Episode Transcript

Please note this transcript was generated by AI and contains errors including missing and misspelled words.

Meryl Intro:

Hello and welcome to the podcast. I'm your host, Meryl Johnston. The Lifestyle accountant show exists to help today's accounting firm owners build successful firms, while also living a healthy, happy life without sacrificing sleep. Your weekends or time with loved ones. Today I'm sharing a podcast episode I recorded a number of years ago.

It was the hardest podcast episode I've ever recorded, and the title is, breaking Up is Hard to Do. It was published on the Tropical MBA Podcast, a podcast where I'm a longtime listener. Been listening weekly for almost eight years. The episode was an interview between. Me and my original be Ns co-founder Ben McAdam, and we're sharing our thoughts on the process of splitting up our business partnership after 18 months of working together.

Ian: Dan. They broke up. They broke up. They broke up late last year, accountants Ben McAdam and Meryl Johnson called it quits on their business relationship, and I think that that's tough, but I also think what might even be tougher is coming on this podcast and talking about it. So yeah,

Dan: honestly, super cool of them.

You know, this is a common thing that happens in business, but it's not so common that people are willing to share honestly, how these things go down in real life. I mean, I don't think there's people, not many entrepreneurs listening to this that can't relate to a situation like this, so we appreciate them sharing

Ian: their story.

In this episode, I'm mostly going to let them talk about how and why it happened and how they've reached a mutual agreement to buy each other out. And do you mind if I do a little backstory

Dan: work here just to give some, not all of the listeners might know the whole backstory. Yep. So early in 2015 prompted by one of those, donate a business idea.

Episodes. Ben and Merrill set up the Bean ninjas in the course of a weekend, and now they both decided to keep parts of their own accountancy practices going on while they set this new venture, the bean ninjas up running and growing, which again is a productized service, like they were professionals that got paid for their hours, for their time.

They listened to the episode and they were like, we need to get into the product tie service game, and that's when they started offering. I. A more productized approach to bookkeeping services using zero accounting software.

Ian: Both Ben and Merrill live in Australia. Dan Ben is in Sydney with his wife and his young daughter, and Merrill, who is a keen surfer, lives on the Gold Coast for their initial meeting.

To get things started, Ben flew out to the Gold Coast to meet with Meryl, and the idea was that Ben and his family would actually move to the Gold Coast eventually. But as you'll hear that never quite happened. Although they did continue to work remotely using the usual meeting tools like Skype, Trello, slack, Google Docs, and when they first came on the pod,

Dan: this was April, 2016, and we're gonna link to that episode in the show notes if you want to catch that app.

They were doing pretty well. They had 10 employees, 50 clients with of 135 K of annual recurring revenue. So they were over the six figure mark when they first shared their story here on the T MBA pod. So things seemed on the surface to be going really well, but behind the scenes they were experiencing some, some strains and their working relationship, which is, I was so surprised to, honestly, I was surprised to hear about this, Ian, when I knew you were gonna be on an interview.

I knew you were gonna follow up with them. And then I. You came to me with

Ian: this, so let's let Meryl pick up the story here with Ben chiming in with his own perspective as the story unfolds.

Meryl: So I think we started to have some issues around the beginning of 2016, but they weren't major issues. But I think from my perspective, I'd never had a business partner before. And that relationship is different to managing an employee relationship and it's different to when your managing upwards to a manager.

Do you

Ian: remember what some of these issues were that started to bubble up?

Meryl: One was that we. Each had an equal share in the business, and we were also paid the same amount, but due to our other commitments, we weren't working equal hours in the business. So it didn't feel like the reward for effort was fair.

And so over time that feeling of things not being quite fair, bested

Ben: away. Well, I think the context around when it came up was I was working a lot and I was starting to get a bit burnt out from it. Cause I, I run a tax practice. So for me, the busy period on. What was paying my living expenses comes August to October, so I was working really hard on bending, just trying to capitalize on the growth at the same time as I was trying to do some tax returns to make sure I can pay my personal expenses.

And is

Ian: that because of the way that you guys were hiring or was that just kind of the nature of the business?

Ben: Parley was a few decisions we made. Merrill handled the marketing and my responsibility was sales, managing the business, doing our own internal accounts. So there was a lot that I put on my plate there.

