The Private Practice Success Podcast

80. Before You Go Into Business With a Team Member, Listen to This

• Gerda Muller • Episode 80

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In Episode 80, Gerda answers the intriguing question often faced by practice owners, being:  Should I go into business with a team member?

It’s a situation that can feel like a natural next step. You have someone incredible on your team, someone you trust, someone who just gets it, someone who understands your vision… and, suddenly you find yourself thinking…

“Could we build something bigger, together?”

And while that idea can be incredibly exciting (because who wouldn’t love having someone by their side who shares the journey?), moving from team member to business partner is a much bigger decision than simply having a great working relationship.

In this episode, Gerda shares her own experiences with business partnerships and explores what practice owners should think about before taking this significant step. She discusses why the transition from team member to business partner requires careful consideration, and the questions you need to ask yourself before moving forward.

In this episode, you will learn (among others):

  • Why an exceptional team member doesn’t automatically make an exceptional business partner.
  • The 3 proven essentials to look for before partnering with a team member
  • The key questions to ask yourself (and them) before you even consider a joint venture

Who this episode is for:
✔️ Practice owners who are considering bringing a team member into the business.
✔️ Leaders who are exploring partnerships or joint ventures.
✔️ Business owners who want to make thoughtful decisions about the future of their practice.

Tune in for an honest and practical conversation about the realities of going into business with someone on your team, and the things you need to think through before taking that next step.

Here to help you build a practice you can’t stop smiling about 😍


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Here to help you build a practice you can't stop smiling about :)

Connect with Private Practice Success & Gerda here:

 Well, hello there, awesome private practice owner. My name is Gerda Muller, and you are listening to the Private Practice Success Podcast, and this is episode number 80. 

Today's episode actually comes from a question that somebody recently asked in the Facebook group called Private Practice Success for Allied Health Practice Owners. And by the way, if you're not there, and you are a solo or group practice owner, be sure to send in a join request and come and join the conversation there, because as you can see from today's topic, we do have a lot of interesting conversations in there. 

One of our members asked me this question, and it said, "Gerda, I know you've done joint ventures with team members previously. Can you share some tips or recommendations for others who are considering doing the same?" And she followed that up with, "Hint, hint, I would love a podcast episode on this." So I am obliging, and I'm going to share with you some of my thoughts on this really interesting question. So if you have been considering going into business with a team member, you need to listen to this. And I would recommend you get some pen and paper out because I'm going to share with you a lot of questions and reflection points that you would need to work through because just like a marriage, this is not straightforward. And I will say that I'm not going to go into the legalities here because I'm not a lawyer. I'm just a business owner and a human that's done this previously, and done this successfully, I will add.  So the wording this person used was a joint venture. Now you've got joint ventures and you've got partnerships. Like my experience, for example, was a three-way partnership. So again, I'm not going to go into the legalities, but irrespective of how you set it up, the points I'm going to share with you today apply. 

I want to start by saying that just because there is somebody in your team who is exceptional at what they do, doesn't mean they're going to make a good business partner or joint venture partner. But I do get that it is actually really natural to start wondering, Hmm, I wonder if there's an opportunity to do something with this person, or to maybe build something together, because just imagine how much fun it would be, especially when this person's not only really exceptional at what they do, but they're also fun to be around. And it's like, "They get me. We vibe. We can bounce things off one another." Just imagine how awesome that is going to be. Yeah, that's not the reason to do this, okay? Let me tell you that.  The other thing to be mindful of is that just because somebody is exceptional at what they do and you vibe, doesn't mean that they've got any aspirations to become a business owner. Business ownership is an interesting beast. It is very challenging. There is a lot of risk, and not a lot of people want that. And you know what? That is perfectly okay. 

So to be clear, an exceptional employee does not necessarily equal an exceptional business partner. Those two are not automatically the same. So how do you know then? For me, there are three things that you need to consider before I recommend you or before I personally would ever consider going into business with somebody. It's actually quite simple, but it is incredibly important.

Number 1: Proven Track Record 

There should be a proven track record. And the key word here is proven. Not potential. Not possibility. Not I think this will be amazing. Proven… over a sustained period of time. Just like you won't get married in three weeks from meeting someone. I wouldn't even recommend getting married in three months from meeting someone. Ideally three years, right? Proven, over a sustained period of time. Ask yourself, have they consistently demonstrated that excellence? Have they shown over a sustained period of time that they can be relied upon? Do they follow through on what they say they'll do? Can this person solve problems independently? Do they think, and have they been, even whilst just being an employee, have they been thinking like an owner during that time that they've been with you, rather than simply, you know, looking at everything that they do as an employee? 

