 Hi, coach. Welcome back to this new episode with my friend, Andrew Casarro, Valor Accounting Services. Andrew, how are you today? I'm very well, Leo. How are you doing? I'm very well, Andrew. Thank you for joining us again on another episode. So today we're going to talk about something that's very common in this industry, and that is business partnerships. So if you're a coach watching, what we're going to be touching on today is tips and strategies and information from the legal, shall we say, side when you take on business partners. Is that correct, Andrew, or am I going off? No, no, you're good, you're good. We're going to be talking about, yeah, about an overview, really, of it, and in what kind of circumstances will business coaches want to take on partners and things to look out for as well? Fantastic. Really looking forward to this. So let's get cracking. All right, brilliant, brilliant. So yeah, I think the first thing to talk about is why would any business owner want to collaborate or take on partners, right? And there's a variety of reasons. And just to kind of point out some of them, you know, it could be if you're in your business, you know, and you want to get access to certain exposure from an established business. This might be quite common, you know, if you're just starting out. Another one could be, you know, if you're a bit more of an established business, or even if you're just starting up, you might want to have, you know, different types of coaches to really compliment your business. So they could have different coaching styles. For example, you could take on partners that, you know, can compliment you in the sense that their strength may be your weakness. You know, so just to give an example, if you love the coaching sides of running a business, but in terms of the operational side or the admin side, you need a partner to deal with those kinds of things. Then you can take on, you know, a partner to do so, to focus, to allow you to focus more on the coaching side. Or if you want to take a step back from the business, then have a coach and you want to partner up with them in that sense as well. So it is also that and another thing as well could be, I know we spoke earlier about in the previous podcast, you know, taking on staff and this is very much related when you take on partners because you may have a member of staff who has been with you from the beginning and you might want them to have a bit more responsibility. Maybe have, you know, have a share in the business, you know, and we obviously will talk on a bit more about that. Another reason why you would want to take on partners is to share resources. For example, if you've got a sports coach which has access to facilities, equipment, you can make me share that with them. And if you bring them to the table, maybe you've got, you know, a number of clients or participants, you can also share that and that could help save costs, especially when starting out. So there is that option as well. And then you've got market expansion, you know, you may want to access, you know, new markets, customers and a couple of scenarios here is if you want to expand using outside industry, you know, experts, for example, if you're a football coach and you want to, you know, here's a good example, if you're a football coach and let's say you teach kids, right, you may have a Zoom instructor who teaches, you know, strength and conditioning for adults. So a good collaboration would be during the time where the kids are being taught, the parents can then do a strength and conditioning class in maybe the same vicinity. You know, that that might be something. So that's kind of outside industry, inside the industry, for example, if you're a football coach and you want to partner up for example a goalkeeping specialist, that can also happen as well. So that's kind of an overview. Love that. Yeah. And this kind of goes into what a conversation I had with a coach the last week. He has a soccer academy. And what he does in the summer is he partners with another business to run a summer league. So because he's got X amount of clients, he partners up with another company who has X amount of clients and what they do is they run like a 4v4 5v5 summer league. So when his teams aren't playing in matches, because the summer usually is when nothing happens, the league is finished. They team up and do like a 10 week summer league. So that's a great example of what we're talking about today collaborating with another business to run something and leveraging off each other. And then actually, you know, off the back of that, it's a question of, OK, how do they do that? How does actually what the kind of intricacies around that? So there's a number of options which, you know, I think, to be honest, you know, we could really have a separate podcast for each one of these. So, you know, the first one, the most simplest form is, you know, some contracting. So this is more related to, say, for example, you teach specific clients at a facility or a gym, for example, and you maybe have need cover. So you get an instructor to cover for you, a sports instructor, then what might happen is that the gym will pay that instructor instead of yourself. There's actually no money being transferred between you, the business and that subcontractor. The gym, the facility just pays them instead of them paying you. That's kind of the most simplest way. And, you know, normally gyms, facilities may ask you as the business owner, who do you recommend if you need cover? So that's a kind of very loose way of having a partner, someone that you know is good, has a good quality of teaching and maybe teaching the same way that you do. That the clients or the participants, you know, they're not losing too much out on, you know, the business owner teaching them, someone who's a similar kind of teaching style, for example. Another one is commission basis. So this is an example where you may like combine clients, participants and one business, for