Episode 86: Lessons from a Business Partnership Gone Wrong

Business partnerships can lead to incredible growth—but when they go wrong, they can also become your worst nightmare. On this episode of the Babies and Business Podcast, Avram and Rachel reflect on a past partnership that went sideways, sharing valuable lessons learned from the experience.

From spotting early red flags and understanding the importance of legal advice to maintaining professional boundaries and prioritizing self-care, this deep-dive conversation is packed with actionable insights. Whether you’re entering your first partnership or re-evaluating an existing one, these takeaways could help save you time, money, and energy.

Tune in now to hear stories, practical advice, and how they turned a challenging situation into a stepping stone for growth.

Show Notes

Key Highlights from this Episode:

• Avram and Rachel open up about a past business partnership that went off the rails

• They reflect on the emotional and professional impact of working with the wrong people, and how stress in business can bleed into your personal life

• This episode highlights how small red flags can lead to big problems if ignored, especially when urgency and chaos are used to force decisions

• Hear how they navigated communication breakdowns, shifting expectations, and the pressure to bend their systems and values just to keep the peace

• They discuss the power of having clear contracts, solid systems, and the courage to walk away when a partnership no longer feels right

• Avram and Rachel open up about the importance of kindness, boundaries, and trusting your gut, especially in business relationships that test your clarity and confidence

Mentions & Resources

• Power of One Podcast Business Matters #5 – Selling — A conversation from Tim Roberts and Michael discussing red flags in business deals.
• Digital Harvest — The digital marketing agency co-founded by Avram and Rachel, where they help home service businesses grow through SEO and local visibility strategies. This episode reflects real lessons from their own client and agency partnership experiences.

Mentioned Episodes

• Babies and Business Episode 21 – Worst Client Ever

Episode Transcription

Below you will find a transcript of this entire podcast episode. Enjoy!

Avram: It’s been about a year since we recorded a podcast about really terrible people, maybe a little bit more than that. Today, Rachel and I are reflecting back on something that happened, about a year ago, and a partnership gone really bad.

Rachel: Yeah.

Avram: Sideways, ups and downs. It’s a saga. One that we’ll share some details with for you today, but I think the big takeaway here is in our sharing about the worst partnership ever, might save you some future heartache, taking note of some of the red flags that we’re gonna share.

And, um, you’ll also get to hear some of our big takeaways and things that we did to improve our business as a result of it.

Rachel: Yep.

Avram: Any other thoughts before we jump into this, Rachel?

Rachel: It’s a wild ride.

Avram: Just that we’ve waited a long time to share it and felt uncomfortable sharing it.

Rachel: Yeah.

Avram: Of course we’re gonna keep many details private because it’s not about the person or persons. It’s about the lessons and things that we learn along the way.

Rachel: Right. Yeah. So we have some really great takeaways here and like you said, we want you to have some information moving forward for you in your business, and maybe save yourself the heartache that we went through of just working with somebody that was not great to work with.

Avram: No, because you know how it is running the business and working with your spouse and all the things at the same time. These stresses creep back into your household.

Rachel: Yeah.

Avram: Into your relationship. And it’s just not fun. So, you know, we, we do our best to avoid these things as much as possible ’cause they’re very unpleasant but oftentimes you don’t know it until you’re in it. So hopefully some of the guideposts signposts here and red flags will be, be useful. We broke down our story today to make it very simple. We broke it down into five key events that occurred.

Rachel: Yeah.

Avram: Otherwise, we could get so caught up and lost in the details that don’t, I think really matter.

Rachel: Yeah, and like you said, it’s not about the details, it’s more just understanding kind of what happened and what was seen and the journey a little bit, and then talking about what we actually came away with from that.

Avram: So where did it all begin? It began with a relationship that had started several years ago.

Rachel: Yeah.

Avram: And was now ready to mature and go to the next level. It was from a fellow agency owner. That said, Hey, I’ve got an amazing client opportunity that I can provide this particular service to them. But they want a lot more.

Rachel: Yeah.

Avram: They want your search engine optimization, special specialness, specialization, your specialness. They want, they want that too. You know, I can’t provide that. Maybe we could team up and do it.

