Mark: Today on PowerTips unscripted, we talk to Matt Carlson, co-owner of Fox Home Innovations in Manhattan, Kansas. Having a business partner can be an enormous advantage if approached correctly. Most underestimate the commitment and work that goes into a partnership, ensuring that you both are on the same page and share the same vision. Go far beyond having a plan on paper.

Mark: As the minority partner in this company. Matt is here to share their story and reflect on what he’s learned as their company has grown. We’ll hear that story in just a minute.

Matt: On the level.

Victroia: Do you understand the words that are coming out of my mouth? Hi, this is Victoria Downing and welcome to PowerTips Unscripted, where we talk about tips, tactics and techniques to help you build a strong, profitable remodeling company. And I’m here with my co-host, Mark Harari.

Mark: Hi there.

Victroia: How you doing over there, Mark?

Mark: I’m doing well. And you?

Victroia: Good. You know, this is going to be a really interesting topic today because so many of our roundtable members have are involved in partnerships of one form or another.

Mark: Yes. Or considering getting into a partnership right.

Victroia: You know, and I think that the idea of sharing some of the things that make partnership successful can go a long way in helping alleviate some of the angst that goes into partnerships that dissolve or go bad or go south. You know.

Mark: It’s it’s it’s like a marriage and it’s just like a marriage. It takes work.

Victroia: You know, one of our members I can remember I can still remember where I was when he called me up to tell me that he was joining forces with another person in his market. They were all excited. And now, three or four years later, they just dissolved. Their partnership just didn’t work. Yeah. So, hey, let’s find out what does work, shall we?

Mark: Let’s. Let’s. Ciao.

Victroia: Okay. Matt Carlson is here with us today, and I’m really pumped about that. He is the general manager and co-owner of Fox Home Innovations in, as Mark said, Manhattan, Kansas, what they call the Little Apple. After ten years in the business, nine of those as an owner, Matt’s here to share the lessons he’s learned from growing the company alongside his business partner, Chris.

Victroia: And Chris was a presenter at the just past Summit in Orlando. So great to have you, Matt. Welcome aboard.

Matt: Thank you, guys. I’m excited to be here. Hopefully I can contribute some information.

Victroia: Well, you know, Chris has been a great contributor in the past and I know you will be, too. So I’m glad to have you on. So partnerships, You’re pretty glad you’re in one,

Matt: Yeah, I’ve been I’ve been really fortunate for the situation that we came across and how we approached it. And I couldn’t imagine doing this any other way without a partner. So.

Victroia: Well, tell me.

Matt: Like it was.

Victroia: How did you and Chris get together in the first place? What were you to do and what was that process so real?

Matt: Long story short, we met in college. We both were studying entrepreneurship at Kansas State University, and we did a couple projects together and that’s where we met, introduced. And actually I remember him building the business plan for Fox when we really. Yes. And I remember thinking at the time is like, been this kind of a good business model, new construction has really taken off in town.

Matt: So the barrier for entry for remodeling was really low, seemed like a good opportunity. And the little secret to that is Chris is definitely scared of heights.

Mark:

Victroia: No rest for him.

Matt: Yeah. Once I graduated from college, at the time I was a full time fireman and given our art school background and we both had been in construction through conversations, he’s like, Hey, I’m going to approach Matt about this coming to work for me. And through those initial days of this, working as an employee, the background of school experiences in life and everything just kind of started us down the path of becoming business partners.

Victroia: So you went to work for him as an employee out the gate?

Matt: Yes. Yep. And in fact, that’s one of the initial key steps that led us to a partnership from like a logistical standpoint was being an employee.

Victroia: So what were your responsibilities at the start?

Matt: So just at the start, like I said, it was literally just, Hey, man, I need some help doing a couple of these things. I would love to have you just come work with me at the fire department. I had a lot of days off and whatnot going to school. I had the opportunity there and I wanted to make money.

Matt: And so it was basic carpenter stuff. You know, I was helping out in the field doing labor. You know, we didn’t have any processes or anything as small business. You know, we’re just trying to we’re just getting started. But one of the things I think is unique to our situation is when he approached me about becoming a partner, we never made it official.

Matt: He’s just like, Hey, for a year we’re going to do a trial run. I’ll treat you as a partner. But as far as payroll and everything else is concerned, you’re going to be an employee. No.

Victroia: Before. How long was it from the time you started? Till the time that you and Chris had that conversation?

