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7.31.2011

How Successful Are Couples in Business?

    
Couples in Business
     As the economy has become more challenged, I see this trend rising...wives who help out with husband's small company to save money and utilize resources, partners that perceive financial advantage in living together and combining savings to create a side business, down-sizing that has reduced a large staff to a few key players wearing many hats, or a layoff that naturally leads to the recruiting of your spouse/partner.  

 
     On the surface, these all sound like practical business ideas, but, are there serious risks to the intimate relationship?
     How will co-owning a business interfere with romance and passion? Will a married couple approach a business venture with similar styles, or, are they more likely to "take things personal" and come away from day to day business tasks with hurt feelings? Do the costs outweigh the benefits? 
     Small Business Association reports that 50% of new businesses fail within the first year, but we don't have a more specific breakdown of family-owned businesses within that percentage, I'd guess it's very high.These are relevant issues and worth meaningful contemplation.

In Small Business Management, Michael Ames gives these reasons for small business failure:
  1. Lack of experience
  2. Insufficient capital (money)
  3. Poor location
  4. Poor inventory management
  5. Over-investment in fixed assets
  6. Poor credit arrangements
  7. Personal use of business funds
  8. Unexpected growth Gustav Berle adds two more reasons in The Do It Yourself Business Book:
  9. Competition
  10. Low sales
     As in all healthy partnerships, communication is the necessary foundation to setting goals, problem solving, and  recognizing both strengths and weaknesses. 
     Many business owners working out of their home have created some clever ways to distance themselves from the "work day" by 1) closing the door of their home office or creating a separate and distinct space from home life 2) unplugging from phones, and 3) setting a limit for work hours (i.e. no work after 6:30pm).
     Finally, the hardest decision that any business partnership must confront is this: when to get out. If personal funds are keeping a small business afloat -often the case in our current economic struggles- two individuals within the couple dyad will typically have varying degrees of tolerance for financial distress and loss. Each partner may have strong feelings and beliefs about retirement savings, cashing out a 401k, or stashing aside college funds for children. 
     Counseling, or mediation services, may be the best way to thoughtfully discuss how working with your lover will impact both your relationship and your earning life.
     And, if you are a business owner working with your significant other in a successful manner, I think an e-book is a terrific idea; nothing like that out there!
*****
A great book for new dads!