Rachel: And offer this really great service all around service together.

Avram: Yes.

Rachel: It would take both of us to accomplish this.

Avram: It’s like, well this is very exciting, you know? As agency owners, we spend a lot of time and energy just to generate a solid opportunity, for us to, to work with another business. And so the prospect of having another agency bring their sales pipeline directly to us and essentially feed us some deals, it’s pretty attractive.

Rachel: Absolutely. We were very excited, the story being told to us was really attractive of, you know, there’s this great client, they really want these services. I’ve had this conversation with them and we are in the running, basically.

Avram: Yeah, so that was where things started was with a lot of excitement and things started to go off the rails in hindsight, pretty quickly after that.

Rachel: Correct.

Avram: There were some things that started to happen, as talks got closer to actually closing that client that were different than the conversations we’d had in the beginning.

Rachel: In that initial opt-in, basically when it was brought to us and said, Hey, this is an awesome client. They’re looking for these se
rvices. You have these services. I have these services. Let’s team up. Let’s do this together, and this is what that would look like. You would have front facing access to the client.

I would have front facing access to the client. The client would be working with two different agencies and they would know it. That’s when we opted into to working with this client and this actual agency owner.

Avram: Yeah. And it was like, well, you know, we’ll work together. You’ll, you’ll be public facing. I’ll collect the money. I’ll pay you guys. The client will pay one bill, but know, this is being subbed out. It’s like, okay, cool. That’s great.

Rachel: And that really worked with our system because we have great ways of working with clients, helping them understand what we’re doing for them, what is going on, all that reporting. They have that really great visibility.

Avram: Yeah, we pride ourselves in client retention. We have clients that, that stay three to four years with us on average. And it’s because of the, the high touch service that we offer. So things started to change during the conversation as we got closer to signing, which was, you know, we suspected at that point, by the way. They Had already signed the client.

Rachel: Yep. So technically, even if they brought us on that very day in this timeframe, we would already be behind on the timelines that they probably already promised the client. And we were actually really aware of that.

Avram: Because while we were starting to get this information about, so by the way. You’re not gonna have access to the client, you’re not gonna be able to email them as yourself and represent Digital Harvest. It’s gonna all go through me, and I’m gonna need you to change the way you do the reporting, the way you do, follow up, the way you do this, that you’re just like.

Rachel: Like, like none of our systems actually would work. All of our systems would break at this point because it is not. Well, if you think about it, nobody likes middlemen for a reason because it is multiple parties. It’s at least three parties with a middleman.

Avram: Yeah.

Rachel: So that means that everything that we would do, any changes that we would need, any feedback, any, any input of any kind would go through at least three different people.

It would be someone on our team, someone on their team, and then someone at that actual end client’s team.

Avram: Yes.

Rachel: And that increases the time, oh my gosh. It can actually quadruple the timeline of a project and that doesn’t actually work for us.

Avram: No, it doesn’t work for us but you know, we were like, oh, this is, this is an opportunity and you know, maybe we can make this white label agreement work. Maybe this is good. Maybe it’s gonna be even easier for us because we’re not having to do all the client stuff.

Rachel: Right. And really in reality, the end client is actually working with this other agency and they’re on the hook for all those timelines. So if the timelines don’t actually meet up and happen, then they’re on the hook for that. So, you know, it was kind of a, maybe just pushing it down the court a little bit, any of the problems that might come up.

So all this to say, we saw a lot of red flags early on.

Avram: Yeah. They wanted to change the deal as the deal was being made.

Rachel: Right.

Avram: In a significant way.

Rachel: After we had had a verbal agreement.

Avram: Misrepresented on two different conversations, at least up to that point. And then it was, all this messiness and making us have to bent. Oh, the, the final part before we move to like the third big thing was you know, we were told that there was this huge, massive family emergency. And then they just disappeared. Our point of contact just disappeared.

Rachel: Right.

Avram: And then suddenly

Rachel: Like to the amount of about a month.

Avram: About a month.

Rachel: Like no communication, zero whatsoever.

