Understanding the Digital Signature Lawfulness for Profit Sharing Agreement in Australia

How to eSign a document: digital signature lawfulness for Profit Sharing Agreement in Australia

hey Chandler bolt here and in this video I want to talk to you about why I don't believe in equal partnerships why I especially don't believe in 50/50 partnerships and why you should never enter into either now I've got a couple quotes on partnerships and then I kind of break down my core principles and beliefs and kind of really had a structure partnerships in this video the first one is from an old mentor of mine where he said don't partner out of insecurity and I feel like that's probably one of the biggest mistakes that people make is they partner out of insecurity right I know for me personally when you're starting a business it can be lonely it can also be frightening and you feel like you need someone there to kind of validate what you're doing and to tell you that you're doing okay and to help out right now here's the thing a lot of times that person can be an employee they don't need to be a business partner and by partnering out of insecurity you're gonna give up a lot of equity leave a lot of money on the table and also long term you're gonna be really frustrated because you're working with someone that you don't want to work with and then the second quote that always sticks with me it's from another former mentor of mine his name's Tommy Baker he says I love ships so this guy's got a yacht he says I love ships I love big ships I love tall ships I love long ships I love fancy ships but lord of mercy don't put me in a partnership right that was his stance on partnerships and I gotta tell you I've been burned on multiple partnerships so that is pretty in line with my stance on partnerships so I do not partner in business with people anymore it's not to say I never will this is my current stance because I'm just a firm believer if you're a really really hard worker then a lot of times if you're given these these 50/50 partnerships it's not gonna work okay so I kind of break into why I believe that and kind of what you should do instead so 50-50 partnerships there is no such thing as 50/50 effort 50/50 time spent and 50/50 value at so people just when they go into a business partnership the most common thing is like oh we just need to be equal well the fact of the matter is you bring different skill sets to the table right if one person's doing tech one's doing operations what would you have to pay in the marketplace for that now one way you can avoid a 50/50 partnership is to agree to pay yourself market base wages once the business reaches that point right so then maybe when one person is doing a job that you would have to pay some 125 grand a year right and you're only doing a job that you would have to pay someone 50 grand a year right so now you can set wages cuz I talked about this in another video on kind of compensation owner compensation but you get paid a salary for what you do you get paid a profit on what you own so what you're doing in the business oftentimes should not affect the equity that you have in the business unless it's at the very start so that's why when it comes to 5050 partnerships like there's just no such thing like and for me personally as I'm someone who's very driven very hard worker I found that people are just riding on my coattails right so I had I had two business partners and and one of them was just dead weight and then it went down to two and I'll tell this story and another video on how to buy out a business partner but then went down to two and then went down to one and what I found in that whole process is I did exactly the advice of what I just told you not to do I partnered out of insecurity I didn't believe that I could do it on my own and it literally cost me hundreds of thousands maybe over a million dollars at this point by doing that so I'm just a firm believer do not no matter what to do an equal partnership there's no such thing as equal equal work equal money you know obviously you need to evaluate how much money is this person putting in the business how much sweat equity there's kind of this equation how much skill set or value is being added what does that equation look like and I'm totally fine with partnerships as long as someone has a majority right I'm in a partnership for another business I'm at where I'm definitely the minority and that's fine because this I said to my business partner this is your business right you can Vito me on every decision I don't need to be the majority I'm an advisor and I'm an investor and this is your business so you run your business right so that's why I don't believe in equal partnerships and really what I think you should do instead let's create a partnership that resembles the work the money and the value that's being added to the business so are you bringing sweat equity are you being are you bringing capital are you bringing some other form of value for the business as a whole and is it absolutely mission-critical so that's one way that you can go or the other way that I've chosen to go for the most part it's just not do business partnerships I'm at the point in business now where I don't need to and I've got a lot of business partners they're just my employees and I include them in a profit share so they get a piece of the upside but we there's no exchange of equity and really this is a you know probably for a whole nother video but in a business where your goal is not to sell a profit share is actually better than equity because equity is only valuable if you sell right so they have something more valuable than equity which is the profit share and they're super happy I'm super happy I'm not putting a wedding ring on so you know a day after I meet someone in saying let's ride this thing out for three years and let's be business partners right because obviously I've been burned multiple times in that process so when it comes to partnerships proceed with caution do not partner out of insecurity definitely do not go into a 50/50 partnership because like I just said there's no such thing now this will lead to difficult conversations and there was there's been times where business partners I've talked to I was 50/50 partners where I said hey I'm working way harder than you I put the capital in this business to get this business off the ground you're obviously not as motivated or you know in this business that's okay just give me more equity like I'm fine to go 6040 6535 if we just readjust the equity I'm fine I don't have any problems here and I'll keep working just as hard and we can agree that you're gonna work not as hard and I'm gonna really kind of put this business on my back but obviously that conversation is way harder to have after the fact then before the fact so have that conversation before the fact set boundaries and you're responsible for this I'm responsible for this here the equity distributions that we're gonna do have an operating agreement that's one of the biggest mistakes I made is I went into business and I didn't have an operating agreement and then as a result of all those things I got really bitter and I felt burnt because I felt like someone was just trying to ride my coattails and my hard work to success so that's my advice on partnerships I hope that you found this helpful as always comment below let me know what you think I have a feeling that this is one of those videos it's probably going to stir the pot and people are gonna think that hey there is such thing as a 50/50 partnership and you might totally disagree with me if that's you that's fine too comment below let me know what you think in your rationale behind it and I'd love to hear from you and as always I'll see you in the next video see ya