And so actually just before D C B Care K in September, we hired was starting to put a manager in place for the bookkeeping team and we'd hired four bookkeepers with the hope that at least two of them would be good enough to. Hang on to, and so I was training five people and then we went off to a conference overseas for a week and we were also expanding into the uk and, and, and it's just a lot of the reason for the heavy workload was my fault, putting too much onto my plate and not saying no, or setting up a waiting list for clients.

So my

Meryl: business was a consulting business, M C J Consulting, which was never a big business. It was just a way for me to, that was my transition out of my full-time role. So my intention was never to grow that into a big business, but it was a good way of generating income without having to work too many hours, because consulting rates are quite good, but it was a difficult business to scale because the projects were quite different.

Whereas I think we both thought we'd be ninjas. We had stripped away a lot of the services that we offered in our other accounting firms, and were focusing only on bookkeeping. The idea from the beginning was that we built, built systems and that it was. Built to scale. When we first started in the business, Ben and I had very similar skillsets and we didn't really have defined roles.

Over time, we created two different roles. So Ben was looking after the operational side of the business and I was looking after marketing and business development, and I was really pushing for us to grow quickly. So that we could completely step away from our other businesses and focus 100% on Bean Ninjas.

So I was putting a lot of time into marketing and business development and, and trying to bring new clients on, but we probably didn't have the right systems to take on that. That that many new clients, so in around October, 2016, we were missing some of our delivery times with with clients. So we started to have a couple of unhappy clients.

So in October, 2016, I came back to help Ben with the operational side of the business and stepped in. To work with the Australian team and Australian clients, and Ben was managing the international side, and that's when we started to realize that we had a different vision around the growth for the business and also how we wanted to be developing these processes and running the team.

So,

Ian: Sounds like maybe you were putting in more time to the business than Ben was because he was continuing to work with his existing clients. And so how did that feel at the time for you? Yeah, and

Meryl: Initially I didn't mind because I knew that he was still contributing to Bean Ninjas. We were growing quickly.

It was exciting. So I didn't really mind. But then over time, so I'd been gradually scaling back my consulting business, so I wasn't taking on any new work. So that I could focus on be ninjas, but what that meant was that my income was also dropping. So I really wanted be Ns to grow faster so that it could pay me, but also pay Ben more as our founder's wage.

So over time I started to feel some resentment about the fact that we were putting in different levels of effort or different hours, week and week out. And I think that highlights something that it's really important to separate ownership from your role in the business. And if I was ever to be in a situation again with a business partner, I think that we would have separate agreements which relate to the role in the business and, and if someone is doing a higher level role or a more hands-on role or something that requires more hours, then they'd be paid for that role.

And then ownership and share of profits would be completely separate. There's a quality

Ben: of life aspect there that's important to me. I mean, I have a, a wife and my daughter's now three. I'm not planning on having any other kids, so any moment that I'm working rather than spending time with my daughter is a moment.

I'm never ever gonna get back again. I think sometimes when we're working together, I felt a bit jealous occasionally because Meryl had a lot more time to put in than I did. I. I mean, you know, I And that's just because you have a family? Because I have a family, yeah. Not that I resented my family, but it definitely made me feel like less of a entrepreneur next to her sometimes just because of the pure quantity of hours she had

Ian: available.

Now, did Merl ever express any kind of resentment because you didn't have the kinds of hours that she had to put into the business, or did that ever come out in your relationship?

Ben: It did a bit, yeah. Around, when was it? June. She wound up two thirds of her consulting clients and only had the one left. And I was just getting ready for tax season, which you know, would be less hours for me at the time when she suddenly having more hours available for bean ninjas.

I think there was definitely an issue around June, July, August a little bit. I mean, for the first 12 months we'd been putting in similar hours and we were both happy with that. And then, It was that point. I think our trajectory really started going in different directions as being ninjas grew. I think that gave Meryl confidence to wind down her consulting practice.

I'm not saying that people have to be identical and on the identical trajectory for a business partnership to work, but when these differences come up, then either you need to change the way you're doing things or. Terminate the partnership. So why

Ian: didn't you wind down your business at the same time?

She was winding down. Her business

Ben: being ninjas wasn't pulling out enough money. I wasn't willing to draw down quite so much on savings, whereas Meryl was, I think maybe if we had been in the same office together, that would've kept us more on the same path, like some of her confidence would've rubbed off on me.