Avram: Right. Just little blips of like, Hey, could you send this part so that I can,

Rachel: and we’re like, we’re not even contract.

Avram: we’re not even contract yet.

Like, what is going on? You know? Then you find out, oh, big family thing. My, my whole life is upside down, but I’m getting it all together and it’s gonna be fine. Like, whoa, what happened?

Rachel: So huge red flag, but,

Avram: yep.

Rachel: And we kept going

Avram: Yeah. So that’s where it brings us to like this third milestone, which is what Rachel’s already alluded to.

The communication breakdown was so significant as soon as signatures were dropped. And that’s a whole other thing I think that we wanted to talk about. That’s when we were pretty sure that the other agency had signed the client at maybe a month or six weeks before we even started.

Rachel: Correct.

Avram: Urgency was being used to get us to sign documentation, to start the project, to collect payment.

Rachel: Yeah. You know, there’s three words that we wrote down. Chaos, delays and urgency, and I think when you’re listening to this and you’re thinking about maybe signing on this client, or you have somebody that you currently represent and they bring this to your, your life urgency, chaos, delays, all these things, that’s a big deal.

I don’t know anybody that likes any of that.

Avram: It’s the equivalent of drama, I think, in business. In your regular life people are gossiping and things like that, but when you’re trying to do business with a partner and you’re met with those three things over and over. It feels like the stress is unimaginable.

Rachel: Oh yeah.

Avram: You know, so we’re feeling this bubbling up over time because, you know, we’re communicating our timelines, but not hearing anything back.

Rachel: Correct.

Avram: We’re asking for certain things that still haven’t been delivered after being promised multiple times. These are essential parts of the onboarding. Usually when we onboard a client. Everything happens all at one time and within 48 hours, we have everything that we need to be fully functional in our role as their search engine optimization service provider.

But in this case, we were having to drag everything out and there were some components that we didn’t get for almost six weeks after we had onboarded.

Rachel: Absolutely. And a typical timeframe for communication between the agency’s representative and us was a week. And that’s the soonest.

Avram: About a week, yeah.

Rachel: It was awful that that kind of delay is just unacceptable in our timelines. Our timelines, we don’t actually have any real big leeway or give in our timelines that we actually state about when things are going to be finalized.

And we do have stuff that we talk to our clients about, Hey, you know, you have to provide us this in order to keep these timelines on track. It’s just awful. So, you know, we get through this weird chaos delay, urgency phase that’s going on, and then things aren’t going the way that this person, the, rep wanted and they just flip out.

Avram: Yeah. I remember we were touring the, the Montessori school down the street. With our son Lincoln, to enroll him when he turned three. And I remember getting blown up on my, um, my phone. I remember getting blown up on my phone and, and, uh being so stressed because we were getting all this pressure from the other agency owner about certain deliverables that we had said time and time again, weren’t gonna be up for like three m
ore weeks.

Rachel: Well, and that we were well within our timeline.

Avram: We were well within the timeline, well within what we had put in our own contract. And, but because they were so checked out of the process and, and we, we knew at this point suspected scrambling.

Rachel: Oh yeah.

Avram: Always behind on whatever, whatever deliverable.

Rachel: And then these bogus apologies or whatever, you know,

Avram: You know, oh, I

Rachel: emails it starts out with, I fired this person, or I hired this person, or they’re no longer with the company. You know, you hear those too many times and it’s kind of like your grandma died and you told me that Eight times

Avram: eight times

Rachel: you have eight grandmas?

Avram: Yeah. I mean, in this short little two month period, I think they fired like three different people. Right.

Rachel: We suspect, that, uh, this person is the friend or the, you know, the, the person that supposedly was fired.

Avram: Right, right. I fired that person. Well, that was, that was you. Right. We’re pretty sure it’s an agency of one with maybe some contractors.

Rachel: Right.

Avram: But they could also be the contractors. Just always running from behind. So Yeah, like Rachel said, they just flipped out and that was the first real communication that we got from them.

Right. They flipped out. So the first, the first sign of any, issue from their perspective. They flip out.