And let me just stop here for a second in saying that you cannot expect your employees, all of them, to think like an owner. Because they aren’t an owner. But the people that you can potentially go into business with, they are those unicorns that get business, that can actually have empathy. And when I say empathy, I'm not saying feeling sorry for the business owner because you work so hard, like we chose to be the business owner. We chose to take the risk. Nobody should feel sorry for us. I'm talking about empathy. It's understanding and being able to put yourself in the shoes of the owner. It's like I can see where you're coming from. I can understand that there's a lot of risk that's on your shoulders. So that's what I mean with can they think or do they think like an owner, rather than simply just, doing their job.  

Because running a business isn't just about being exceptional. It isn't just about having great ideas, okay? It is about consistently executing the great exciting projects, but also executing the boring stuff. Doing things week after week, month after month, year after year. So you really want somebody that has that demonstrated consistency also over time. Not just when they are motivated, and very importantly, not just when things are easy. It is easy to get along during times of feast. So, if you've only been working with this person whilst the business has been doing well and you've only been sharing the successes with that person, or they've not been with you through tough times, then that's not a proven track record. Yes, it's a track record, but it's during good times. But people reveal themselves during tough times. That's when you get to see who they really are. 

So you really want to ask yourself, have you been through difficult times with this person? And what was that like for the two of you to negotiate through those difficult times? Very, very important. Because past behaviour is usually one of the best predictors of future behaviour, and I'm sure you've heard that saying before, because it's freaking true. Which is why the word proven is so important. Not only with this first one, proven track record, but also with the next two that we're going to talk about. So take a minute to reflect, if you've been considering doing this with somebody in the team, is there a proven track record through times of feast, but also through times of famine. If not, I'm going to say it's too early in the piece. 

Number 2: Proven Trust 

Needless to say, this one is pretty important, because your business partnership or your joint venture is going to be built on trust long before it's built on the legal agreement that forms the foundation of this business relationship. Because yes, you're going to have maybe a shareholder’s agreement, a partnership agreement, a joint venture agreement. I don't know what other types of agreements there could be. Like I said, that's the question for the lawyers. But yeah, most certainly there needs to be some type of legal agreement that sets out the nature of your relationship. So there's going to be lawyers involved, there's going to be accountants involved, but none of this replaces the importance of trust. 

The way I think about it is that the legal agreement that you're going to put in place, that protects you and the other party for when the relationship and therefore the trust breaks down. Now obviously, I'm sure you'll agree that we would much rather choose someone where we don't expect that trust to break down in the first place. And I don't know what the stats are on the success of these types of joint ventures, but I can tell you there's a lot that's highly successful and there's a similar amount that's not successful and that just ends in freaking disaster. I know this because I work with practice owners in partnerships and stuff all the time. So I've seen ones that've been highly successful and ones that have broken down. So it's important to know that you can't predict the future, which is why we having this episode today, and it's also why having a really robust legal agreement to protect both parties when the relationship or trust breaks down, so that that agreement can then guide us as to what needs to happen, and both of us knowing, or it could be more than two people, all of us knowing that when everything was good and dandy, we all agreed that this is how this is going to work. 

So if you are considering going into business with a team member, you need to ask yourself, Can I trust this person? Will they be willing and able to have difficult conversations with me instead of avoiding it? And remember number one, do we have a proven track record of having been able to do that? Will they tell me when they think I am wrong? And will I be comfortable going to them, and trusting that I can raise with them that I think that they've got something wrong? Will they act with integrity even when nobody's watching? Very important. Will they make decisions that's good for the business, not just good for themselves. And trust is a tricky thing, right? And I will say this, putting on my psychologist hat, some people are naturally more trusting than others. And if you've had a personal history in life, often this happens in our personal relationships where trust has been broken, then you are probably less likely to just naturally trust other people. 

