When Kevin O’Leary was fired from his first job at an ice cream shop as a teenager, he realized he wanted to be his boss.
“I made up my mind that day…. And I’ve never worked for anybody ever since,” he previously told CNBC Make It.
And on CNBC’s new webisode series “Got a Money Dispute? Ask Kevin,” O’Leary gave some advice to another aspiring young entrepreneur.
August wrote to O’Leary with a question about his lawn-mowing business.
“I’m a kid mowing lawns. I have a 50/50 partnership with the other kid next door, even though I do all the bookkeeping and everything else outside mowing,” August wrote, according to O’Leary. “The problem [is], I want out!”
August had a number of complaints about his business partner.
“I have no control over our schedule because I always have to wait for him to finish baseball practice before we can mow. I want to be paid extra for the bookkeeping. But he refuses, because he says he could do it all too – except he doesn’t! I want to be paid extra for the pickup truck I bought for the business, but he says it’s my truck and has nothing to do with him,” August wrote. “How do I end this thing?”
And ending the partnership would be especially tricky, as the business is already generating thousands of dollars, according to August.
“Just so you know, our estimated 2020 revenues is $20,000,” August wrote, according to O’Leary.
O’Leary was excited for August: “Yeah! You got a business, kiddo!” he said. But “you’ve got problems with your partner.”
O’Leary started with a lesson on partnerships.
“When you form a partnership with somebody – and this could be in business or in life, like your wife maybe – you are forming a bond,” he said during the webisode.
“You are forming a relationship, and it’s based on a 50/50 idea. Now, what you’re complaining about is your partner is letting you down, not carrying half the weight. But that doesn’t mean you can just walk away.”
The first option O’Leary recommended was a buy out.
“If you want to end this thing with him, you’ve got to buy him out,” he said. “You’re making $20,000. Maybe you’re going to give him $5,000 of it and it’s ‘sayonara!'”
But if that doesn’t work, O’Leary recommended talking to the partner’s parents to help mediate the deal.
“If he says no, you should talk to his parents and explain the situation. Their son is not cooperating with you, but you want to do the right thing. Help them mediate a deal,” he said.
Whatever the case, O’Leary warned that ending the partnership on good terms was crucial.
“Your reputation is everything, August. Remember, this kid is your next door neighbor. So how you handle it is everything. He’s not going away. He’s living right beside you. You want to wake up the morning after you end the relationship in the business and still have him as your neighbor and a friend.”
Despite this experience, O’Leary encouraged August to “find another partner and build the business.”
“You keep doing the books and keep doing the marketing, and you hire other people to mow the lawns. Now, that’s what I’m talking about! And I know you got it, because you’re already making $20,000. You’re doing way better than the guy who used to deliver papers. Twenty thousand bucks? You can make it $120,000. Make it $250,000.”
Like August, many entrepreneurs started at a young age. For example, O’Leary’s “Shark Tank” co-star Mark Cuban started businesses as a kid, too.
When Cuban was 12-years-old, he sold garbage bags door-to-door to save money for new basketball shoes, he said during a 2019 episode of GQ’s “Actually Me.” In his teens, Cuban resold baseball cards, stamps, coins and local newspapers to make extra cash.
“You need to lever yourself,” O’Leary told August. “You’re an entrepreneur, my friend. I want you to go make it happen.”