Rachel: Right. And we’re like, mm, yeah. This, uh, okay. Pause,

Avram: Pause.

Rachel: Major pause.

Avram: Yeah. And this is where we’re gonna take a little pause too, because it does end.

Rachel: Yeah.

Avram: We’re gonna tell you how it ends. Were there any other like red flags and stuff that we saw along the way?

Rachel: I mean there were so many red flags when I just think about, I’ve heard this so many times. You know when people tell you who they are, believe them, and this person was making it very, very clear who they were and how they functioned, and we were actually just sweeping it under the rug. I don’t know, maybe you think they’re having a bad day or, uh, this is an anomaly.

No, this is really how they function. So, you know, tons of red flags. I mean,

Avram: The communication we, we’ve discovered over the last 6, 7, 8 years running the agency, if there’s a big lag time in communication, that’s very regular.

Rachel: Yes.

Avram: It’s a sign of all of the other crap going on behind the scenes. Usually those same people are an operational mess.

Rachel: Right. Well, and then if you think about it, you know, we notice that this person was always the one communicating with us. And if your point of contact as an agency to agency is the owner. Maybe that’s not a good sign. If they don’t actually have someone else in that seat, then it’s very likely that they could b

e stretched thin, don’t have the time, don’t have the bandwidth, whatever that looks like.

And we did see that play out to be true, that we were the ones, left holding the bag, but didn’t have enough information to do anything about it.

Avram: Yeah. Let’s see. I think communication was the big thing. We, we’ve realized that they were lying a lot from the beginning. It was like, okay, so what can we trust? You know, this, this, that, and the other thing.

Rachel: Yeah. And then, you know, we have, we have this core value here at Digital Harvest of Kindness over everything. And that really applies to everything. It’s like delivering a message with kindness. You can fire somebody, you could, break up with somebody with kindness.

You could do all sorts of things with kindness. That’s like the flagship core value of our business.

Avram: It is.

Rachel: We don’t wanna work with people that aren’t kind. And we also give that to them. We wanna be kind to them. And we are, and that was one of the things that, with the communication when things got rough, there was a lot of blame, a lot of just the way that things were said, there was no tact.

It was, it was just unacceptable. You do not talk, I do not accept being talked to like that from a partner that expects me to do something. There was no, hey, I don’t know if maybe miscommunication happened or I don’t know about this, or I don’t know about that. No benefit of the doubt was given, it was just simply, you did this, you did this, you did this, and you didn’t do it right and this is what we’re gonna do to fix it. And you know, just really terrible communication skills.

Avram: That word said unacceptable.

Rachel: Like I have this business right here waiting to give to you, but I’m holding it off. My thought was, that’s bogus. You don’t have a client to give us. And even if you did, we wouldn’t want them.

Rachel: Absolutely unacceptable.

Avram: Those were the words that came up for us right away with that first, you know, outburst. And so. That wasn’t the end of it.

Rachel: No.

Avram: There was more. There was then, you know, escalating threats of different kinds. Basically you better do this or I’m not gonna send you more business.

Rachel: Right.

Avram: That’s like dangling of a carrot.

Avram: And what we realized later was that was all a ploy

Rachel: Correct

Avram: to try to get us back to the table to discuss who knows what. But you know, we’re pretty sure assign us all the blame for their miscommunication.

Rachel: Yeah.

Avram: Eventually though, where did we end up? We ended up in a place where. They withheld payment.

Rachel: Yep.

Avram: They made up excuses about fraud and this and that.

Rachel: Right.

Avram: And then as time went on and we decided not to play that game, we learned that pretty sure there wasn’t fraud.

Rachel: Right, but they actually just blocked it.

Avram: They just blocked payments and stuff. And so they wanted to then try to strong arm us into keeping the contract and coming to grovel for the money.

I don’t know.

Rachel: Yeah. But when we saw that, we’re like, you know what? This is actually great. This gives us an out. If they don’t pay, we’re done.

Avram: And that’s what we discovered in chatting with our lawyer. So where it all ended was us seeking some legal counsel to make sure that we were gonna be okay.

