If You Had To Exit A Business Agreement, How Would You Do It?
How do you create exit strategies for business?
Find out with Cathy Vartuli from http://www.TheIntimacyDojo and Reid Mihalko and http://www.ReidAboutSex.com.
Cathy: Do you have exit strategies for your business?
Reid: How do you escape!?
Cathy: Is that what you’re trying to do?
Cathy: It kind of looks like you might be having-
Reid: I’m like in a straitjacket. My business is a straitjacket! How do I escape!?
Cathy: This is Reid Mihalko from http://www.ReidAboutSex.com and Sex Geek Summer Camp.
Reid: When I wear my sex geek summer camp shirt, we’re talking about the business of being a sex educator so … But the relationship advice inside of how you run a business could apply to you, in your relationships. This is Cathy Vartuli from http://www.TheIntimacyDojo.com.
Cathy: Exit strategies … One of the concepts when I first started following your relations, like on your relationship advice, I was like, “Oh my god, this is brilliant.” We suggest that people who are in relationships, while things are going good, figure out how they would break up and what they would go through, in order to have a clean break up, and then be sure that it was the right thing for them. We’ve applied it for your business, our business together and I’ve applied it with some other businesses, including a little business I have with Rick Wilkes at http://www.ThrivingNow.com, and it’s a really powerful concept. It can evolve over time. Mine has evolved with you and it’s evolved with Rick. As the business got more closely intertwined and there was more investment in time and energy, I went from having … We’d have a weekend discussion. We’d have 2 or 3 days of discussion and we’d meet once. To now, my agreements are it’s three weeks. So if one of us said, “Hey, I think this isn’t working. I think we should talk about exiting.”, that we’d have a three week time period where we’d meet three times and we’d have a weekend together, in person, and get mediation if we felt that was useful, to try to work out any bugs and make sure it’s not just like, “I’m really pissed off. I’ve had a bad day and I’m just going to lash out at anybody who’s near me.”, and that’s really reassured me. I was someone, who every time we had an argument or a disagreement, was kind of like, “This might be the end.”, and knowing that someone would actually have to say, “I think we should exit.”, let me be much more present in our discussions and much more self-expressed. Not feeling like I had to hold back to preserve the relationship, which is not a very healthy way to be.
Reid: No, and this is a, it’s a … I get a lot of flaks sometimes because people are like, “Why should we be having the break up conversation”-
Cathy: Yeah. “When things are going great.”
Reid: “when things are going great” doesn’t that mean that we’re both not committed to the relationship. I use the transition kind of conversation and the break up conversation as an assessment tool, because you’re looking to find out, and this is why you’re doing this before you get into the relationship or before you start a business relationship or decide to co-teach a retreat together-
Cathy: It’s not too late if you haven’t-
Reid: Yeah, you didn’t do anything wrong because you can start having this conversation now. The idea is, while I’m having the conversation I’m learning a lot about if this person knows what they need to feel respected, if we want to end or transition or shift our working relationship. If the person that you’re considering doing business with or starting a relationship with, is like, “Well we don’t need to have this conversation because”-
Cathy: “We’re fine.”
Reid: “You’re amazing, I’m amazing.”
Cathy: “We’re going to love each other for ever.”
Reid: “We’re going to work together forever, aren’t we?”
Cathy: Ooh, that’s a good-
Reid: And then you’re like, “Okay.” That tells you a lot.
Cathy: They might be boiled bunnies in the kitchen.
Reid: See, now I’m thinking about that movie, whatever that movie is called, Basic Instinct. Aha! This conversation is an assessment tool as you’re getting into something with somebody, to figure out if they know what they need, and then for … And if you know what you need. It’s okay to not know what you need, because some people haven’t done a lot of business agreements or projects together and some people haven’t dated a lot, so they wouldn’t know what their break up needs are. Once you start to know those things, now you can use your words. Am I partnering with somebody who knows how to use their words? Then you can start creating a win-win situation, for each other that leaves you both feeling loved, honored, cherished, in the romantic world, and in your business, smart and respected and seen and acknowledged. That allows you to, 1. have a better transition, but those are things that they probably need, in the business. Then you can start learning about each other’s needs and be better business partners together, which should make your business easier.
Cathy: Also, knowing how you’re going to split the finances in the business. Any copyrights, any intellectual property-
Reid: Who gets to keep these CDs and the albums?
Cathy: Yes. It’s really useful and it stops a lot of fights. “Well I just assumed, of course I’d get that program.”
Reid: “Of course I’d get the Hitachi rechargeable magic wand.” Or just the rechargeable Magic Wand now. We don’t say Hitachi.
Cathy: A couple of tips on this, is 1: any programs I do with Rick or Reid or anybody else, my standard agreement is we both get to use it separately. We can sell it separately or together and as long as we’re using that program, the other person gets 50% of whatever sales, minus the cost of selling it. If after, and we said after 2 years, if someone wants to create that same … We do upgrade that same program, just themselves, they get to do that but they don’t get to do that, before 2 years, unless they give some royalties.
Reid: Basically, it’s a grace period where you can make money off of each other, share the intellectual property-
Cathy: Even if we’re no longer actually working together, if it’s on his story and he’s selling it and it sells, he sends me some money and I do the same to him.
Reid: At some point if we stopped working together, or even if we continued working together, but I wanted to re-cut that program and have it for whatever reason, just to be me in it or even somebody else-
Cathy: After a certain amount of time it’s okay.
Reid: You’re allowed to do that, it just helps. Now most people aren’t going to re-cut the program because we’re just too lazy and record. We don’t schedule our time, so you’re hedging your bets there. Just make sure that they’re decent enough at paperwork that they can keep paying you. But what it does is people don’t have to feel trapped and it gives people choice. It makes things a get to rather than a have to. If I want to re-cut and upgrade that program and I want to include Cathy-
Cathy: Then it’s free. Then it’s fine.
Reid: Then it’s fine. I can upgrade things and I can change things and it has to work … It’s the same on Cathy’s side.
Cathy: I get to do the same thing.
Reid: We may want to shoot a video about fair versus equal, in business.
Cathy: Okay. Just one other quick tip, because this is getting long. Rick and I have, because we co-own the business together, we have an agreement and it’s written in our exit agreement, our agreement for the business, is if we decide we’re exiting, we go through the three weeks and we decide we’re splitting the business, we can offer to buy each other out. Whoever offers to buy out for X number of dollars, the other person can turn around and say I will buy you out, for that amount of money. If I wanted to buy Reid Rick, I would have to offer something that I thought, “I was really fair.”, because he could say, “No. Instead, I’m going to offer you that amount and take the business.”
Reid: You have to accept the offer that you gave him. I think it’s pretty genius, for a lot of different reasons.
Reid: I want to continue this conversation, so we’re going to do a second video and then we’ll do one on fair versus equal.
Reid: Leave comments!
Reid: What’s useful so far?