Ian: Interesting. So you, you actually attribute it to physical presence, like you guys weren't in tune enough, but you felt like because there maybe wasn't a physical presence with each other, that you couldn't understand her confidence in

Ben: the business. It may not necessarily be the physical presence itself, but more that a lot of the things that move a relationship forward or keep people on the same page are the random.

Trivial moments, the spontaneous things that come up when you're just around people a lot. That's when the spontaneity happens as, as well as the, the little quirks and the, the funny stories you tell other people about your relationship that bond you together. And so I think physical presence would've facilitated that a bit more.

Ian: When we first started talking, you said you almost moved to where Merrill was living. Why didn't you end up moving if you, if you believe this or do you see it now and you didn't see it then?

Ben: Yeah, part of the reason why the move didn't go ahead and like, if I'd have moved up there, it would've actually been cheaper.

Sydney's quite expensive. It would've been cheaper and it was with the beach and a nice climate and you know, it would've been, would've been a great place to live. But I think part of the resistance was that, I felt like I had put a lot into the business and taken a bit away from my family. You know, my wife and my daughter would have to reestablish relationships and, you know, find a new preschool for my daughter and we'd be away from family, the extended family.

So it was a big deal, and I had some resistance to putting more into the business by, by doing that.

Ian: What was the first conversation when you guys came to the table and you said, this clearly isn't working out.

Meryl: After I'd come into the operational role, I felt like we needed to make some changes in the business, but it was. Difficult to do that because we were both doing a pretty similar role in the business.

So the Australian client base was bigger than our international client base. So it got to a point where I thought, well, hang on, I think I could run this myself, and thought, well, what would it look like? How would I feel if I was to run the whole venues operations and also handle the marketing? And I think over time I've been feeling stressed out about having these conversations.

With Ben or not having them. So eventually we got on a Skype call and I probably for one of the first times, I was really honest with Ben about how I was feeling in the business and that I felt like one of us needed to take control and become the the sole owner.

Ian: How did you get Ben to get on this Skype call with you?

Meryl: In our calendar, we always had two Skype calls a week just to check in and see how we were both going. It would've been one of those Skype

Ian: calls. I'm just, uh, imagining I've had these conversations, these difficult conversations before, and you get an email and the subject line is, we need to talk. And you're just like, oh God, why do I have to wait till next week?

Can't we just talk right now? Yeah.

Meryl: So it wasn't like that. It was just in one of, I guess I hijacked one of the scheduled calls. And so

Ian: do you think Ben was blindsided by this? I think

Meryl: he would've been surprised. So for a period of months before I had flagged that I was unhappy with how things were going.

So around this time we started to have a couple of unhappy clients and there were deadlines not being met, but I don't think he knew the extent of how I was feeling. And then I was feeling like one of us needed to jump in and take over Bean Ninjas. And when I had the conversation with him, I was open to, so I.

I think we both loved Bean Ninjas and, and what we had created, so I was open to him taking over and running it and me doing something else, or I was also open to me taking over and him doing something else.

Ian: What did you really want to happen though?

Meryl: Well, I, I really wanted to run it. I had all these ideas and things that I wanted to implement that I was feeling restricted, that I wasn't able to.

But Ben was an equal partner and he, I knew that he also really cared about the business and was proud of what we had achieved. So if he, if it was something that he really wanted to do, I also felt like I had other business ideas and other options that I could run with too.

Ben: Meryl brought it up. I mean, I, I was unhappy, but I kept thinking it was like a temporary situation.

Like, you know, once the staff, we've got it trained up, then that'll take a lot of work off my plate and then, and then, you know, there's always a reason that it will be better in just a little while. But Meryl's the one that brought it up and said that one of us needs to buy the other one out because the partnership as it is isn't working.

Ian: And what was your feeling when she said that to you?  

Ben: I was a bit a bit relieved because thank goodness it was out in the open. It wasn't working for me either. But on the other hand, I mean, there was a tiny bit of resentment that she wasn't willing to work through things, you know, long-term relationships of any sort.

We'll come to crisis points or, you know, there'll be some big problem that comes up. And usually the relationships that survive are the ones that change and grow at that point. And it, it's a big deal for me because, you know, being a good husband to my wife is, is, is always been a huge deal. And so there was a little bit of resentment that Merrill wasn't willing to stick it out and put in the hard work.

