relationship way too. Figuring out in your romantic relationships, if you owned a house together.
Cathy: I have to give Rick credit for that. That was his idea. I was relatively new to the business and I’m like wow, that’s really a great idea.
Reid: It kind of keeps people honest, that if I’m going to make you an offer, I have to accept that offer if you counter offer. It’s just interesting. Again, there’s no right or wrong way to do this, other than if you feel cheated, frustrated, passive-aggressive, and now it’s a knife fight and you’re stabbing each other in the back. That’s probably how you measure if you’re doing it wrong. How can you leave each other feeling, seeing respected, understanding that you may have grief and upset from having things transition because usually the person who’s upset, things were going great for them but they need to be going great for the two people involved or the three or four people involved in the company, which is different than there’s just some turbulence because you’re working through something.
Cathy: I like the way we have it set up. We each have maximum freedom. I can work with whoever I want. I can’t bring whoever I want into Thriving Now. I can say, “Rick, I met this really cool guy Reid, he has this really great topic on awkward, is it okay if let’s do that together?” He loved it. We do bring other people in, but each get veto power as well. “No, you can’t do that.”
Reid: They’re in a primary relationship where they have to consider each other. Whereas in our working relationship, I basically get to call the shots because it’s my company. Cathy can weigh in on things but we’re not in a primary relationship in my company.
Cathy: As long as it’s clear and both people have agreed, that’s fine. It’s really comfortable for me, there’s not a problem with that. But if I thought we were in a primary relationship and that was how it was, I’d be like, “What the fuck is wrong with him?” There’s ways to talk about this.
Reid: The difference between you’ve just been sleeping over for a week versus I thought we were just roommates.
Cathy: I let my lease go. What are you talking about?
Reid: What? Leave your comments as we’ve gotten long, we apologize, we hope it’s been useful. Is this information useful? Let us know.
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If You Had To Exit A Business Agreement, How Would You Do It?