Rachel: Yep. Just cross our t’s. Dot our i’s.

Avram: Yep. There was some verbiage in the
contract that we signed, which in hindsight we never should have signed. That, was pretty restrictive in your ability to get out of the contract.

So we spoke with that lawyer. We had some fears laid to rest and realized in our conversation with him, he’s like, look, if they’re holding payment hostage and they don’t pay. There is no agreement in place anymore. They’re not paying. You don’t have to do anything.

And that’s where it ended.

Rachel: Yep.

Avram: No payment, nothing. And, we have no idea where that left them with their client and that campaign.

Rachel: Right.

Avram: The, terms of the, the contract that we signed, make it, pretty prohibitive, and, um, not a good thing for us to reach out and see if we could help the client in some way.

Rachel: Right.

Avram: It’s just what we were forced to sign, under urgency was not gonna allow us to, um, do what we feel like is the right thing. We unfortunately had to cover our butts.

Rachel: Yeah. Yeah. But really in the end it was, we got the legal advice that we needed. And we came out the other side with a contract for situations like this where we work with another agency that is really, really great. And it will be something that really helps us deliver this great service. It’s the white label service. You know, you, you go online and you, I’ll just use this example of like someone that manages your PPC and it’s a white labeler.

Avram: Your Pay Per Click Marketing.

Rachel: Your Paper Click Marketing. Yeah. And you look at their white label offering, you pay the fee, you follow the rules that they give you, the terms of your agreement, and as long as you follow those terms of agreement and you pay, you have them representing you to do this thing.

But when you violate that agreement or you don’t pay them, you no longer have the service. And that’s what we have now, is that we have a contract where if someone wants to white label our services, they sure can do that. But they will be signing our contract and they’re bound by those agreements.

Avram: Not the other way around.

Rachel: Correct.

Avram: We should not sign an agreement by the other agency.

Rachel: Right. So there was a lot of things that we, in hindsight wouldn’t have done done and we won’t do in the future.

Avram: We also learned something, by the way, this is a good one. Regarding contracts the lawyer shared with us. In domestic disputes and household stuff and people to people. There’s the contract you write and then there’s all the other evidence that comes in about how it was signed. When it was signed. Was it misrepresented.

Rachel: I didn’t understand.

Avram: I didn’t understand it, this and that, but the key thing that the lawyer shared with us is when it comes to business contracts, the law treats them differently.

Rachel: Because they assume that the parties entering into this contract are more sophisticated than just the average Joe or Sally.

Avram: Yes. We found that to be so enlightening.

Rachel: and what they do, tell us what they do.

Avram: They treat the whole quote case if it ever went to court by the four sides of that contract. Right?

Rachel: Meaning what is written you are held to,

Avram: Yes

Rachel: and it does not matter on which terms you signed or the fact that things were misrepresented. You have the right and should seek your lawyer’s advice prior to signing any contract.Do not sign a contract if your lawyer has not looked over it and advised you about the things that could blow back on you.

Avram: Huge, huge learning lesson for us and.

Rachel: And we knew that deep down. But we did feel the urgent. There were, there’s so many. We can talk about all the reasons, but it doesn’t matter at this point.

Avram: Yeah. We, we dodged the bullet. You know, we got really lucky that it ended how it did.

Rachel: Yeah. So the way it ended was, that agreement was terminated.

Avram: Yeah.

Rachel: Due to non-payment

Avram: due nonpayment.

Rachel: and hallelujah. Thank God it was.

Avram: Yeah. There were just so many things that, that happened for us. I just think the big thing of it is, it was so empowering, like, okay, go back and listen to episode 21 of the podcast. You can go to babiesandbiz.com/21 and that’s the episode called Worst Client Ever.

Rachel: Yeah.

Avram: We learned so much from that experience and we shared it in that podcast. That’s similar to here, but I think the takeaways for partnership are a bit different. Because it’s just so much more involved.

Rachel: Yeah.

Avram: And I think, I know you had something to say.

Rachel: I was, I was just gonna say, you know. One of the things that we didn’t actually talk about was what went on between you and me and how we navigated this situation. So what happened is this person had reached out to us and just thrown demands out this first initial communication when they blew up.