Matt: That happened pretty quick. Like I said, we both kind of had, you know, off the side conversations. He knew that I wanted to eventually be running my own business. And, you know, we had kind of had like more like over beer conversations, like, hey, this would be kind of cool, kind of feeling each other out. And then as we started working together, that that’s when things started to get a little bit more serious.

Matt: So I’d say I mean, just pretty much right away, you know, maybe more formally a couple of months in.

Victroia: So because the company had just really launched and you joined it pretty quickly. There wasn’t a lot of equity built up or things like that. Do you think that made it a lot easier for you?

Matt: Yeah, I mean, as we all know, I mean, valuing even a successful remodeling company is very difficult. But yes, being at the beginning kind of the ground up, you know, kind of having an entrepreneur mindset, that’s an opportunity that I saw myself and and to one of the keys we’ll probably talk about I mean Chris and I were open book I mean he was open and honest and this is what I think I had eyes to discern.

Matt: Because if you come in and I was open and understanding with being able to pay that and how I was going to do it. I mean, we were both in our early twenties, so it’s not like I had a bunch of cash sitting around either. So it was an open, candid conversation where the middle on.

Victroia: So again took it to go back to where I so rudely interrupted you. So you and Chris had this conversation. He said, Let’s do it as a test run for a year. And what was the goal of that?

Matt: The goal was to just really still each other out. I mean, so many people I mean, once you sign on the dotted line and you make things legal, it’s like getting married. Once you get married, it’s a whole lot a whole lot harder to to break essential. And so we really just objectively looked at this and said, hey, if we’re going to this is a commitment to each other.

Matt: And so if we’re going to do this, we need to let’s test it out for a year. I had some of the responsibilities. You know, we had open, honest conversations about the direction of the company, the financials, everything that was going on. We just didn’t make it legal, formal. And so that was the goal.

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Victroia: So when he said to you, I’m going to treat you like an owner for a year and if it all works well, we’ll make it official then what? What changed about his treatment toward you?

Matt: I mean, our conversations went from, Hey, here’s the jobs that we have in front of us to, hey, this is this is my goal for the year. This is this is where our revenue is. This is what I want where I want it to go. These are the ideas that I have for the company. You know, this is my vision for Foxo and this is what I want it to be as well as, Hey, you know, what can we do to get some more sales or how can we market the company a little bit differently, which is that’s something that helped us work together.

Matt: Chris Before I came along, I hated marketing. It was a waste of money and still I was able to bring some of that to the table and push him. But I also leaned on him for some of the scheduling and all that. So I mean, really just having an open, honest conversation about the company as a whole and where we wanted to take it.

Victroia: So you moved a bit from tactical discussions to strategic discussions. So but I think that I think that one of the benefits that you had also were the fact that you both had heard the same things in school. You both had an entrepreneurial education. You knew what it took to run a business, which is something that’s kind of unique to both in that way.

Matt: I sorry to interrupt. I could get excited or I’m talking, but I 100% agree with you that I think that’s one that’s one thing that makes us unique, especially when we’re looking throughout our day. But one of the things that we were fortunate enough to learn in school, I mean, our professors, one of the first things they told us is, you know, if you’re ever going to go into business with friends or family, it’s got to be business first.

Matt: You know, everybody likes each other. They’re hanging out. Well, that’s all fine and good when you’re making money. It’s when things get hard. You know, a client doesn’t pay, the bills are due. That’s when you’ve got to have all those all the backups to your partnership. I have the black and white and the legal part of it and learning that going in, we approached it business first instead of friendship first.

Victroia: So once that year was up and you obviously said to one another, Let this work, let’s go. Let’s make it official. What was the legal process you went through?

Matt: We had to be honest. I mean, we went straight to a local lawyer and we just said, hey, this is what we want to do. Let you know. We we want to have our basic ownership papers, agreements, a simple buyout, and and then just two articles of incorporation. Okay. And so and so we went in and we had a legally bought out our our break up a 6040 when Chris was when we were negotiating that Chris, he wanted he wanted me to have enough skin in the game to be motivated to help the company grow, but also retain his majority ownership.

Victroia: Okay, great. So now that your partner so tell us about you know, it’s been a number of years. I’m sure you’ve worked through a number of hurdles there, but right now, how do you to communicate expectations of of each other and hold each other accountable?

