How Do You Make a Business Partnership Actually Work? | Dave Valentine

PROFITABLE TALKS...

In this episode of the Profitable Creative, host Christian Brim speaks with Dave Valentine, co-owner of Finch Agency, about the intricacies of business partnerships, the evolution of their marketing agency, and the importance of understanding profit in business. They discuss the challenges faced in marketing and technology, the significance of problem-solving, and the realities of business ownership. Dave shares insights from his entrepreneurial journey, emphasizing the need for a strong mindset and proactive financial management.

PROFITABLE TAKEAWAYS...

• Business partnerships can be like marriages, requiring alignment in goals.
• Understanding profit is crucial for business sustainability.
• Navigating the challenges of marketing technology is essential.
• Proactive financial management is key to business success.
• Identifying and solving problems is vital for growth.
• Many entrepreneurs operate as glorified freelancers rather than business owners.
• The importance of having a complementary skill set in partnerships.
• Profit First can provide clarity in financial decision-making.
• The entrepreneurial mindset is about achieving results, not just maintaining relationships.
• Early business ventures often teach valuable lessons about management and strategy.

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Transcript

Christian Brim (00:01.24)
So, okay, your first partner you had to buy out. What do you mean by that? You had to buy him out.

Dave (00:05.699)
Yeah.

Dave (00:12.462)
So I think it goes back to a little bit about what we're talking about, Christian. He really wanted a business where he was the boss. He was the creative side. I was really all the business side. So he really loved that. He really wanted to work 35 hours a week. think that that was an express desire that he had. He enjoyed that. He wanted the work-life balance. he had just gotten married and I had two kids.

And I just was like, dude, I'm playing a different game than you. Fundamentally, we're just, want different things. I'm working 60, 70 hour work weeks to keep us progressing. And you don't care. You just want to live a light, easy life. And that's not what business is. So if that's what you want, you need to go find something else. And, you know, he came back and wanted...

Christian Brim (00:49.293)
Yeah.

Dave (01:10.782)
X amount of money and I told him this is what I'm offering. Basically, he wanted 20 % more than what I initially offered. And I told him that he had a deadline. And he decided to extend that and asked for more money. And I told him no and I gave him less. And I said, hey, I took out a loan on the business. If you want to go fill the loan, go for it. It's yours. You can take the business with you. And he was like, this is

crap, this is crazy, and it was a shrewd move on my part, I'm not gonna lie. Also, should have taken the money. So, yeah.

Christian Brim (01:50.614)
Yeah, that is is shrewd. am how how did you know? I'm not going to go down that road. I talked to a lot of people that have business partners and and my lawyer, my business lawyer is a good friend of mine for many years, and he describes a business partnership as as marriage without sex.

And, you know, I don't think, people give enough weight to the decision to have partners, and certainly don't do enough thought or planning around it unless they've had a bad experience. But I think this euphoria of starting a business and you, you, you mentioned you had a skill set and your partner had a skill set and there's this.

idea that well we complement each other and and you just get caught up in it and you go but no conversation around like well what does this look like if we you know get divorced and you know I've seen a lot of situations where they end up in a bad marriage and they don't really know how to get out of it and unfortunately both people are you know the business is negatively affected because if

If you're not, if you're not equally yoked and you're wanting the same thing, then you're just constantly going to have this internal struggle of push and pull.

Dave (03:31.214)
Absolutely. Yeah, as I've gotten, having had that experience, having run 10 different businesses now, or owned 10 different businesses now in different formats, and this is my 11th.

I look for business partners that really are going to match my intensity towards the goal at hand. That's number one. If they don't have the same intensity to achieve the goal, we don't even get out of the starting gate, right? It's not even a conversation. And then number two is, do they have a skill set that complements mine? It could be, we can have some overlap for sure, and they need to be able to handle some piece of the business that I'm fundamentally incapable of doing.

Christian Brim (04:02.189)
Right.

Dave (04:16.544)
and vice versa. And that very rarely happens at this point in my career. Very rarely do I find business partner, it happens still, it's happened recently. Very rarely do I find people that can bring something to the table that I can't bring. Very rarely do I find people that have the same level of intensity. It does happen when it happens. I get excited. And a lot of times what I do at this point, Christian, is I go, hey, can we partner?

Can we do some work together on a contract for a while? Because I test those waters. And you're right.

