Let’s put a scenario here:
A romantic couple, Arthur and Maxine, who have been together for more than 20 years, have called it quits. Worse than personal, the effect of separation redounded to their business, Wow Trailers, which sells concession trailers nationwide. Business and pleasure never really go well, does it? Not only does it apply to romantic relationships, but to long-standing friendships as well. There is a saying that there are no permanent friends (or lovers); only permanent interests. In this case, business could go on even without personal attachment. There is a famous saying that businesses last longer than relationships, and that’s where the problem starts when you mix the two.
According to a survey back in 2007, around 3 million companies are owned and managed by married couples. The figures could have more than doubled since then.
A consulting firm calls such business/marital partners “co-preneurs.” Some suggestions it offers co-preneurs are the following:
1. Avoid competition
2. Schedule business discussions
3. Don’t be afraid to disagree
4. Accept that disagreements are normal
5. Take time away from each other
6. Don’t sacrifice everything for business.
There are telltale signs of trouble as soon as personal interests and relationship clash against business. Here are some of the first signs of trouble:
1. Poor communication
2. Poor collaboration
3. Not wanting to hear the other’s input
The case of Wow Trailers is a classic story of man and wife no longer working effectively together however hard they try. Losing trust in one another could be a main source of the problems. For example, Maxine never informed her partner about her decision to consult a third-party company for business evaluation. Common business decisions such as where to locate their office, or how many people to hire or fire, and who should be responsible for this and that function have become a big source of conflicts between them.
A consultant says that as long as a business is doing great, money keeps coming in, and results meet expectations, then everything is rosy. The minute something goes wrong, sales targets not reached, customers not coming back, then that is the time employees start doubting their future in the company. They lose their confidence in management and eventually this affects the entire organization’s attitude. It then becomes the source of mistrust between romantic and business partners questioning each other. Someone is not doing his or her fair share of responsibility.
However, if a business potential is out there and it is inevitable for partners not to get into it, they should ensure there is constant communication, cooperation, and consent in every decision they make. They should have a written and signed-off agreement to avoid the blame game when something goes wrong. It may seem simple but in fact the biggest challenge for them.
Likewise, there should also be an exit plan that is mutually favorable to both of them. A consultant says that a big mistake that rocky business relationships go through is when partners do not have an exit plan.
Such an exit agreement should include terms on how one partner may get out of a deal, how to sell or transfer ownership or position, or in what ways the other partner can legally buy out the other.
One major issue that the partners should look into is how they are perceived by the staff, employees, and their clients.
In the case of Arthur and Maxine, their loss of trust in each other greatly affected their professional performance and as a result, eroded the employees’ morale. It can be difficult to separate business and relationship, and it is even more challenging to leave employees out of the quarrel. Almost always, employees get caught in the middle, and it is difficult to shield them away from it.
That is why, having a third-party accounting firm or CFO services do your financials is crucial, especially if you choose to mix your relationship and business. If you do this, at least you do not get to put yourself in a dilemma when these unexpected turnarounds happen.
What then should one look out for in a business partner? It is best to put emotions out of the picture because adding this to your decision-making process can confuse you on what you think is best for your business. Avoid partnering with people whom you simply want to partner with because you like their company. You must be specific with the skills you need, and the personalities that you put on the team. A lot of restaurant businesses fail because of friends coming together to put up an enterprise, then they realize along the way that many members are not fit for the role.
Get someone who has something new to bring to the table. That someone should have a specific unique skill or core expertise. It could be in technology. It could be in sales and marketing. It could be in financial management. Or it could also be in strategies. Whatever that is, there should be an incremental value to that contribution someone in the team to continue the partnership.
As for accounting, it is best not to mix personal relationship and business. When you put money into the picture, the relational dynamics change. You can either hire an accountant or outsource this part of your business, so you get to future-proof your financials.