And I remember having an opinion about it and how we would move forward. And I remember you having an opinion and I’d love to hear what your opinion was. Just really quickly.

Do you remember how felt?

Avram: I don’t recall it was such a long time ago.

Rachel: Well, you just felt like. Um, this is what you shared with me that, okay, we’ll just bend.

I mean, these are, these are outside of the contract, but we could totally make this happen.

Avram: Sure.

Rachel: And I was like, no, Avram. This is where we make our stand. We are not doing this. This is outside of the contract. We don’t have to provide this and we’re gonna stick to our guns. Because I tell you what, if we bend, this is what our relationship looks like. There are no, in our relationship, in our business, we call velvet ropes. You know how you, you’re gonna get into a club or a queue, and there are velvet ropes that mark where you’re going. We keep clients in our velvet ropes. That means in within our system things are functioning.

And they were well outside the velvet ropes with these requests and I was bringing us back to, no, this is how we function and we’re gonna hold him to it. I know you were a little uncomfortable with that, but when we talked about it, this person was really unreasonable and we were gonna be held hostage this whole time.

So, um, it is an opportunity for you to put your foot down when you see things like this and say no more.

Avram: Yeah. It’s self care.

Rachel: Yeah

Avram: It’s being kind to you. You know, you have to have the courage to walk away

Rachel: absolutely

Avram: From a bad relationship. Because that bad relationship is going to take up your time, energy, and resources, that a better one would be more served.

Rachel: And in the end, you’re the one that suffers because it doesn’t work for you, but you’re not speaking up for yourself. That could be in personal life, that could be in business, whatever that is, have the courage to say no.

Avram: Yeah. What’s really cool about it is that was one of our first conversations about this white label possibility for our business. And since then we’ve had several other agencies we’ve talked with that have been, we know that they’re gonna go really, really well because we already went through hell.

Rachel: Right. And we know what did not work, and now we have a contract that works really, really well. We know the sticking poi
nts, the fine points, all this stuff. So, um. Yeah.

Avram: Experience is definitely a great teacher, isn’t it?

Rachel: It really is.

Avram: Yeah. Well we hope you’ve learned from ours. Check out the show notes, babiesandbiz.com/86, I think. Is this episode number, which one is it.

Rachel: Right? Yep.

Avram: 86. Yeah. And we’re gonna drop some of the resources in there. Rachel talked about kindness over everything, one of our core values at Digital Harvest. We’ll have some stuff on that. There’s a podcast that, uh, I was listening to when we were drafting up the notes for this one from our friend, over at the Power of One podcast, Tim Roberts. He and his friend Michael, shared this episode about, um, business partnerships and red flags.

Rachel: Yeah.

Avram: So that ended up being a big part of like the urgency thing that we saw in our experience came up in their conversation. I think that one’s really worthwhile, whether you’re buying a business, thinking about selling one thing, about going into business with somebody.

Rachel: Yeah. Yeah.

Avram: Those are really,

Rachel: Yeah. You shared with me, you know, they talk about if there’s urgency to just make the deal, well, maybe there are things that when you dig deeper, they’re gonna be not advantageous for you.

Avram: Yep. Yeah.

Rachel: So have the courage to take it slow, you know, if, if the decision is right now, it’ll be right in a week, in a month, in two months

Avram: Yes.

Rachel: But if they’re pushing for really quick, then you’re not in a good situation.

Avram: Yeah, so we’d love to hear from you. If you go to babiesandbiz.com/86, you’ll see the show notes. You can leave some comments and stuff there. You can also find us on social media @babiesandbizpod, Instagram, Facebook. We’re on YouTube. We got a lot of stuff on YouTube if you didn’t know that. Um, and more and more articles being posted to the website.

So it’s not just the show notes and, and what we have here.

Rachel: Right.

Avram: There’s a lot of extra information touching on all the topics that come up here in the podcast. Those are well worth your read and, and checking those things out as well. So with that, we appreciate you for listening to the podcast. We’ll catch you on the next one.

Rachel: Bye for now.