It could have been a good opportunity for us to build our skills as, as. At being a business partner, not necessarily for the benefit of this relationship, but you know, if we want to have other businesses in future with other business partners, then you know, this was an opportunity to, to build our being a partner skill.

Ian: So, Over the next few months, Ben and Meryl went back and forth speaking with each other to figure out if there was a way to continue the work they were doing together at Be Ninjas.

Meryl: This was a process. It wasn't overnight. Let's break up. So, the initial focal, I just told Ben how I was feeling and that I think we should consider one of us buying the other out. And it was over a period of time that we then worked through these issues and thought about whether they could be resolved.

And that was where I thought that we had a difference in vision and in how quickly we wanted to grow the business. In my head, I think I felt like I, I did wanna run things and I felt restricted in the way that that things were going. But I also didn't wanna dive into anything. So if I feel like I've made a wrong decision, I'm open to being persuaded about that.

And I think that's the way Ben, and I'd always run the business, test something, learn from it, and then adapt. So I was open to hearing Ben's perspective as well before we made a final decision. Take

Ian: me to the conversation where you guys decided to have the breakup.

Meryl: We did have a co-founder agreement where we had.

Put some thought into what would happen if one of us was to lead the business or, or if we had other investors buy in,

Ian: and this was something that you guys drafted before you even thought about breaking up. This was part of the process of forming your company, right?

Meryl: Yes. Exactly, so that was actually something that we did before we had that week together on the Gold Coast.

That was really important. Drafting the founder agreement and trying to think of some of the scenarios. I think it's really key to have those discussions before we even go into the business, and that was something that helped us when we were having these conversations around what would this exit look like?

So I felt like it was. It made more sense for me to acquire Bean Ninjas than it did for Ben too. So I had some resources, some capital behind me where I could buy him out and also invest some money into the business. He still had his tax practice and I think Bean Ninjas was also restricting him, so he, he had a young daughter, he wanted to travel and productizing bookkeeping business is a difficult thing to do and we still had a lot of hard work ahead of us.

To systemize a lot of different aspects of our business. So to achieve that we, we had a list a year of hard work still ahead of us. And at the point or the stage of life that he was in, I dunno that that was the right fit in terms of him wanting to travel and spend time with his family. And also he had another business where he could still generate a good level of income.

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Ben: possibly could have stayed on in being ninja's, you know, maybe take on a lower level management position, but I think that would've been a bit messy a situation given that I was used to being the boss and some of the team were used to reporting to me and it could get a bit tangled. So we just decided to clean split of the partnership between us was the best option.

And then it's not so much me. Giving up Bean Ninjas just to go to tax as tax is what I'm still doing. And so I'll put a bit more energy back into it. Cause I do like helping people, particularly online businesses with their tax. And

Ian: so what is it about your tax business that feels better in terms of being able to maybe support your family?

Ben: I think the work, it's a lot simpler. Somebody made the point in a blog post recently that they've seen a lot of ex-business owners go into consulting. And partly it's, you know, it's probably a burnout or a shell shocked type response of, you know, it's just me. I'm gonna do the work, get a decent hourly rate for it, and then.

Switch my brain off at the end of the day. I also like with the tax practice, I mean, most of the clients come to me saying their tax accountant has no idea about how online business works. So it's good to feel like I'm filling a need there and it's, yeah, just simpler without a team. Though I am looking at hiring for my tax practice cuz it's starting to grow.

Now I'm putting more energy back into it.

Ian: We haven't talked yet at all about what role your family played in this breakup, and at the time you started to think about the breakup. I can only assume you probably told your wife before you told most people.

Ben: Yeah, absolutely. I keep her up to date about whatever I'm doing in the business, and she doesn't really come from an entrepreneurial background, so having a bit of a.

Finger on the pulse of what's going on with the business and where I think it's heading and how it's going. That's, you know, it's an important thing for me to provide for her. When I told her that, you know, after the first conversation with Meryl where she said, I think one of us should buy the other one out, my wife was really keen for Meryl to be the one doing the buying out.

