The One Problem Interview: Melanie Russell Talks About Partnership Agreements

My name is Avil Beckford, and this is The One Problem interview, I started this because it's near and dear to my heart. I interview my guests and they present one problem, just one. We know there are thousands, millions of problems in the world, but we're going to focus on just one. So she's going to talk about her problem and present a solution. And this is for all of us to learn. Now, my special guest today is Melanie Russell.

I met Melanie about 20 years ago, actually, and I think it was at a CAWEE event, Canadian Association of Women Executives and Entrepreneurs. She is the founder of Kalex Valuations. Melanie, I turn it over to you now.

Melanie Russell

Thanks, Avil. And thanks for having me on. And by the way, I hate to tell you, I think it was way more than 20 years, because it was before I had children. So, I won't even tell you how old my kids are, but it had to be at least twenty-five years ago. So, thanks for having me on. As I said one of the problems, I'm not going to say it's my problem, but I dealt with this personally, but also on behalf of clients.

And so, the one with the problem I wanted to talk about is getting into business with someone else or getting into a partnership or anything with someone. And there it's kind of like having a friend that you decide to go and become roommates, or you decide to go on a trip together. You don't really know that person until you've lived with them, until you've been in business with them, until you traveled with them. And you also can't predict all of the things that are going to happen during the course of being a partner with someone or running a business with someone.

The One Problem Interview With Melanie Russell

So, the easy way to deal with issues is to have some kind of even an informal agreement, shareholder's agreement, partnership agreement, whatever, even if it's a memo to file where you lay out what the strategies are, what your objectives are, how to deal with the issues as they come up If the company needs money, if someone dies, if someone wants to just leave the business, how do you deal with all these issues?

Melanie Russell

So, a very simple way to deal with things and a lot of people are scared is almost like getting into a marriage, starting a business with someone, you don't want to bring up the idea of a shareholder's agreement because you assume everything is going to run perfectly and you'll never have a dispute or there will never be any problems, but there always are. And the amount of time and cost and angst involved in dealing with things when they go wrong, that could be easily overcome by simply having an informal agreement. It's really worthwhile.

And even if you don't get a lawyer involved, some people are scared to get an agreement together because they think it'll cost them tens of thousands of dollars. And they certainly can be expensive. But depending on the business, you may want to go with a simple memo to file that you both set out the basic structure of your go for an agreement and how to deal with problems or issues as they arise.

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Melanie Russell

So I turn it over to you.

Avil Beckford

OK, so that was a short interview, so let's see, is there anything else you could add?

Melanie Russell

Yeah, well, I'll expand a little, but you say one problem. But I see these as sort of similar problems, kind of like getting married and stepping into to a partnership with someone or living common law, same ideas, getting into business with someone, have an agreement, have something set out. And, you know, there are more emotions involved with getting together. If you want to call a marriage contract or co-hab agreement, whatever you want to call it, and it takes arguably it may take some romance out of things, but with people getting married later and, and possibly bringing in different levels of wealth to  the partnership, it's not a bad idea to just set that out the terms and, and just get on the same page.

And again, if, if things go wrong and a lot of relationships do go bad, at least have some kind of document that may help you get over a bad situation, easier and more cost effective as well. So that's what I would add.

Avil Beckford

Yeah. So I actually see how these two are very much related because they're all about formalizing something, some sort of collaboration, partnerships, because when you are getting into a relationship with someone, it's also a partnership. These two go hand in hand.  Yeah, the same kind of solution you can use for both of them.

Melanie Russell

Right.

Avil Beckford

So that that sounds really good. So thank you so much, Melanie.

Melanie Russell

Avil, thank you for having me.

Forming a Successful Business PartnershipThe Art of Strategic PartneringBusiness Partnership Essentials

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