Some of us have been in the really fortunate position where we've not had those difficult personal situations where trusts were broken over and over, time and time again, and therefore we are naturally more trusting.  I think I'm probably somebody that's more naturally trusting. I think I'm fortunate to say, and I have to be mindful of this as well because my personal philosophy is that you're innocent until proven guilty, so I'm going to trust that you are trustworthy until you've shown and proven otherwise. That's just, I guess, my rose-coloured glasses that I still have. I think as a psychologist, I know the realities. I know that life is not like that. But I also have to always believe the best in people. That's just who I am.  So I think it's important for you to know who you are as a person. What is the bar that you set for other people? Which is why,  thing number one was the most important thing, a proven track record. Because if I know I trust naturally that people are going to do the right thing without there being a track record of proven trust for this specific individual, it can come back to bite you. 

People aren't just trustworthy because you naturally believe in it. You need to look at the evidence, and trust is built through hundreds and hundreds of interactions over the years, which is why it's a track record. Trust is built through having had difficult conversations. Trust is built through how we negotiate challenges. Trust is built through if this person has previously made a commitment to me, have they kept it? Trust is built through every time I've asked them to do something, or when they've told me that they are doing something, that they do what they said they were going to do. That is how trust is built. And I will say this, this goes both ways, right? Because that person is also coming into a relationship with you, and they should be asking these exact same questions of you, and they need to be able to say, Yes, I can trust this person. 

On a more personal note, when it comes to trust, there's two additional questions that I ask myself here, and that is, Will I trust this person and do I trust them with my money, and do I trust them with my kids? We need to be able to clear those two bars. When it comes to money, when I say trust them with my money, like, will I give them free rein and access to my bank accounts? If not, it means trust has not been established. You might find this interesting, and please don't judge me for this, but I have, for the last more than 10 years, given the person that would run my business full rein to my bank accounts, the practice bank accounts. In fact, I can't remember when last I actually personally processed a transaction in the practice's bank account. 

Now, what I will say is it's only this one person, So I know everything that goes through is this one person has access to it. I've never given access to my bank account to a bookkeeper or an accountant. I know a lot of people do that. I don't do that. Bookkeepers, they can go into Xero, but they don't touch my bank account. You know why? Because I have had the unfortunate privilege too many times over my life to have to do, in my clinical work, deal with business owners who were done in, stolen from, defrauded by bookkeepers. I'm sorry, I know all bookkeepers aren't the same, but this has happened so freaking many times to people. And so that just, that was my learning, is like I'm not letting that happen to me. 

So if I'm going to trust somebody to run the practice, whether that is as my principal psychologist or my business manager, whatever the title is at that period in time, if I'm going to trust them to run my business, I need to trust them with the money side of it, because finances is an incredibly important part of the business, But it also means that I know that everything that goes through the business bank account was that person. They have their own bank cards. They have their own login details. It's all set up. Everything can be tracked .. you know, because you might listen to this and go, "You are so freaking naive, Gerda. You're opening yourself up to losing money," and because there's, there's a lot of control that you need to let go of when you do that, and there's a lot of freaking trust that goes into it. But you know, once you've done it, it's amazing. Knowing that you've got somebody that you can trust in that manner, I feel incredibly privileged to have had people, and still have today, people in my life, as a business owner, that I can trust in that manner. So yeah, that's incredibly important. 

Can and do you trust them with your money, and then can and do you trust them with your kids? Because my children are the most important thing in my life. Like, I think we will all die for our kids without thinking about it twice. They are my most precious... I don't want to say belongings because they don't belong to me, but you know what I'm saying, right, and will I trust this person with my children? If no, then I need to freaking stay away from them when it comes to going into business with this person. Because, I'm sorry, my business is like my fourth child. I've got three kids. My business is my fourth baby, and my fourth baby is going to be 20 next year. Can you believe it? So yeah, I need to be able to trust you with my kids, including my fourth baby, if we're going to go into business together. That's just how it is.

Number 3: Proven Temperament 

I do think I've actually alluded to this one slightly, throughout the previous two, because all these things are interlinked anyway, because this is actually one of the biggest predictors of whether your business partnership, joint venture, whatever it turns out to be, to predict whether this will actually succeed. Because the one thing that is certain about business ownership, and allied health is no exception to this, and that is - that things won't always be smooth sailing. In fact, business challenges are a given. There's going to be difficult conversations coming your way. There is going to be budgets, but then all of a sudden, all these unexpected expenses. There's going to be staff resignations. There's going to be cash flow problems. There's going to be disagreements. There's going to be stress. There's going to be pressure, things happening that you can't control, which are going to make you feel really anxious and overwhelmed. 

