Larry Finnson and Chris Emery haven't always had a sweet partnership. The high school buddies made it big with Clodhoppers, a candy confection originally made by Chris' grandmother, which made its way into Wal-Mart stores all over North America.
But after the duo sold their company in 2006 to Brookside Foods, they broke up.
"It was an ego thing," says Chris, the tall one with the cool guy persona. "Neither one of us could check our egos at the door."
"When you're young it calls for a fist fight," jokes Larry, the less tall one with the Hollywood smile. “But when you're over 40, that doesn’t work.”
As these Winnipeg natives can attest, partnerships are often a key ingredient to success in business. Friends who share the same goals and have complementary strengths often find that one plus one adds up to more than two — they can achieve things together they never could have done on their own.
But when partnerships turn bad, they not only ruin friendships but also finances. Many advisors recommend not taking on a partner if at all possible, in order to avoid turmoil and unnecessary legal expense.
But Chris and Larry are huge advocates of the power of partnership, evidenced by the fact that they’re back in business together. The pair are appeared on Dragons' Den on Wednesday Feb. 8, pitching their new candy collaboration, OMGs.
"Partners help you," says Chris simply. "Collaboration can lead to great achievements."
There are definitely lessons to be learned in the journey these two have taken. For starters, they personify the idea of bringing different areas of specialization to the table. Larry supervises production; Chris handles sales.
Both have always been camera-ready though — they were featured on CBC Television’s Venture program several times, first handling a financial crisis (their bank called their loan because they feared the guys couldn’t deliver on the huge orders they’d hustled up) then later, heading to Wal-Mart’s head office in Bentonville, Arkansas, to make the big sale.
Their combined entrepreneurial energy led them to distribution in Zellers, Save-On-Foods, Shoppers Drug Mart, and Costco, to name a few. Revenues grew from $50,000 in 1996 to $3 million in 2001.
But when their investors wanted to buy them out in 2006, Chris and Larry let go — of the business and each other.
"Chris went with Brookside, the company that bought Clodhoppers," says Larry. "I tried a bunch of things, marketing hardwood, marketing water, but I didn’t love it. I was just going through the motions."
"We really missed working together," says Chris. "We missed doing something that we really loved to do. We did that for 10 years. Then we lost that. You have it and you lose it — wow, does that leave a big hole in your life."
The pair had signed a five-year non-compete agreement with the buyer of Clodhoppers. When it expired last year, they got together and started talking. The result is OMGs, a chocolate-covered candy that they believe will be even more popular than Clodhoppers.
They’ve set up a 7,000-square-foot factory in Winnipeg, and hope to launch OMGs nationally very soon.
"Partnerships are like a marriage," says Chris. "And if you break up but then you get back together, then it’s even better."
Their breakdown isn’t unique though. Partnerships can often go sideways, says Dave Cook, a partner at KPMG Enterprise who advises entrepreneurs on strategy.
"It can be messy," says Cook, who’s been called to testify in court actions between partners. "In the early stages of a business there’s often a lot of excitement about the idea. And the busier you are, the easier it is to overlook the challenges that are embedded underneath. Sometimes the issues don’t come up until later on."
Cook advises clients to draw up a shareholders’ agreement at the start of a partnership. This type of document covers various eventualities and conditions, such as how the financial and decision-making aspects of the company will be handled, and what will happen if one partner wants to exit.
"Bringing these things up when you’re in the midst of entrepreneurial fervour is very much like bringing up the pre-nup when you’re dating," says Cook. "It's a buzz-kill!"
But he insists that just the process of working out those details early on can be helpful to the business. Once the agreement is done, Cook recommends putting it away in a drawer and not referring to it until when and if it’s needed.
As for "the candy boys" (as they came to be known by the Venture team), they do indeed have a shareholders' agreement — and a new arrangement. During their first partnership, Larry was the president and Chris was the vice-president. Now they’re both "co-presidents."
And they observe the 24 hour rule: if they have a disagreement, they press pause and take a break for a day, so that they can come at the issue again in a different frame of mind.
“In every partnership you're going to have conflict,” says Chris, “or at least a difference of opinion. So how you go about solving that conflict is absolutely key.”
“Yeah,” Larry agrees. “After 24 hours I can come back and say ‘Chris had a good idea. Even though I didn’t think of it, it’s still a good idea.’”
“It's our biggest asset now, our respect for each other,” says Chris.
Awwwww! What a touching thing to say. I wonder if I’ll hear anything quite so encouraging when I start interviews for next week’s column? I’ll be talking to business partners who are or were married.
Dianne Buckner has reported on entrepreneurs for two decades. She hosts Dragons' Den on CBC Television and is part of the business news team at CBC News Network.