example, collects the earnings. And then the other business that took part, then invoices them. So then they, you know, and they will be an agreed amount, for example, and just invoices them after, for example, and then that business who collected those earnings then pays them as an expense from their business. Does that make sense? Yeah, yeah, yeah. Absolutely brilliant. Then we've got another situation that kind of touches on like the staff side of things where, you know, if you've got a member of staff that has been with you for a while, and you want them to have a little bit more responsibility. You can, you know, you can essentially have them as an associate director, or another way is have them as an actual director. So a bit of a difference here. An associate director isn't really a term which is used within, you know, the company when you submit your year end accounts, an associate director won't be, you know, named as a director. However, it is just to denote responsibility. If you are an actual company director, that will just be, you know, that will come under your accounts for submission, and it would show the number of the directors there. And as well, it is just to denote that this, you know, member of staff has taken on a certain level of responsibility, which can be considered a partner of that business. Okay, and now we're going to look at a joint venture. So this is an example where you may have two sports coaches that have just started out, and they just want to form a separate legal entity, or they could be two established businesses. And they asked, they are, you know, setting up a separate business entity to what they already have, you know, and that could be, you know, providing, maybe they want to just not have all their streams of income in one business. And, you know, especially if it's, if it's a business partner, which they, you know, they obviously know very well, but they want to have things separate. And it could be something might be different, you know, in terms of could be merchandising. If you're a sports coach, you know, you may want to form a separate company, which just deals with merchandising and you partner up with someone who specializes in that. A strategic alliance. Now, this is a bit more formal than the commission basis, which we spoke about, but it's less formal than a joint venture. And essentially a strategic alliance is having an agreement in place. And this could be, you know, over a six month basis, it could be a permanent work, or it could be just consistent work, you know, number of days during the week over six months. So there's that option as well. Another option we've got is licensing franchising. So this could be where you're collaborating with another business where they are giving you exclusive use, exclusive rights to certain products, services, could be things from, you know, sports, sports bottles. And your, you have exclusive rights to use that and sell that alongside your sports coaching business. And they usually do it for a set period of time. And it would be a fee that they would charge. And there's obviously a number of different free fee structures and obviously very, very good idea to read the agreement before signing it. But yeah, that's kind of licensing in the nutshell. And then we've got, you know, we've got shareholders. Now this is, this is when you take on a member, they're called members and of your company and they have a certain shareholding of the company. So they could own 10% of that company. They could own 20%, 50%, whatever it may be. And the way that they get paid would be maybe a salary, they get paid for salary or they could get paid dividends, which is essentially profits taken from the business and then paid out equally or in a different way. Obviously shareholders can be a completely different podcast, but that's another way. And finally, we've got percentage of profits or turnover. And that can be that as well as down to the commercial agreement of what's going on. So for example, if you're starting out, you may want to have an agreement where a certain percentage of your profits or turnover will be given to your partner. And you know, these ones are, and we go actually, we'll go on to things to look out for, but these can be quite good to start off with, but can end up being a bit more detrimental going on, especially if you're very successful. But that's just the options in a nutshell. Yeah, no, I like them some really good information there. I always, whenever I speak to coaches that, and this, this partnership topic comes up. I always say the same thing, it's like you've got to make sure that any partnership you do form, it has to be strategic. And a lot of coaches when they're starting up, they want to, they want to form these partnerships because they think that that's, that's the road to success. Which sometimes it can be, but I think it only works if you partner with someone or a product or a service or something that you add value together. So something that I do well, and this is something you talked about just now, something that I do well, that he does well or she does well, and how can we combine the two to make it work. If you're just combining or partnering with someone and you do exactly the same thing, then you've really got to think about is this really strategic and is this really going to grow and take my business to the next level. Yeah, correct. And also, it's not to say that, you know, you choose one option and they become like a shareholder, for example, you could start off as on a commission basis and see how that relationship develops. And as you mentioned, if they compliment, like your skill set, then, and they seem like an asset to the business, bring them on, you know, bring them on. It instills loyalty as well. Right, instills loyalty and could definitely help your business to grow in the long run. 100%. All right. Perfect. Andrew. Yeah, we've got a little bit more. We've got a little bit more. Fantastic