So the question is: Who is this other person when life gets hard? How do they respond when they're under pressure? Can they regulate their emotions? Can they separate the problem from the person? Can they receive feedback without becoming defensive? Can they have a disagreement, but do it in a respectful manner? When they make a mistake, can they recover from it? Do they know how to handle making mistakes? 

As I was saying that, I was thinking back to last year's Private Practice Business Intensive. At the end of every day, we actually have an Expert Panel discussion, and throughout the day we allow people to put anonymous questions in a question box at the back of the room. So we'll answer those questions, but people just can, ask for the mic and ask any questions. And one of the questions that was asked was of my principal psychologist, and the person said, " You know, you work for Gerda. What is the one thing that Gerda does that has helped you excel in your role as principal psychologist?" And everybody went, "Ooh, ah," because Gerda was sitting right there in the room. And she said, "She allowed me to make mistakes. She's incredibly knowledgeable. She knows how to run a business, but sometimes I think I know better, and Gerda always knows better. And I make a mistake, and you know what? She's okay with it, and she allows me to learn from my mistakes." And I went, "I didn't even realise I was doing that, but yeah, I do." 

And that means that for me, even though in a principal psychologist role, yes, that person works for me, they're my employee, but they've got that proven track record. They don't think like an employee. She thinks like an owner, and that is why I had always been comfortable letting her make mistakes, letting her learn, letting her flourish, letting her bring stuff to the table that I did not have. And that just made me think of that because it's so incredibly important to be able to make mistakes. Because I can tell you, we make mistakes in business all the time, but how do I navigate through that? How do I learn from it, and how do I carry myself during that time?  Because it's easy to be a great business partner when everything is going well. Like I said earlier, through times of feast, it's easy, right? The real test is what happens and how do we act, and how do we behave when things aren't going so well? Because when the pressure is on, that is when your true temperament, your true character is revealed. 

If I'm going to go into a business partnership with somebody, I want to know who they become when the pressure is on, because that is the person that I'm going to have to deal with at that time, and again, this goes both ways. The person coming in to do business with you, they need to ask these same questions of themselves, and you need to ask yourself, how are you? If that person asks these questions of you, how are you going to do that? Because when you go into business with someone, you're not the most important person in that relationship anymore. 

When you're a sole business owner, it's you. You make all the decisions. You've got all the control. You need to realise that that's not going to be how it is. Are you okay with that? So you need to check your ego as well, because especially if you've been doing this by yourself for a really long time and you've always gone, "I'm the person, I'm in charge," and maybe it's more like, "I'm the only person that I can rely on." And I think that's a big step as well, learning that you can rely on other people, and if you feel like you can't rely on that other person, then don't do it. It's not going to work, and that's why that proven track record, proven trust, that tells you, can I rely on that person? If you can't, you shouldn't do this. So I hope you've noticed that the word proven was in front of proven track record, proven trust, and proven temperament. 

Don't Rush It 

If I can leave you with one last piece of advice, it would be do not rush into a business partnership or a joint venture. Don't rush it. Time is your friend when it comes to these types of things. Because one of the greatest advantages you have before entering into this type of relationship with a team member is that you already have had the opportunity to observe them. For you to get to see them across different seasons of business. The good times and the bad times. Times of when the business is growing, and times when things were difficult and challenging. Times when they were excited and when they succeeded, but also times when they made mistakes and they failed. Because every one of those moments is going to give you the information you need to make the right decision. 

So don't feel pressured to make somebody a partner just because they are a fantastic, fabulous, amazing human and employee. I think one of the main reasons why when I did this it went really, really well was because there were years of building a relationship before we ever did it. We'd already seen a proven track record. We had already experienced each other's temperament. We had already built that trust long before we signed the legal agreements. And the paperwork simply just formalised what we already knew to be true through all those years of working together. So if you're considering a joint venture or a business partnership with any person on your team, remember proven track record, trust, and temperament. Everything else can be worked on. But those are really important things that need to be earned and proven before you take this step.

I hope that that was helpful. I hope that that gives you a lot of food for thought. And as always, thank you for tuning in, and remember that I am here to help you build a practice you can't stop smiling about. 😊

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Gerda Muller

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