Is It a Good Idea to Start a Business with Your Spouse or Partner?
In sickness and in health…‘til business ownership do you part? Spouse and partner-owned businesses can make or break your financial future — and your relationship. While there are no definitive statistics on the number or success rate of businesses co-owned by romantic partners, a report looking at women-owned businesses from the Small Business Administration’s Office of Advocacy shows that 2.5 million U.S. small businesses are owned equally by men and women, many of which are presumed to be spouses. While this data doesn’t take into account marriages, partnerships or same-sex couples, experts agree that couple-owned businesses are on the rise.
But that leads to the question: is it a good idea to start a business with your spouse or partner? It really depends on numerous factors, including the personalities and work ethics of the individuals involved, the business strategy and model, and the relationship between the two partners. We asked experts who have firsthand experience with spouse and partner-run businesses for their thoughts, and they gave us some key insights into the benefits — and the pitfalls — of owning a business with your significant other.
Benefits of Running a Husband and Wife or Partner-Owned Business
Benefit #1: You Already Know the Ways You Complement Each Other
One partner is great at fixing things around the house, while the other is a whiz at managing the finances. One excels at resolving conflicts, while the other understands when to let go of the small stuff. The same trade-off that happens in your relationship also applies to the way you run your business, especially when it comes to skills and areas of expertise.
Jill Santopietro Panall, owner of 21 Oak HR Consulting, sees numerous coupled clients, and she finds that the most successful are the ones who have mastered the art of the give-and-take. “I rarely see two spouses who have exactly the same skill sets, so what they have found complementary in each other as people often can be complementary in business, as well. For example, if one spouse is excellent at sales and marketing and the other has a strong handle on production, it can really drive the business forward efficiently.”
Benefit #2: You Know How to Resolve Conflicts
Disagreements with business partners can cause a lot of tension, but if that partner also sleeps in the same bed and eats breakfast across the table, the stress can grow exponentially. However, a healthy relationship, in which you and your partner have already worked through how you manage arguments and differing perspectives, can translate well to how you run your business.
Alex Davis, half of the creative team behind Ryan and Alex Duo Life, a wellness and lifestyle company, says the key is to build a strong foundation in your romantic partnership before you can expect to build one in your business relationship. “If you have a healthy and strong relationship, you’ll have a healthy and strong working relationship. There’s already a high level of trust, communication and — when needed — forgiveness.”
Benefit #3: You Share the Same Values and Goals
After you’ve been together for a while, you learn what’s important to your partner. You understand what makes them tick, and you discover how you align in the values and goals you build for your family. When you find a shared motivation, you’ll also find common objectives that influence how you jointly operate your business.
Thibaud Clement co-owns Loomly, a brand success platform, with his spouse, Noemie. He says that when you want the same things, you’re more likely to work together to achieve them. “Values are the foundation of everything because they guide all decisions you make, whether you realize it or not, and you can only compromise on your values for so long. Having shared values means that you are more likely to take a path that your significant other would agree with (and vice versa) should you need to decide without your partner.”
He goes on to say, “A business, just like a couple, is a team. Few things unite teams like common objectives. Making sure both spouses/partners pursue — and are rewarded for — the same goals is crucial, as it incentivizes the couple and the business to succeed and minimizes unhealthy competition.”
Benefit #4: You Might Get a Tax Break
Working with your “person” every day and saving money? Who wouldn’t want that? Tax benefits are available for married couples with a business, but it all depends on the structure and the way you file. The biggest monetary benefits are available to couples in which one acts as the owner (sole proprietor) and hires the other as an employee. The caveat here is that the employed spouse cannot have any part in the decision-making around the business.
If that won’t work for you, your best bet is to form a partner LLC, with each spouse acting as an equal owner in the business. If you’re wondering how this will impact filing come tax time, the IRS has a guide specifically for married couples in business together.
Pitfalls of Starting a Business with a Spouse or Partner
Pitfall #1: Mixing Business with Pleasure
There’s a reason there’s an adage about the dangers of this. When lines between work and personal life become blurred, it can be difficult to maintain a healthy relationship…or a healthy business.
Panall says you need to be prepared to spend a lot of time together and keep the lines of communication open. “Business pressures and worries can leak into the family life and cause challenges in the partnership and I find that if the spouses are not great communicators or don’t have a really solid business plan, the business can stall or flounder while they try to get on the same page.”
Anais Bock, owner of Bullsh*t Monsters, agrees. “Business easily bleeds into personal spaces. We’ve had to create rules such as ‘no business talk before breakfast or in bed.'”
Pitfall #2: Failing to Assign Roles and Responsibilities
You know which one of you takes out the trash each week, and which one pays the electric bill. When one partner fails to fulfill these roles or doesn’t know what they are responsible for, the harmony in the home is disrupted. Assigning roles is even more important in a business setting when dropping the ball can mean financial hardship.
Barbara Chancey, owner of Barbara Chancey Design Group, says setting roles and designating responsibilities early on is key. “Businesses owned by spouses often fail when roles are not clearly defined, and power struggles soon erupt over money, jealousy and power. Couples often forget the early years and let money go to their head. They start off hardworking, humble and hopeful. Then one day, they begin to lose sight of who and what helped get them there and believe it was solely their own doing.”
Pitfall #3: Not Planning for What Happens in the Event of a Split or Death
No one wants to think about their marriage or relationship ending, whether it’s due to divorce or to the passing of one partner. However, if you’re venturing into business ownership with your partner, it is imperative to plan for the unexpected, even when that planning involves painful emotions. Forming an LLC will help protect your personal assets, but it’s also wise to consult with a legal expert to ensure agreements are clearly documented and accepted by both partners about what happens to the business in the case of divorce or death.
Sandy Stein, owner and president of Finders Key Purse, experienced the strain of operating a business with her husband firsthand. He didn’t support her vision or share her goals until she achieved success, but by then, it was too late. “As you can guess, our marriage is no longer, but my business is. I believe that we were too close as a couple to be able to truly understand each other’s position in the business world. A stranger might have appreciated my unique business plan, but my husband could not.”
Remember that before you make this decision, it’s okay to say no. Ben Taylor, founder of HomeWorkingClub.com, says careful evaluation of your relationship before you launch your business is key. “The most important thing is to be really honest with yourself about the relationship dynamics, and trust your gut instinct. If you have a fiery relationship, adding a business partnership to it is unlikely to end well!”
Ultimately, starting a business with your spouse or partner is a deeply personal decision based on your relationship, your goals and your shared values. It’s not the right choice for every couple, but when it works, it helps you build a strong business…and a stronger marriage. When you’re ready, downloading our Start a Business Guide will provide you with everything you need to get your partner-owned business going.