story. Just, you know, little things to look out for. You're spoiling our audience. I know, I know, I know, but, but yeah, you know, things to look out for is if you're on a commission basis, right, and you're just keeping to that. What that means is that you're having income coming into your business and then the, your partner is invoicing you, right? So that'll be an expense to your business. But what's happening is that as your business is going to be taking on a lot of that income, that turnover as itself. What that means is not necessarily inflate your, your income figure, but what would it do is it was, it will, you will reach your back threshold a lot quicker. And that is another thing, but essentially you have to be back registered. If you go over certain threshold, currently 85 eight over the year. Now, if you're on a commission, if you're doing commission basis work with a partner, and you're taking all the income, you're going to reach that. You're going to reach the threshold a lot higher. So before you get there, it might be worth considering doing a different partnership model because then when that comes in, you're essentially paying extra tax. So you may want to consider a different partnership model at that point. You gave a really good example, Leo, about, you know, having facilities partner up with, you mentioned someone who partnered up with someone who provided facility. It was, it was a pitch, I believe, and it was a long term thing. Do you remember that at all, Leo? Yeah, about last week. Yeah. Yeah, this was, this was all fair, wasn't it? Yeah. Yeah. So for those watching, basically, again, another conversation I had with a coach that he was starting up. He was a part, he was, he was living in a, in an area in the US where in the winter, you have to be indoors because just because of the weather, it snows a lot. So it's virtually impossible to be outside. And something he was struggling with, he was struggling with finding a facility. And what he did is he partnered up with a facility and basically they weren't charging him any rent. It was just a case of they were taking a percentage of every customer that he was bringing in. Now, the problem that he then had was that as his business started to grow, what he was giving that facility was a lot more than if he would, if he was paying an hourly fee to them. Okay. So that's just another example of, of taking on partners or partnering up with a facility. Yeah, yeah, that's right. And, and just as well, just to end a couple of other things is, you know, commercial agreements, as you mentioned, it's maybe beneficial at the start, but long term, especially for they're taking a certain percentage, you know, of your turnover, your profit, you know, that could be quite, quite detrimental to your business because it might not allow your business to grow because you're given a certain percentage of the way. And then another thing with shareholders, you know, if there is, if there is a dispute and you've got, you know, shareholders, which have got 50, 50 split. What happens when there's a dispute and the business breaks up and they own equally equal shareholdings of the business. This is where something called a shareholder agreement comes in. And this is a little bit outside, you know, this is more the legal side of it where you'd need a solicitor to help draft one up, but it is definitely something to consider if you're going down that route, because there are a lot of examples where it's a 50, 50 split. Who decides what what happens, you know, and this is where a shareholder agreement comes in, where in that case that does happen. It's, it's something that they can use to guide that that process which can be quite difficult. Yeah, I love it. Perfect. Okay. Anything else to add Andrew. No, that's it. That's it from me. All right, I'm going to put you on the spot again. So to sum it up to some this episode up, how would you sum it up. Yeah, to sum up, I'd say, look, if you're, if you're a sports coach, and you're looking to partner up, think of, think of where you want, where you want to go with this particular partner, what do you need in your business and really discuss with them, communicate with them the ways of how you're going to be dividing up the income ways of the partnership, speak to professionals, you know, speak to people in the community, if you're a community of sports coaches, how do they do it. And speak to an accountant who could, if especially from the shareholders side of things, you know, you've got to speak to these types of advisors so you know long term that, you know, you're in safe hands. Like that. Love that. Yeah, and I'd like to add something as well that like I mentioned previously a lot of coaches at the beginning. It's as though they don't believe in themselves. So that's why they, they, they feel that if they partner with someone, or they buy a franchise for investing to a franchise that's going to that's the road to success. Sometimes it's just believing in yourself, having a, you know, a roadmap to how you're going to get there, and just implementing. Okay. And a lot of the times you realize that you don't even need to partner or bring on partners until you get to a stage where then it's a, you know, you kind of need it because it's grown and scaled. But any coach watching and if you're at the beginning phases right just believe in yourself it does take time to grow. And if you do partner or bring someone on, then just make sure that it adds value to what you do. And it's something that you can't do. The reason why you're bringing them in is because you absolutely need them in order to add value to your program or to get to the next level. Love that. Yeah. All right, Andrew fantastic. Thank you again for coming on. A lot of the things we we talked about today we could make a separate podcast, which we probably will do at some point and go deeper into into it but thanks again and look forward to connecting with you on the next one. Last one. Thanks Leo.