Matt: That’s a great question. So the first thing that I had in my note that I wanted to share, so the last thing I was just talking about is our partnership on paper is 6040. But a conversation that Chris and I had early on and a value that we’ve held as we treat each other as 5050. And so in every single day, you know, he treats me as an equal partner.

Matt: So when we’re making decisions and we’re doing all those things, it’s open communication. And I think that’s probably been the biggest key to our partnership development is we are very objective when we talk. There’s not a lot of emotion, even if it’s about something that we disagree about. You know, we look at are what do we need to be doing, what’s best for the company, what’s best for our employees, And being able to have open, objective conversations allows us to cover a lot more ground and understanding to that.

Matt: I what was best for him. He wants what’s best for me. So trying to not let our egos get in the middle of the conversation, you know, he comes to me pushing me to hold me accountable. I might not like it, but then when I take a second and go away, I needed that push. I did agree to get that done.

Matt: I didn’t need to get it done because that’s the commitment that I made. Okay.

Mark: So have you and Chris ever just 100% disagreed on something completely opposite opinions? And if so, how did you remedy that?

Matt: that’s a great question. I think I off the top of my head, I really can’t think of something. I mean, we may have had our differences of opinions, but I mean, like I said, that’s probably one of our strongest assets, is we’ve been able to be open minded. And I think, you know, we’ve came around and through discussion and I’m like, so I don’t I’ll sell my head.

Matt: I can’t think of anything that we really just we’re like black and white. Complete opposites of the page.

Mark: That’s great. Well, so do you guys. You don’t share do you share in any passions in the business? I mean, is there any stepping on toes? You know, you mentioned he completely against marketing or at least was so obviously marketing wouldn’t have been a thing. But is there something that you both want to have your hands in? But it’s one person’s responsibility.

Matt: So I mean, yes, the I think so because Chris founded the company and he wore all the hats so early on. One of the biggest challenges we’ve had to overcome as partners is as we’ve grown and delegated responsibilities out, you know, like separating out from production, from design sales for design, all those different things. Chris’s natural tendency is as the initial owner, so he wants to jump in and manage some of those.

Matt: Because even since I’ve been an owner for nine years, there are still a lot of responsibilities he had, you know, we didn’t have the perfect structure. So I’d say right now an area that we both tend to get drug into is answering some production questions, being on the front end and sales, you know, he still has some information that the guys come ask him about.

Matt: But for the most part, we have really worked pretty hard to get ourselves separated out of those things.

Victroia: So when you today, in the day to day, what sort of regular meetings do you have, you know, throughout the course of the year to to set the strategic direction of the company, to look at all the decisions you have to make, you know, new hires, new directions, new markets, diversification. How do you what sorts of regular meetings do you have to discuss all that?

Matt: Great question. So I would say one of the first things is, is Chris is generally the first person I talk to in the morning and the last person I talk to after work. So him and I try to make time to formally meet maybe once a month or every other month to sit down and really assess stuff. But the reason for that is because as we’ve grown, we’ve gotten really good about communicating in an hour.

Matt: You know, we may have an hour phone call or a long text message or a lot of the vision and the growth of the company. Yeah, that’s for some of those discussions happens. But we’re getting to the point where we’re starting to develop a leadership team to agree. We’re bringing other people into those conversations. And so while Chris and I work really hard to be in lockstep, we’re presenting things to the leadership team.

Matt: We are starting to do things like having a quarterly offsite leadership meeting as well as like coming up here in November. We have a two day offsite leadership team meeting where we as a group start to drive the goals and the visions of the company.

Victroia: All right, great. So, again, what’s been that key? Do you have you ever like Mark talked about, you have disagreements in the in the short term, in the immediate. But do you agree on that long term vision? I mean, now you’re bringing other people into it. Are you pretty much in agreement for where you want to be with the two of you?

Matt: Yes. So I think that’s you know, to that point, I think that’s something that a lot of people that I’ve talked to that have business partners and relationships. I think that’s kind of like a missing step, is that takes a lot of work and conversation to really sit down and reflect where you want to be in five years and ten years.

Matt: It’s not, hey, next year, this is next year’s revenue goals. You know, those are pretty simple, but it’s when you’re really looking down the road and that’s where some of those deep conversations need to happen. And I feel like some of the partnerships that I’ve seen fail have been, Hey, you’re really good at this. I’m really good at this.

