by Jacqueline Hall on 27 January 2020 11:58am : 342
How does a couple build a business together whilst navigating the landscape of life partnership? Life happens inside and outside the business, and the commitment’s strength will be tested. Is love and respect enough to hold it all in place? Honest, open, transparent conversations will help to remove as many stumbling blocks as possible before or near the start.
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Six points to consider
- As a couple in business the physical, emotional and intellectual investment often isn’t a straight 50:50 split, neither is the monetary contribution. Recording how much each person has contributed in all areas before the business’s launch will help to clarify contribution ratios. It can be a good way of recognising percentage ownership and agreeing the financial rewards to be received.
- Discussion about how the working relationship might be conducted is important. One partner may gradually feel their viewpoint isn’t heard, or they’re unable to escape business talk. I’ve often found that family businesses don’t, for example, set boundaries for when and where business issues can be discussed, impinging on the business of family.
- Your partner can enter a binding third party agreement without your consent. Do you want either of you to have that level of autonomy? Be clear about the type of consent that must be obtained before either one ties your business into obligations with third parties.
- How you as team make decisions can have massive impact on your relationship within and outside the business. In the event of a strong difference of opinion, how will you resolve matters? I suggest a decision-making process be agreed in advance. This will help your relationship and business to operate with clarity and provide less opportunity to create stalemate situations.
- What if your difference of opinion becomes a dispute? A mediation procedure is a means of bringing resolution. It will give you a tool by which serious disputes can be resolved, other than cold-shouldering each other.
- Sometimes its death – physical or through divorce that brings cessation to the business partnership. It’s hard to deal with personal and business griefs at the same time. I advise couples to protect each other and their business by agreeing up front how such a situation ought to be managed.
How do you ensure these conversion points become part of your family business’s operational management? A Partnership Agreement covering some or all the above points, will protect you, your love/business partner and the business. Even if you’ve been operating for months even years without one, it’s not too late. Whatever the stage of your business adventure, this important governance document can help you to protect it from internal ruptures.
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