Best Practices for Running a Business with a Spouse or Romantic Partner
It’s pretty common to see family-run businesses. In your day-to-day life, you’ve probably even encountered companies operated by partners who are married or involved in a long-term romantic relationship. However, these businesses have some serious complications when compared to sole proprietorships.
If you are considering starting a business with a significant other, it is important to work through these details ahead of time. There are both personal AND business issues to consider. Let us highlight a few of the most obvious and awkward things you need to resolve before you sign on that dotted line.
- Division of Responsibility- One of the first, and most important, things you will need to do is clarify your roles and divide responsibilities. Look at strengths and weaknesses and don’t see the division of responsibility as one person acting as “the boss” but rather splitting up work to make the company run smoother. Don’t be afraid to outsource jobs too.
- Mail Issues- You’ll likely want to set up a PO box for “business” mail. This allows you to sit down and review all the mail together. Otherwise, it can be very easy for an important piece of mail to get lost in the shuffle, or for one person to miss seeing something that is important to them, which the other spouse felt was not useful at all. By reviewing all business mail together, you avoid any potential dilemmas or a missed government notice.
- Lines of Communication- Communication is one of the most important parts of both a business and a personal relationship. It is crucial that you constantly keep these open with your spouse. One way that many business partners do this is by having regular meetings where business issues can be discussed in a no-holds-barred manner. Make sure that both partners understand that questions must be asked and issues must be resolved. This isn’t about trying to tiptoe around and avoid hurting feelings--it’s about accomplishing business goals. In between “meetings,” you may find it useful to utilize email, text or another form of written communication to document conversations and keep everyone on the same communication page.
- Business Vs. Non-Business- One thing to remember is that you are still husband and wife (or whatever the role may be) even when the business is up and running. It is vital that you do not let the running of your business change the relationship you have outside of your workday. Find time to spend together doing NON-work things, and also find some alone time too.
- What if Things Go Badly? (Buy/Sell Agreements)- No one likes thinking about the “what ifs” but not only do businesses fail, but so do marriages. Discuss these scenarios in a mature and responsible manner ahead of time and perhaps plan on having a “buy and sell agreement” in place. This would be drawn up by a lawyer, much like a prenuptial agreement. Discuss this with your accountant, if it sounds like something that would interest you, and he or she should be able to help get you going in the right direction.
As always, any type of business or tax matter is highly personal--more so when you are getting your significant other involved in the matter too. Make sure you sit down and talk about matters with your spouse AND your tax professional to make sure everyone is on the same page now and looking forward. By doing that you will protect everyone involved in the matter from any potentially troublesome issues.
Sonu Shukla, CPA writes for CountingWorks, an accounting news and advice website. Reach his office at [email protected].
About Sonu Shukla, CPA, CFP
Sonu Shukla is a Certified Public Accountant as well as Certified Financial Planner. He believes in proactive tax planning and has the skills, education and experience to demonstrate passionately planned financial strategies.
His firm tailors highly efficient tax plans for his small business clients, all in a one on one environment where he and the client can bounce ideas around until every detail is worked out. Located in Orlando, FL, he services all of Florida.
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