How did she say

Ian: that to

Ben: you? It wasn't quite no way in hell are we putting more money into this business. It was definitely like, For her. She's seen a lot of the pressure I was under and a lot of the stress and a lot of the hours I was putting in and the effect that was having on my daughter who missed me.

And so it was a bit of a no-brainer for my wife that Meryl would be the one buying me out. Was

Ian: there any particular conversation that you can remember with your wife through the negotiations that was galvanizing for you?

Ben: I think she was the first one to think of what I could do next. I think it was the first thing she thought is, you know, hooray, the stress will go away.

But also, wow, imagine all the things we could do, like travel. We're actually going to Europe for at least a few months in the middle of this year. I'm hoping to meet up with a few DCers wherever I go. Awesome. Yeah, so that's exciting and that's, that's something that I wanted to do. We'd actually booked flights and then we found out, my wife was pregnant with, with my daughter four years ago.

So I've been holding onto this travel dream for years. And so that was really the first thing she mentioned. She said, wow, you know, we'll be able to do that Europe trip that you had in mind. You know, our daughter's getting to the right age and, and then here we go, we've got this safety cushion in case we've budgeted wrong or need to get home in a hurry.

So I think, yeah, she was the first one to think about the future benefits of it.

Ian: So it might be obvious, but a future benefit to Ben would be the money. But how would that play out for Meryl? Not so easy. Maybe how would they figure out a fair compensation, but before they could get there, how would they work together to figure out how they could both be happy?

Ben:

The first call was about discussing all the things we'd need to talk about and a potential timeline because you know, if Meryl's buying me out, then she needs to source the funds. And when do we tell the staff, when do we publicly announce it? We drafted the buyout contract in a Google Doc together. We didn't get lawyers involved, partly because we got a little bit of legal training and reading contracts a lot from our training as accountants.

But partly just because we, we didn't really want the cost. We weren't at the point where we needed lawyers to fight for us at that point, you know, we were cutting it off, stopping the, the partnership before it got to that point.

Ian: And what was that moment like for you? What did you think?

Ben: I think it was hard.

We'd been working on this for so long and it was having great success and I enjoyed working with the team and the type of clients that were coming through were my people online businesses, so it was hard thinking of saying goodbye to that. I would have swings between being extremely excited about what I could do next and taking some value out for all the work I put in over the 18 months and having some of that.

Capital available to launch whatever I'm gonna do next, or maybe some angel investing or, or whatever I was interested in. So I'd swing between the excitement about the future and I'd still get flashes of resentment and like the negative feelings that led to the partnership split. It makes me sound completely unstable, but I think it's, it's useful for people to expect that sort of thing if their partnership is going to split up.

Ian: Tell me a little bit about resentment, cuz that's the first time I've heard you say that word. What were you resentful about?

Ben: I think Dan Norris recently sold WP Curve and so he's been talking about the why behind that. And one of the things he mentioned was a problem for him was that his business partner was in a completely other country and they didn't have much.

Contact on an ongoing basis, and I think Meryl and I suffered from that as well. I think being around each other a lot more would've kept us more on the same page. We sort of filled in the blanks with who we hoped the other person would be, like a clone of ourselves. And so every now and then, one or the other of us would get quite annoyed that the other person.

Didn't do something the way they would have a lot of it, like, you know, many negative emotions is totally unfair. And there's usually some underlying reason behind them. Like for example, my workload was heavy because I couldn't say no and I kept putting too much on my plate. But still those negative emotions can still flare up.

And you know, Meryl and I have talked about this. It happened a little bit for both of us. Actually, the negotiation process was pretty good. I've been in worse negotiation situations, not personally, but as a financial advisor. So this one seemed quite mild. I mean, there were a couple of points where we agreed on something and then one or the other of us thought about it and then came back and said, well, no, actually I'm not happy with that point.

So it wasn't completely smooth sailing, but it was very civil and we were both. Negotiable. I mean, towards the end of the process, it was getting close to the date we'd set for the money transfer, and I'm like starting to get a bit excited about what I could do with that money and also getting really nervous that it wouldn't actually happen.

That, you know, that'd be. A meteorite strike, you know, all sorts of ridiculous catastrophes start going through my head about, you know, it's not actually gonna happen. You were talking about that actually, about the handover payments for your business sale. And I got a little bit of that too, and Merrill and I were both in the same room on the computer watching her type in my bank details and quadrupled, checking those before we hit the send button.

