A key vision of Mark Olson and Brian Shaurette, two of the five partners in Legacy Custom Building & Remodeling, Scottsdale, Ariz., is to grow revenues to $20 million, from $8.6 million in 2005. Both are strong adherents of metrics and accountability, thanks to their previous executive positions in multifamily development and new-home sales, respectively. “We come from backgrounds of running and gunning very hard,” says Shaurette, senior vice president and general manager. “We want a strong, stellar organization — but we also want balance.” He says that his and Olson’s shared “spiritual base” helps them achieve that balance.
Neither he nor Scofield is “the slightest bit religious,” Baker says. But both men “absolutely believe in the statement, ‘Do unto others.’” And that is how they have always worked with everyone, including employees, clients, suppliers, and trade contractors of the $1.7 million company.
A similarly informal vision guides Silver Bullet, which has revenues of around $2 million most years. “So many partnerships break up because of philosophical differences,” Streich says. “Gary and I are just very compatible that way. We have a similar vision of where the company should be now and where we want it to go.”
Define the Ground Rules The “ground rules,” Gale says, delineate how you’ll work together and tackle the various issues that will inevitably arise. Different from a partnership agreement (see “The Partnership Agreement,” page 126), your rules might cover:
- How and when you’ll communicate with one another, and what you’ll communicate about.
- What should be confidential between the partners, what should be shared with managers, and what should be communicated to all employees.
- How you’ll address problems with employee performance, including one another’s.
- How you will make decisions; which decisions you’ll make jointly and which independently.
- How you will measure and track business results.
Put your rules in writing, but don’t be daunted by the idea of a dense agreement, Gale says. “They can be as simple as a one-page summary of what you’ve agreed to,” or even a letter you write to one another.
Also, because partnerships are fluid and change course as new opportunities and challenges arise, “Don’t set your rules in stone,” Gale advises. “Come back and revisit them over time.”
Play to Your Strengths The principals of many successful partnerships have complementary skill sets, and divide their responsibilities accordingly. (See “The Common Cause” on page 120 about Construct Associates’ unusual exception.) This approach is fine but is not essential, Gale says, pointing out that what really matters is that all partners have an awareness of the skills they possess individually and collectively, and what they need to go out and get.
In the early days of Silver Bullet, whoever took the phone call got the project, Streich says. By the time he discovered that he was allergic to dust and could no longer do carpentry, he knew he had an affinity for sales and project development. Welton, who took a lot of math in college, oversaw finances and production. The two still oversee these general areas of the business today.
“I think you need an owner for each major function of the company,” says Olson, Legacy’s president. Though he had been a corporate CFO, Olson had not worked in remodeling when he joined Legacy in 2001 and bought it the next year. “I felt that if I had the key salesperson and head of production as owners as well, I would be a little more comfortable assuming the risks [of ownership].” He offered partnerships to those two employees and hired Shaurette to manage sales and day-to-day operations, freeing himself to oversee broader financial and legal affairs.
Olson also sees advantages to having owners of different ages. Shaurette is 44, and Olson is 56 and spends half the year telecommuting from his Colorado ranch. The two and their other partners, whose roles are more limited, “all have different goals, and we allow each other the freedom to pursue life as it’s most important to us.”