Husband-and-wife enterprises are common in the small business sector, with one-third of young Australian firms made up of spousal or de facto couples. But doing business with your spouse or partner spawns a set of problems different to those faced by sole traders or parent–child family businesses. These specific problems can be spectacularly clear when the pressures of running a business collide with marital stresses such as managing mortgages and bringing up the kids.
So what are the most common problems faced by spousal businesses and what are the secrets to succeeding?
Set rules at the start
Love can be blind, but when it comes to starting a business together you should have both eyes wide open. Ensure you discuss and decide on your business structure together as well as ownership issues, day-to-day responsibilities, decision-making and how to finance your start-up. By being clear upfront you’ll minimise confusion and unnecessary arguments down the track.
Recognise different strengths
When dividing the core responsibilities between yourself and your spouse, don’t try to compete for the most powerful or more exciting role. Such claims can begin in a light-hearted manner, but during times of pressure they can boil over into serious tensions and job dissatisfaction. While co-CEOs can work, and couples should always make the most important decisions together (such as strategy and future acquisitions), you should recognise each other’s strengths and use these to guide day-to-day responsibilities. For example, if your partner has a head for numbers, let them balance the books, manage the administrative tasks and take control of sales forecasting. If you have a creative streak, you might be better off handling product design and marketing. By working on different areas of the business, you’re minimising opportunities for conflict and playing to separate strengths.
Maintain work–life balance
Working alongside a loved one can have its benefits, for instance, the ability to work towards a common goal, easy communication and the ability to capitalise on trust. However, the lines between the personal and the business relationship can become blurred, particularly if you’re running a home-based business. It’s not ideal to talk shop during dinner or when spending time alone together, but couples in business together can often find it hard to maintain a work-life balance. Laura Huang, professor at the Wharton School of Business at the University of Pennsylvania, calls this the ‘painful proximity’ phenomenon, where an “annoying sense of closeness” can prevent couples from taking time alone to reflect on issues or decompress.
A tip to maintain a work-life balance is to set aside time when talking about business is prohibited and mobile phones are banned.
Find a third party
Husband-and-wife teams often take things personally when business disagreements arise, so it can often be helpful to call in an independent third party as a mediator. The third party could be a non-family friend to bounce ideas off, or a business advisor, mentor or fellow business owners to provide a fresh perspective on your business strategy. According to Wharton School of Business’ professor Stewart Friedman, a counsellor or advisor usually helps couples prioritise business and family goals and roles.
A qualified third party can also help split a business in the case of divorce. Although it may not be something you want to consider at the beginning, running a business together can often lead to irreparable breakdown of a marriage.
If, however, you are in sync with your partner, personally and business-wise, and an emphasis is placed on clear communications and maintaining a work-life balance, you’re well on your way to running a successful business together.