Have you ever considered going into business with your husband or wife? Perhaps you and your spouse have long dreamed of opening a business together, or maybe you just started discussing the possibility. Or perhaps you are considering quitting your full-time job to partner with your spouse and focus solely on his or her business, or vice versa.
Running a business is difficult in and of itself. Running a business with your spouse brings even greater challenges because not only is your business on the line, but so is your marriage.
That being said, you and your spouse can have great professional and financial success, but only if the arrangement is right for you and your relationship. It’s critical that you look at the situation from all sides before making any rash decisions.
Defining what arrangement works for you and your spouse rests on evaluating the pros and cons of running a business together. As with every business, the needs of every relationship will vary, so consider how the following will affect not only your business but your marriage as well.
PROS of Starting a Business With Your Spouse
1. Trust Already Exists
You’re married, so the trust between the two of you should already be strong. You know that you can depend on your spouse to do the job; you have faith in him or her to do what’s right for the business, and you can entrust him or her with confidential information.
On top of that, you can also serve as a source of support for one another, which is a rarity in the business world. This support can be next to impossible to cultivate with other people, even your close friends or other family members.
2. Few Surprises
With a new partner or employee, you will need to warm up to the person, slowly build rapport and learn how to work with him or her.
However, especially for couples that have been together for a long time, you should know each other very well. You know each other’s personalities, strengths and weaknesses, moods and mood swings. Furthermore, you know how to communicate with each other to avoid conflicts, as well as how to work through conflicts when they inevitably occur. Together, you can immediately jump in and tackle the work without taking the time and effort to build a new relationship.
3. More Time Together
Many small business owners spend 80 hours a week on the job. When one spouse pulls those hours—leaving the other spouse to manage the household, work another job, take care of children or other responsibilities—the marriage often suffers. So much separation can lead to couples growing apart, which can even breed resentment as one spouse feels he or she carries more of the load than the other.
However, when both spouses are devoting so much time each week to the business, it is easier to evenly share both work and home responsibilities. As an added bonus, the couple also gets to see each other more often.
4. You Are in It Together
You can empathize with one another and show compassion to each other when you deal with the ups and downs of business. Furthermore, you can celebrate your successes with one another. That’s a bit harder to do when one spouse is always on the outside looking in.
5. Increased Appreciation for One Another
As you and your partner watch each other tackle the challenges of business ownership—whether that is appeasing a difficult customer, creating a successful new product, crafting marketing campaigns, etc.—you grow to appreciate each other’s skills outside of the normal parameters of the marriage. It builds mutual respect and appreciation for each other, which increases the strengths of both the working partnership and the marriage.
6. Added Flexibility
It is much easier to manage personal responsibilities when the two of you work together. You can establish or adjust schedules as needed so that they work for you, rather than having to adhere to the strict office hours imposed by most businesses.
7. Tax Benefits
If a married couple operates a business as equal co-owners, the two spouses can file with the IRS as a qualified joint venture and prepare just one Schedule C or Schedule SE instead of two income-tax returns for the business. A married couple can also file two separate IRS Forms 1040 to offset the high self-employment tax and to gain credit for Social Security and Medicaid taxes.
Additionally, the IRS allows you and your spouse to operate a business as co-owners, but you don’t have to claim him or her as an employee. So as you pay your spouse’s salary, you lower the business’ income and the self-employment tax on the income. You also aren’t required to cover a payroll tax for your spouse if you operate as co-owners. Finally, as co-owners, you are permitted to deduct medical insurance coverage for your entire family as a business expense.
CONS of Starting a Business With Your Spouse
1. Married People Argue
It’s natural and inevitable for two spouses to argue about everything from when to start a family, to what to have for dinner. But if those arguments carry over into the workday, it can wreak havoc on your productivity and sap your energy.
Arguments will likely arise that relate to the business. If you haven’t yet learned how to manage disagreements without them turning into full-on fights, then you aren’t ready to run a business together.
2. It’s Hard to Separate Work From Life
Many small business owners struggle with work-life balance, but it is especially difficult for spouses who own a business together.
The stress of the business can seep into your personal life and leave little time for connecting and having fun with your spouse. In addition, it can be difficult to take vacations together since someone will always need to be available to run the business.
You’ll need to set work-life boundaries and keep lines of communication open in order to ensure that both of you remain happy with the situation.
3. Financial Problems Could Arise
If you and your spouse are fully invested in the business and have no other outside income, you could find yourselves in serious financial trouble when the business experiences a downturn, which is likely to happen to new companies.
If one spouse is otherwise employed full-time, he or she could keep you afloat until business picks up again. But if both of you are working in a failing business, then you and your partner will have a more difficult time recovering from poor returns.
Before making the decision to start a business with your spouse, ensure that you have plenty of savings or other assets you can access should you need the money.
4. Someone Has to Be the Boss
Even if you vow to split all the roles and duties down the middle, it’s likely that either you or your spouse will naturally step into a leadership role. Employees will look to that leader first for direction, and ultimately one spouse will end up taking orders from the other.
If you don’t establish clear expectations and boundaries early on, that imbalance of power can hurt the marriage, as one spouse may feel bossed around or the other feel that too much responsibility has been heaped on him or her.
5. Spouses May Have Conflicting Goals
While you might want to grow the business just enough to sell it and profit, your spouse may want to maintain the business through retirement.
Big differences in business philosophies can kill your business partnership and your marriage. Before you open a business, sit down together to align your goals and ensure that you are both on the same page.
6. Your Family Could Suffer
If you both are always working or focused on the business, your kids could be getting the short end of the stick. In most families, one parent steps in and picks up the slack for the other parent as needed, but if both of you are totally preoccupied, your kids will suffer.
It’s possible to balance both work and life obligations, but doing so requires open and honest conversations between you and your spouse, as well as preparation and organization to manage both work and home obligations.
If your business needs more hands to help it run smoother, consider hiring employees who you trust to manage the business in your absence, and surround yourself with family and friends who can help out with your kids from time to time.