Christian Brim (04:53.154)
Sure.

You got to date them before you marry them. You don't just, yeah. Yeah. And, and I'll say that I've seen a lot of people, entrepreneurs bring in employees and give them ownership with the idea that they're going to act like owners and then are shocked when they still act like employees. And it's like,

Dave (04:59.032)
Bingo. Bingo.

Christian Brim (05:22.658)
Just because you gave him a piece of paper doesn't change anything. I mean...

Dave (05:26.764)
That's it. You have to start a business. There's got to be something fundamentally wrong with you. I've got a buddy that I've known since high school. One of his younger brothers actually works with me at Finch now. He and I were chatting recently and he does ultra marathons.

Christian Brim (05:35.816)
I would agree with that.

Christian Brim (05:55.918)
Something's wrong with him.

Dave (05:58.06)
Yeah, something's wrong with him. And I'm just like, dude, there's no, you know, I mean, and his wife will literally tell him like, hey, you gotta get out of here. You need to go run 20 miles. And he will. He'll go run 20, 30 miles in a day for kicks and gigs, right? And I'm like, dude, there's something wrong with you. And I mean that with love to him. And I mean that with love to anybody that's listening, because I'm one of you. That's like, I mean, 11 businesses now.

That's insane. That's bananas. What in the world is wrong with me? And I just love it. I love getting up in the morning. I love doing it. I love taking my dog for a hike at five. this this morning. Taking my puppy for a hike at five a.m. And doing that for a couple hours and coming back and getting after it, that is pure, I mean, I was smiling ear to ear the whole time and I was excited to get back in the office and get to work. And so I think that there's something about that.

too, and realizing that you need to find other crazy people and employees, most people on the planet, they don't have that gene.

Christian Brim (07:01.524)
Now, I say this with it may sound like a joke, but it is all seriousness that I think entrepreneurial people that it's a medical condition. It's a psychological dysfunction. And I don't mean that in like it's negative, but like to have the mindset that functions as an entrepreneur and as successful as an entrepreneur.

requires you to be fundamentally different than everybody else you're around. I mean it just... you're just not the same.

Not at all.

So you mentioned the pumpkin plan. Have you met Mike McAlewitz?

Dave (07:49.442)
Mm-hmm.

Dave (07:53.006)
in person now.

Christian Brim (07:54.966)
Okay, have you read Profit First or other of his books? Okay, so talk a little bit about how Profit First has impacted the way you run businesses.

Dave (07:57.582)
Absolutely, yeah.

Dave (08:13.038)
It helped me, I think that one of the things that I struggled with, I had, we didn't talk about this Christian, but it's worth bringing up at this point. In my early adulthood, I was dual pathing my life. I was studying marketing and advertising in my teenage years and had an internship to do that. I also had an internship with a student pastor.

because I thought that that was a route that I was going to take as a professional Christian. I even was a student pastor. I'm ordained. It makes me giggle to know and.

Christian Brim (08:49.358)
Okay, wait, I gotta pause. You've coined a phrase now, a professional Christian. I love that. I'm never a professional Christian. Okay, go ahead.

Dave (08:54.936)
Yeah. So I had this intrinsic desire to be profitable and overly generous with people. Could be clients, certainly staff. What Profit First helped me understand in a really meaningful way was that

Christian Brim (09:12.578)
Hmm.

Dave (09:23.812)
The led to job security for my staff.

Christian Brim (09:27.223)
Yes.

Dave (09:29.036)
seems abundantly intuitive at this point in my life. In the moment when I first read it, I was like, and it felt like a no-do then too. That being said, it's been the brightest thing that's really shown for me, and it's also changed how we run accounting. We started running accounting in our own form and fashion of how Profit First would dictate it.

to fit our business needs. And it helps us track those line items very clearly. Hey, look, this card is associated with ad spend. Look at that. This card is associated with only marketing events. Look at that. So we can easily delineate those items. But then the most powerful thing was we were always able, I was able to actually pay myself a fair wage.

for what I was doing for the size company that I had. It has had a positive impact on my family. It's had a positive impact on my staff. And it's allowed us, mean, COVID hit as a good example. We had sold one company and started a new one in September of 2019. Cause you don't know that these things were going to happen. So we did.

$900,000 from September to December of 2019. We're crushing it.

