By Rhonda Abrams
Gannett News Service
Small companies used to be called "Mom and Pop" businesses. While that term may conjure a picture of a couple happily working side-by-side, the reality is often far different. Running a company together puts great strains on the business and the relationship.
My very first clients, for instance, were a couple that owned an apparel company. She designed the clothes; he ran the operations and sales. The company was becoming fairly well established, but when the relationship hit a rocky patch, the business started to falter as well. They came to me to develop a business plan, but they also needed someone to help them find a way to save their company and their relationship.
It's not that running a business with your spouse or significant other is impossible. Indeed, I've known couples who've successfully run their businesses together for decades, and the businesses and the marriages thrived. But it's not easy.
A study by the Canadian government of two-earner, self-employed couples showed that those couples who worked in the same business worked longer hours - a total of 87 hours per week - than those couples who each had separate businesses (81 hours) or those who were each employees (74 hours). They were also, on average, a few years older and less likely to live in urban areas than those couples who worked in separate businesses.
So don't just plunge into business with your spouse or significant other - the hip term for it is "copreneurship." Think through some of the ramifications:
Financial security: Your family income will be entirely dependent on one business. As a family, you may have greater financial stability when one spouse brings in an income from a different source.
Time off: If the two of you are the sole operators of a business or the only managers, it may be difficult for you to take vacations or other time away from the business together. In a family emergency, it may mean there's no one to take care of business.
Ownership: Are you clear about who owns what percentage of the business?
Just discussing the topic may bring up sensitive issues.
Contingencies: What happens to the business if the relationship fails? Which partner, if necessary, leaves the company? How will the value be decided and distributed?
In addition to these practical considerations, there are a number of less obvious complications that can arise when couples work together in a business:
Impact on other staff: Let's face it: Few staff members will tell you when it's your spouse who messed up the accounts or alienated a customer. You and staff members will inevitably want to protect your relationship, sometimes at the expense of the business.
Inability to escape problems: What will you talk about over dinner?
Or on rare days off? Most of us want our home lives to provide a certain respite from our work.
I strongly urge anyone going into business with any partner to write a partnership agreement. But this is especially important for couples, even couples who would never have considered a prenuptial agreement.
Rhonda Abrams is author of "The Successful Business Plan: Secrets & Strategies" and "The Successful Business Organizer." Register for her free business tips newsletter at www.RhondaOnline.com.
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