The person you love is so smart and capable, wouldn’t he or she be a great fit as a business partner? Maybe yes, maybe no. Mixing family and business has many potential upsides and downsides. Although family run businesses are common, they are not for everyone. A recent article in Entrepreneur magazine by Carol Roth discussed her experience working with her husband for ten years before they separated professionally but not personally.
- That personal relationship should be built on trust, which is key to a successful business partnership. Finding someone who is a good fit for your business and a person you trust implicitly can be very difficult. Your spouse should be one of the most trustworthy individuals you know and if that person has skills and values that complement yours, a personal and business partnership may be the way to go.
- With a shared perspective, a greater empathy and compassion for your partner, it may be easier to endure the roller coaster with lots of ups-and-downs that comes with owning a business. This can help cushion the pitfalls of business, or at least ease the burden at home from a rough day at the office.
- You don’t need to look far to find a partner. The process of finding, interviewing, screening out and testing out a partner is a tough one with no guarantee that person will work out in the end. You can save time, money and effort by skipping that process.
- Working together and creating something of value together can deepen the bond between you and enhance your relationship.
- While riding the same business roller coaster as your partner gives you shared perspective, it also amplifies problems in business that may become problems at home in your personal relationship and personal problems at home can find their way into the office.
- It becomes very challenging to separate your personal and professional lives.
- It may be more difficult to attract top talent and maintain a strong business culture. Couples are protective of each other and an employee may be reluctant to tell you your spouse/business partner is causing problems.
- Working in the same business puts all your family’s financial “eggs” all in the same basket. If a business down turn limits or ends your income, what’s your back up plan?
- Absence makes the heart grow fonder. Constantly being with each other may be too much for your relationship. Not only will you both be dealing with the same daily grind at work, but the same daily domestic grind at home.
- If one of you worked for another employer offering health and retirement benefits, it could be a huge financial burden lifted off your shoulders.
Every business partnership should have a partnership agreement. That is normally negotiated by parties who, although they may like each other, are not bound by the ties of marriage. That personal relationship could cloud good business judgment when it comes to deciding a partnership agreement that spells out how decisions are made, how the partnership can end and who is entitled to what if the partnership ends. Couples should also consider a parallel pre or post-nuptial agreements that spells out who is entitled to what if the marriage ends (which may or may not result in ending the business partnership).
If you are considering entering into a business partnership with your spouse, or the two of you currently are running a business and want to talk about or have questions about legal issues, call my office so we can schedule a time where we can talk about where you are now, your plans for the future and how a partnership agreement can help both of you now and in the future.