According to the Small Business Administration, 90 percent of all U.S. small businesses are family owned. Of that, an estimated 14 percent or roughly 1.2 million businesses are husband and wife owned. With an average longevity of 24 years, these partnerships can survive and flourish.
An entrepreneurial partnership is your work marriage. Whether married CEOs or best friends from school CEOs, drawing clear lines between the business and personal relationship as well as understanding each other’s strengths and weaknesses breeds success.
Understanding Personality Types
Everyone has strengths and weaknesses, along with different communications styles. The key lies in truly understanding your and your partners’ behaviors and adjusting accordingly. Social scientists like Carl Jung and the mother/daughter team, Myers & Briggs have researched how people perceive the world and make decisions. Using tools that assess psychological and personality preferences to specific questions and situations, we can categorize people into anywhere from four to sixteen defined personality types.
When working with clients, we use a Disc Assessment to identify personality types and improve work productivity, teamwork, and communication. The assessments can be a real eye opener and help identify mismatches in “right talent, right fit.”
Clear Delineation of Responsibilities
About 30 percent of our clients are husband and wife business owners. Usually one is a treating therapist and the other is not. However the delineation between clinical and non-clinical is not enough of a differentiator when defining responsibility and roles. You both need to be very clear about the needs and goals of your business and divide your responsibilities based on strengths, talents and personality traits. Compromise and do not micro-manage the other.
Being married to your business partner can be one of the strongest leadership tools your company possesses. But if you are not in sync on the job, it will be easier for your staff to come between you. Above all keep work matters at work and don’t carry the business over into personal time.
Having a separate work space also helps many of our clients. Some of the more successful partnerships are when one partner works from home and one works in the office. We also see a slight advantage when both partners are therapists too. They are usually in agreement on their clinical product and just need to work on the business side.
I can’t say it often enough…having a written strategic plan is critical for so many reasons. For married partners it is especially important to bring in a third party facilitator to assist with your strategic planning process. It’s not too late to build your 2012 strategic plan!
Financial Implications for Married CEOs
Should you set up the business with a 50/50 ownership? 80/20? Should one spouse employ the other? You may want to take a look at each person’s credit rating to assist in your decision making. If one or the other has bad credit, fix it now. Looking down the road when your business is growing and you need to secure financing, the last thing you want is to be turned down for a loan.
Most banks require that anyone with 20% or more ownership in the business be included in the credit and underwriting portion of the loan request. If one partner has poor credit and one has good credit, make the latter the majority partner. If you’ve already established a 50/50 partnership you can make a revision to the business ownership structure. Just ask your financial consultant or attorney.
Having your financial house in order is critically important for any sale transaction.