New year, we did 700,000 in 2020. And so the good news was is that I had done Profit First. When I sold the first business, I made sure to keep some cash. So when I couldn't take a salary for that year, because I needed to pay my people, I needed to pay for the software, needed to yada yada, it was all fine. So yeah, Profit First has meaningfully changed my life for sure.

Christian Brim (11:30.99)
I, that revelation that, you know, you wanna be generous and you should be generous. But the idea that you could be generous to a fault in the business sense and that if you are generous to a fault, the business is no longer going to be there to be generous in the future. I'd also add that to,

to the necessity of profit is not just your employees yourself, but also to those that you serve. like, you know, what good does it do you if you go out of business because you don't make a profit and you can't take care of the customers or clients that you're taking care of? Right. I, I, I think back, I shoemaker not having any shoes. I.

In the accounting business, when I first heard Mike speak at an event, an EO event, he had just written that book and I was intrigued. And we first implemented it into the business, 10 years ago, right after the book came out. I think it's been out 11 years.

And it failed miserably. And there were a lot of reasons which I go into the book in my book about what specifically went wrong. But what it showed me very clearly was we weren't making the amount of money that we should be making. And we had some difficult decisions to make that, you know, profit first isn't going to make those decisions for you.

but it's going to tell you you've got a problem. And whether it's profit first or you develop your own system around it, having that information to give you feedback to say this isn't working, this is working, know, danger sign, danger sign is critical because the business grows to a point where you can't keep track of it all in your head.

Christian Brim (13:53.326)
or just looking at one bank account and saying, yeah, we got money in there today, we're okay. I had a colleague of mine that owns a company and they got north of $80 million a year in revenue and they didn't have a controller. And the owner was literally trying to keep track of it in his head and he finally came to the conclusion that he couldn't. I'm like,

Dave (13:53.838)
That's right.

Dave (14:16.201)
Wow.

Christian Brim (14:22.614)
No shit, I told you that five years ago. Like it's impossible. Like, and so he hired a controller and things are, are, are better, but you can't ignore your finances and you can't rely on not having a process around it. I, I promote profit first cause it's simple and it's proven, but you know, as a business owner, you have to proactively manage your finances or it's going to bite you in the.

Dave (14:22.73)
Wow.

Yeah. Right.

Dave (14:53.708)
Yeah, without question. Yeah, yeah, I mean without question, right? Like it's...

Christian Brim (14:54.048)
Amen. Can I get an amen?

Dave (15:01.994)
It is more complicated than your personal finances. And there are a shitload of people that can't balance their own checkbooks.

Christian Brim (15:10.656)
Yeah. Yes. Yeah.

Dave (15:13.176)
Figure it out or hire somebody else to figure it out with you.

Christian Brim (15:17.1)
Yes, very much so. Dave, this has been a very entertaining, fascinating interview. I would like to know how listeners learn more about Finch and you.

Dave (15:30.84)
Great. Yeah, you can go to finch.com and check out the agency. new agency site is going live at the end of this month. So that'll be fun to have it rebranded and different. Additionally, you can go find me on LinkedIn, Dave Valentine, and then I'm actually pretty active on social media. You can find me on TikTok, Twitter, Instagram, at real dval, R-E-A-L-D-V-A-L. And then one of the things that

Christian Brim (15:31.338)
If you're willing to tell me.

Dave (16:00.718)
I'd love to do Christian, we will do a free audit for any of your listeners that can shoot me an email, dave.valentine at finch.com. It's usually a $5,000 charge. We'll do it free of cost. We'll look at your SEO, we'll look at your ad performance. And we always offer that to other people and say, listen, if you don't love it, we'll give you full money back guarantee on that five grand. We've never had anybody offer, you know, complain about it. They're always like, oh my.

Christian Brim (16:07.47)
Nice.

Dave (16:29.986)
Gosh, this is incredible, this is amazing. So there's a lot of value in it. It takes our team quite a lot of time to put together, but love to offer that to anybody that wants to reach out to me now.

Christian Brim (16:40.504)
Well, thank you. We'll have those links in the show notes. Listeners, if you like what you heard, please rate the podcast, subscribe to the podcast, share the podcast. If you don't like what you heard, shoot us a message and I'll get rid of Dave. Until then, ta-ta for now.