Matt: We can make some money in the short term, but if no one realizes the commitment that it takes you, Marc, you said at the very beginning of the podcast, this is a marriage. I mean, I essentially have two marriages, my one of my beautiful life. And with Chris as a business partner, you know, when we look at Fox, this is a business that we want to be around long past Chris and I being here.

Matt: And so that takes creating that vision and discussing what we want it to be.

Victroia: Can I? That’s very neat. That’s very neat. So if you were going to give if somebody is out there and they’re considering a partnership, what are three pieces of advice that you would give them right off the get?

Matt: Be open and honest, put your ego aside and realize that your your split a partnership may be a percentage on paper, but both of you has to give 100% effort every single day. Otherwise it will fail.

Victroia: Okay.

Mark: All right. That’s great. Well, Matt, one last question for you. You ready for the Lightning round?

Matt: Bring it on.

Mark: And now here’s a reminder. Advantage Lightning round.

Matt: It’s a draft.

Mark: Okay, here we go. 60 seconds on the clock, please. What’s your favorite business book and why?

Matt: Leading Change by John Carter. It does a very good job of talking about influencing change and making those changes last within a company. But we’ve read Traction as a company, which is super awesome book. I love it. But leading change really dives into the fact that making a substantial change in your company might take three, five, ten years.

Matt: And by the way, if you don’t follow up on those changes consistently after you make them, all that progress can be lost in a matter of months.

Mark: Q If you weren’t the owner of a remodeling company, what do you think you’d be doing?

Matt: Probably still firefighting.

Mark: What are you not very good at?

Matt: taking out. Yes. My way.

Mark: Your room, your desk or your car? Which do you clean first?

Matt: Desk? Hundred percent.

Mark: If someone wrote a biography about you, what would that title be?

Matt: He talks a lot.

Mark: What’s the weirdest thing I’d find in your refrigerator?

Matt: What’s a vegetable stock?

Mark: Do you apply the five second rule to drop food?

Matt: Absolutely.

Victroia: Absolutely. I met. This has been great. Thank you so much for sharing this. You know, I think it gives people a lot of food for thought. Again, you know, it’s a big step to go into a partnership. I did it, too. And, you know, you have to really take the other person into consideration. So much of the time.

Victroia: So, you know, I think you give people some really good tips. Now, before we let you go, however, I do want you to share your five words of wisdom with our listening audience and tell us why they resonate with you.

Matt: Awesome. Be happy to do. My five words of Wisdom or six tests without failure is non-existent. And the reason that is resonates with me is it’s important to understand that we’re all going to fail, whether whether it’s in business and life. And it’s and it’s when we succeed through those failures that allows us to appreciate that success, work together, great.

Matt: And it all comes with hard work.

Victroia: So. that’s I think that’s awesome. Great words there. Thank you so much for sharing that and for being part of this. Now we’re going to tap into you some more, Matt Carlson, as we go forward in our land. So watch for those requests to participate.

Matt: I would love to. Thank you guys very much. This is an honor.

Victroia: Good job. Thanks, Matt. You know, being part of a partnership, as Matt said, is isn’t easy. I mean, just like marriage isn’t easy, right? You really have to be working at.

Mark: It all the time. I think it was, you know, and continuing the analogy, it was kind of cool that they decided to live together for a year. You know, it was interesting.

Victroia: Yeah, it was. You know, I wonder I guess it works as well as living together works. I wonder what the statistics are. But nonetheless, you know, I do think that they’ve got some benefits for their same basic age. They both went through business school together. They started together at the beginning. All of which doesn’t mean it’s not challenging because it certainly is challenging.

Victroia: And they’ve been partners successfully now for ten years. And you can just watch them grow. I mean, right before your eyes, it’s been awesome to have them in Roundtable.

Mark: Yeah, they’re fantastic. They’re a great contributor to the whole thing. But yes, they’re good guys and it’s really cool to hear how their they’re making it work. There’s got to be some tough days. I know. I have them with you. Ha ha.

Victroia: And I probably had them with my business partner in the past.

Mark: Two months in the. In the old days.

Victroia: The old days. But it’s a good thing. I loved having a partner, too, so. And I love working with you.

Mark: Yeah. Fun stuff. Yep. We want to thank Matt Carlson for being here today. And as always, we want to thank you for listening Weekend and week out to our humble little show. I am Mark Harari.

Victroia: And I’m Victoria Downing. We’ll see you next week.