So there was a bit of nervousness in that final stage.

Meryl: Ben and I went through quite a process of working out well, what would a transition plan look like? How can we guarantee that he can still work after be ns? So what kind of non-compete clause would we need? And thinking of a whole range of things. I was feeling excited on the one hand that I could implement some of these things that I'd been, the changes that I'd been wanting to make, but also I was sad as well.

So Ben and I had met before Ben Ninjas and had a great relationship, and I had enjoyed working with him too. So it was sad at the same time when

Ian: Ben knew that that money was coming to him and the opportunities that that was gonna afford him and his family. He said that he was very excited.

Meryl: Yes, and I could sense that too.

And I wanted the best for Ben so I could, I could sense that he was, once he'd got over the disappointment that it hadn't worked out with Bean Ninjas was actually an exciting opportunity for him too.

Ian: Another thing that he mentioned was he was also upset, you know, that it didn't work out with you guys in terms of your partnership, but you know, there was a big sense of relief for Ben as well.

Did you also feel a sense of relief?

Meryl: I did feel that and I, I did feel like he was under a lot of different pressures, so I was putting pressure on him to put more time into Bean Ninjas. He was managing operations, so there was pressure from clients that his tax clients, his family, and knowing that he didn't have to continue with Bean Ninjas released some of that pressure and meant that he, he had more time to, to devote to less things.

Ian: One of the things we talk about on this show a fair amount in terms of making it work with co-founders and business partners is life trajectory and making sure that your goals and your trajectory are aligned not only in your business but in your life as well. And it seems like you and Ben had a little bit of a different life trajectory.

I don't wanna say that that was the only reason that you guys broke up, because it seems like you guys had different ideas about how the business should be run as well. But how do you think that that life trajectory played into the split? I actually

Meryl: think it was a big factor. Because I was pushing for growth, knowing that I might wanna have kids in a couple of years time, whereas Ben already had kids and wanted to be available for his family.

So I was definitely wanting to grow the business faster and that meant a whole lot of things about wanting to put money into the business to grow, wanting to do more with marketing. And so if I had been. In Ben's position, then I mightn't have wanted to grow at that same rate. So I think that's a really valid point.

And I'd say that was one of the differences with our differences in vision for the business too, was related to where we were at sort of stage of life that we were at. And

Ian: so one of the considerations that Ben didn't have to make, but you had to make, was how to make sure that the staff and the business stays healthy after the split.

And so what are the things that you had to consider during that process? So

Meryl: it's a big change for the staff and for clients too, because it had always been Ben and Meryl running the business, and Ben had been managing a lot of the staff for most of the, the time we were operating too. So he had strong relationships with them.

So Ben and I spent, and he was really good about this. We spent a lot of time working out a transition plan, and he stayed on as a contractor for three months. To help transition things, clients knowledge, certain things that he had set up in the business with me. And then we also spent time thinking about how to communicate it with staff.

So Ben actually flew up to the Gold Coast again so we could announce it to the team. We created a video so that our international staff. Would hear the message at the same time. And then we also had a staff lunch for everyone that lived near the Gold Coast, so we could explain and show that we were still on good terms and that it was a good thing for both of us as well as the business and that Ben would still be around for the next three months.

Ian: Was there any fallout in the business?

Meryl: There was some key staff that had really strong relationships with Ben, and so that definitely took some time for me to build those same relationships. And my management style's quite different to Ben's, so that also took some adjustment for the staff as well, or them learning about my management style and me trying to adapt.

So it wasn't such a big shock for them. So we reduced some of our casual staff, but all of our key staff are still with the business. But that probably relates to in the last podcast I did with you. You talked about a productized service, and by the nature of being a service business, you'll become a hiring machine.

And so we probably, during our growth phase, had over hired and then had a lot of casual staff working only 10 hours or less a week. So there was a big admin commitment in managing and training those staff. So that was actually one of the changes I made in the business, was to reduce the number of staff that we have, but have staff working closer to full-time hours and there's less people.

So, To train across different zero add-ons or whatever it might be.

Ian: So when we sold our business and I had that talk with everybody, that I wasn't gonna be continuing with the company, I was mortified that I expected maybe some people just walked out that day. It was just frightening. But it turned out to be okay.

