In a recent episode of the Never in Reverse Podcast, Bill Fairman, an experienced co-founder in the financial services and mortgage lending industry, shares real-world insights on what it takes to build resilient partnerships and lead with integrity during times of crisis.
1. The Power of Community and Resourcefulness in the Early Days
Starting a business with limited resources is daunting, but not impossible. Bill Fairman’s journey began with minimal capital, but he leveraged the support of a real estate investing community that acted as an informal incubator. This community provided:
- Office space, phones, and internet at no cost, allowing Bill and his sister to focus on building their business rather than worrying about overhead.
- Access to a network of potential clients and investors, accelerating their growth and credibility.
Actionable Advice:
- Seek out communities or incubators in your industry. These can provide not just resources, but also mentorship and early customers.
- Be creative with your resources. Don’t let a lack of capital stop you, look for partnerships, barter arrangements, or shared spaces to get started.
2. Family Partnerships: Honesty, Boundaries, and Communication
Working with family can be both a blessing and a challenge. Bill’s partnership with his sister thrived because of their ability to communicate openly and honestly, even when conversations were tough.
Key Insights:
- Brutal honesty without personal offense: Family members can often be more direct, but it’s crucial to separate business feedback from personal feelings.
- Regular check-ins: Daily and weekly huddles ensured alignment and prevented misunderstandings.
- Addressing personal issues: Life events (divorce, health, stress) inevitably spill into business. Acknowledging and discussing these openly prevents resentment and miscommunication.
Actionable Advice:
- Establish clear communication routines (e.g., weekly meetings) to keep everyone aligned.
- Create boundaries between personal and professional relationships.
- Address issues early, don’t let small problems fester into major conflicts.
3. Scaling Up: Evolving Your Approach and Managing Investor Money
As your business grows, your responsibilities and risks increase. Bill’s company transitioned from brokering individual loans to managing a pooled fund, which brought new challenges:
- Dealing with passive investors required a different approach to communication and trust-building.
- Increased pressure to deliver consistent returns and manage larger sums of money responsibly.
Actionable Advice:
- Continuously evolve your processes as your business scales. What worked for a small team may not work for a larger organization.
- Prioritize transparency and regular updates with investors, especially as stakes grow.
- Invest in robust accounting and compliance systems to prevent errors or fraud.
4. Crisis Management: Transparency, Trust, and Taking Decisive Action
No business is immune to crisis. Bill’s company faced a devastating $68 million loss due to a partner’s mismanagement. The way they handled the aftermath is a masterclass in crisis leadership:
- Immediate transparency: Bill and his team personally called all 87 investors, held live town halls, and sent regular updates.
- Open Q&A: Investor questions were anonymized and shared with the group, ensuring everyone had access to the same information.
- Decisive action: The problematic partner was removed, and litigation was pursued.
Actionable Advice:
- Communicate early and often during a crisis. Silence breeds rumors and erodes trust.
- Be honest about mistakes, investors and staff appreciate candor over spin.
- Document and share your crisis response plan with your team so everyone knows their role.
5. The Value of Mastermind Groups and Support Networks
Entrepreneurship can be lonely, especially in tough times. Bill credits mastermind groups and peer networks as essential to his resilience:
- Safe space for vulnerability: It’s natural to feel embarrassed or hesitant to share struggles, but these groups exist to support and advise.
- Diverse perspectives: Members from different industries can offer fresh solutions and emotional support.
- Accountability and encouragement: Regular check-ins help you stay focused and motivated.
Actionable Advice:
- Join or form a mastermind group of peers at similar or more advanced stages.
- Be proactive in seeking help, don’t wait until you’re overwhelmed.
- Reciprocate support, help others in your group when they face challenges.
6. Partnerships vs. Hiring: Setting Expectations and Exit Strategies
Bringing on a partner is a major decision with long-term consequences. Bill’s advice is clear: “Never bring on a partner; always hire.” If you must have a partner:
- Draft a clear, detailed partnership agreement before you start. This should include:
Roles and responsibilities
Decision-making processes
Exit strategies and buyout terms
Procedures for resolving disputes
- Revisit and update the agreement regularly as your business and personal lives evolve.
Common Misunderstandings:
- Assuming alignment will last forever: People change, and so do their priorities.
- Underestimating the difficulty of a “business divorce”: Splitting with a partner can be as painful and complex as a marital divorce.
Actionable Advice:
- Hire for skills and expertise rather than giving up equity unless absolutely necessary.
- If you do take on a partner, have the “breakup” conversation early—when everyone is calm and optimistic.
- Use a “living document” for your partnership agreement, revisiting it as circumstances change.
7. Return on Effort: Focusing on What Matters Most
Not all customers, investors, or partners are created equal. Bill emphasizes the importance of evaluating not just return on investment (ROI), but also return on effort (ROE):
- The 80/20 rule: 20% of customers often cause 80% of the problems, while the other 80% provide most of your income.
- Don’t be afraid to “fire” customers: If a client is draining your time and energy, it’s better for both parties to part ways amicably.
Actionable Advice:
- Regularly assess your client and partner relationships for both financial and emotional ROI.
- Prioritize high-value, low-drama relationships that align with your business values.
- Be honest and direct when ending relationships that no longer serve your business.
8. Facing Challenges Head-On: The “Never in Reverse” Mindset
Progress means moving forward, even when it’s hard. Bill’s mantra, “Never in Reverse,” is about:
- Owning your mistakes: Make the tough calls, deliver the bad news, and deal with the consequences directly.
- Learning from failure: Failure is only failure if you don’t learn from it.
- Building resilience: Every challenge you overcome strengthens your business and your leadership.
Actionable Advice:
- Adopt a forward-focused mindset, don’t dwell on setbacks, but use them as learning opportunities.
- Celebrate progress, no matter how small, to maintain momentum.
- Encourage a culture of transparency and accountability within your team.
Summary of Actionable Tips
- Leverage community support and be resourceful in the early stages.
- Prioritize open, honest communication especially in family partnerships.
- Evolve your processes as you scale, and invest in robust systems.
- Be radically transparent during crises to maintain trust.
- Hire rather than partner when possible; if you must partner, set clear exit strategies.
- Focus on return on effort, not just return on investment.
- Face challenges head-on and learn from every setback.
You can listen to "What Holds Co-Founders Together When Everything Falls Apart" audio version for free on Apple Podcasts, Amazon Music, and Spotify: Search 'Never in Reverse Podcast'
