Do you dream about starting a business with your spouse? That dream can easily become a nightmare if you don't think it through. Here are 7 questions you need to ask yourself before going into business partnership with your life partner.
- Do we know our own strengths and weaknesses as well as each other's? It's important to be realistic about what skills each of you brings to the partnership. You're probably very aware of your spouse's shortcomings, but are you equally cognizant of your own? When you know your own flaws, you will be better able to figure out workarounds.
- Do our skills complement each other? If you've spent your career in marketing and your spouse in accounting, you aren't likely to step on each other's toes. On the other hand, if you've both worked in marketing for 15 years, you may butt heads about advertising campaigns or marketing budgets. It's a good idea to divide responsibilities and give each person final say over their area of expertise.
- Do we have a shared vision for the business? You won't get where you're going unless you can both agree on where that is. If one of you envisions a fun little lifestyle business, while the other fantasizes about world domination as the next Facebook, you need to have a serious discussion about both business and personal goals.
- How do we manage money? It's common for one spouse to be a bit of a spendthrift and the other to be more financially cautious. This can cause problems in a marriage, and those problems are multiplied when you go into business together. Before you launch a business, work through your differences and find a middle ground you can agree on. That way, you’re not stunting the business by scrimping unnecessarily, or putting the house and the kids’ college funds at risk. Hiring an outside party to handle money matters can help take the emotional component out of business finances.
- How will a business affect our family life? Starting a business is often compared to having a baby, and for good reason: It takes up all your time and energy. Are you both comfortable with giving 110 percent to the business for now? If you don't have children but want to one day, talk about how they would fit into the equation. Will one partner step back from the business to be the primary caregiver? If so, who will that be?
- Where will our startup financing come from? Partnering with your spouse in business gives you added flexibility in raising startup capital. For instance, one of you can keep their day job to support the family while the other one focuses on running the business. Or, you can both work extra hard and save your salaries for a year so you don't have to work during the business’s launch. Plus, you have two sets of friends and two families you can approach for startup loans or investments.
- Do we have a partnership agreement in place? Divorce happens, and if it does, you’ll wish you had put your business agreement in writing. Even if your business and your marriage both last, one of you may want to leave the business or pull back your involvement at a certain point. A written agreement will make things easier when that day comes. It also streamlines the process of bringing on additional partners or investors in the future: They’ll want to see that you take your business seriously.