I mean, everybody kind of anticipated it and everybody understood where I was coming from and everybody was very supportive. What were some of the responses that you got?

Meryl: I think people were really surprised because Ben and I had always been careful. Not to share any of of the issues that we had had with the rest of the team.

So we always wanted to present a united front and back each other up on anything. So I think the team were really surprised to start with, and then they were sad because they really enjoyed working with Ben and then down the track, I think. They could see some of the changes that were being implemented, which helped release pressure on their workloads, and I think then they might have appreciated some of those changes, but also still missed the regular contact that they were having with Ben.

Ian: Is there a version of Bean Ninjas that would've worked out as you as a co-founder and someone else as the co-founder? Or do you see yourself as a solo entrepreneur at this point? That's a good

Meryl: question and and I'm not too sure. So I know that Bean Ninjas wouldn't be where it is now without Ben, so I don't think it's something that I could have started myself.

And our skillsets were complimentary. When we first launched the business, it was just as the business grew, that we started to need different skill sets in terms of what the future holds. And another founder, for now, it's Meryl as the the solo founder. Would

Ian: you even pair up again?

Meryl: I would, so, so now that I've been running things myself, I can see I've seen both sides.

I can see the advantages and the disadvantages of having a partner and to launch a business that's scalable. I think it is easier to do it with a partner. I. But it's important. I've learned a lot and some of the mistakes that I've made along the way, Ben, about things that I could do differently next time.

So I think it's definitely easier to make decisions and to have a clear vision when there's one person in charge. But there's also a lot of benefits in having a partner and someone to bounce ideas off and someone to share that load with and someone that has a different perspective. I can see that there's pros and cons.

Ben: I haven't been burnt out. There were a lot of pros to having a business partner, just having somebody that was also putting in that amount of work and thinking about the business as much as you. I think that. Having that company and shouldering the weight of responsibility, I think is really valuable. I definitely wouldn't say to people, never have a business partner.

I would probably just say, I mean, choosing wisely at the beginning is a good part of it, and I think Meryl and I did choose pretty wisely. And then just maintaining the relationship over the long haul I think is. The bigger challenge. I did spend quite a bit of time during the handover period and, and even during part of the discussing the split, I spent time thinking all those what if scenarios, you know, what could we have done differently that would've made this thing work?

None of it was particularly productive. I've heard a lot of people go through that stage as well, but in the end, I think it was definitely for the best. I mean, Merrill and I still have it. A good relationship now and I think partly that's cuz we pulled the cord a bit earlier rather than it becoming one of those horror stories that hear about business splits.

Actually, I

Meryl: was really proud of the way that Ben and I were able to work through it. And, and maybe that's our accountant brains where we can use logic and not get too emotional about things. Because I can see from Ben's perspective that it would've been emotional hearing me say that I, I wanted to buy him out and he was able to put a motion aside and for us to work together to come up with an agreement that.

Was fair for him and also fair for me. And we didn't need to involve lawyers or anything like that. So I'm proud that we were able to do that together.

Ian: So catch us up to what Bean Ninjas is up to today. How has the business changed?

Meryl: The buyout happened in December, 2016, and since then my focus has been on our processes and our systems and our team rather than growth.

So we still have had growth. But my main focus has been around systemizing everything, documenting it. And I've actually been in, in doing bookkeeping again with the team just to understand exactly how we are doing things, where can we improve things. And I think one of the challenges that we faced was that we were building a productized service, which is supposed to have a defined product offering, but people have perceptions about what the keepers do and don't do.

So we had the scope of the work that we were doing for a range of clients was outside of. The original productized service. And so that's something that I've been wanting to come back to. Well, what's our core service offering? What are we offering these fixed fee packages? Let's stick to that and come up with processes that mean we can deliver that really well.

Ian: What does it feel like to be 100% in control of the ship now?

Meryl: It feels good. It's a little scary at the same time because it's just me and I don't have someone to bounce ideas off and there's not someone to share the load. But it is exciting too. I've had a lot of ideas and things that I wanted to implement.

It's also meant that some of the staff have had the opportunity to step up and come into more management roles and help with things like creating processes. So I think it's been exciting for some of them too.

Ian: And so emotionally, would you say like you're in a better spot than you were last year? Um,

Meryl: I think so, so I think it had been a, just a, a stress for me about the partnership relationship during 2016.

It, it was also difficult working through the buyout agreement. That was definitely, it was a big deal for us and a lot of money for both Ben and I. So that was definitely stressful as well. After that happened, then it was a very busy period in the business where I was doing both Ben's role and mine while he was still there supporting me as a contractor.

And I feel like we've been through that busy period and, and now I've come out the other side.

Wow, that was a heavy episode to go back and listen to, and even so many years later, it still brings up a lot of emotions. I am proud of the way Ben and I navigated through that difficult patch. Agreed on buyout terms and managed the transition. And I have some additional reflections now that a number of years have passed.

I'll start. With some of the deal terms and the transition. Um, so in hindsight, I made a mistake in how I structured the buyout. I paid mostly cash upfront instead of paying an installments or trying to negotiate something like vendor financing, where the seller would almost in effect loan you some of the money.

Um, and so it was a significant, for me at the time, that was a significant amount of money and. There was risk associated with, with that the business was only 18 months old. So I'm glad I did it. I'm glad I took that risk, but in hindsight, I would've structured things differently and try and have, have spread those payments out over 12 months or even longer at least.

So that, I think that was a mistake, and we did include a claw back to capture. Uh, clients that left, I think it was something like a three or four month period. And, and so that, that helped in reducing a little bit of the purchase price, considering that I was paying mostly cash upfront with the final installment, uh, after that clawback period.

I don't know if that was actually the best way to capture it, to capture the value of a fast growing accounting firm. We, we knew that selling client fees, was often done on a multiple of annual revenue, but I don't know if that's the best way to value an accounting firm, a fast growing accounting firm where I was buying more than the, the fees I was buying the brand, the team, the systems.

But the business was only 18 months old, so a lot of that was in progress as well. So we did the, the, the best we did at the time. And I think what's important is that both Ben and I, felt like it, it was fair. Uh, I felt like maybe I paid a little bit too much. He, he might have thought I paid, um, a little bit too little.

But I think generally both of us were happy with the outcome. I am happy that that Ben and I were able to ma maintain a good relationship through that transition, and he stayed on as a contractor to help me after the buyout for a number of months, and that was really helpful and I'm still appreciative of that because it would've been hard in the early stages of a business like that where a lot of things were in flux to take to shoulder the responsibility.

I have two co-founders and so I'm appreciative of that, of that, and that really helped. I've also had a number of years to think about. Why the business partnership didn't work, and I think it was driven by a few main factors. So I think the first was that we were in different stages of life. Ben had a family, and I can't remember if he had a mortgage or not, but he definitely had more financial responsibilities and more responsibilities.

With his time as well. And so the different stages of life resulted in different desires as to what we could reinvest back in the business compared to what cash we could take out and also how much time we had available to work in the business. And I looked back and I worked long hours, weekends, late nights in the first couple of years of being interest.

And now with a couple of young kids, there's just no way I could do that. But I probably, I. Didn't have a lot of empathy, didn't have a lot of empathy for Ben around that and, and what it was like, uh, trying to be a good parent and partner as well. Compensation was another issue and I. It didn't feel fair because we were putting in different hours, but we were compensated equally, and we could have addressed that without splitting up the partnership.

Um, and that could have been addressed through wages based on the number of days worked or something like that. We also didn't have enough clarity around our roles and who could make decisions over what. And in hindsight, I may not have appreciated how much work was involved in managing the client delivery part of a service business like bookkeeping and accounting.

And, and that was the area that Ben was involved in. And so potentially more things should have come off his, his plate, if he was. Looking after that. And my last reflection, and, and this is something that I've tried to improve with ongoing and new business partnerships, is that they're like a marriage.

They require ongoing care and nurturing and effort. And that's something I've been a lot more aware of. So after the business breakup with Ben, I had a break from business partners for a while. Uh, I've since dived back in and I have multiple business partners now, and I, I'm really happy with, with how they're going.

There's definitely ups and downs and sometimes there's tension, but I, overall, I, I'm glad that I jumped back on the horse and, and decided to have business business partners again. I'm gonna be sharing some stories and some insights about some of these different partnerships down the track on the podcast.

Also look out for some upcoming episodes with other accounting and bookkeeping firm owners covering topics like giving equity to team members and lessons learned from acquiring other firms.