3 Important Family Discussions to Have Before Starting a BusinessJennifer Peaslee
At Smart Hustle, we like to focus on the entrepreneur or small business owner, but when it comes down to it, starting a business impacts the entire family. The decision to leave a traditional 9-5 with a steady income and venture out on your own has consequences for family and spousal relationships. Growing the business requires time, financial, and mental commitments that can eventually rip families apart. However, if you take the time to contemplate and discuss the issues before starting a business, you can facilitate the entire family’s transition into entrepreneurship.
The issue of what to talk about before or when you start a business was recently addressed in a Kauffman Founders School video. Inc. Magazine writer Meg Cadoux Hirshberg shared advice about three issues she wished she had discussed with her husband Gary Hirshberg when he co-founded and built Stonyfield Farm, an organic yogurt company.
The Kauffman Foundation has a legacy of providing support and valuable information for business owners, and Meg’s advice will help guide the discussion with your spouse and family when you decide to start your own small business. We’re sharing a short recap below, but make sure to click below to watch the entire video.
3 Important Family Discussions to Have Before Starting a Business
1. Personal Issues
One thing to talk about is how the family’s life will change as the entrepreneur is building the business, including lost/unpredictable income and changes to home and childcare responsibilities. You’ll also want to discuss whether the spouse will be involved in the business and how will that work? What role will they have that will match their talents and interests to the needs of the business?
Meg knows firsthand that this is an important conversation to have upfront. As she says in the video, “A lot of times, spouses start working for the company, they just kind of slide into it. And they find themselves doing things that they may not actually be interested in or well-suited to doing, but they just want to help out the business. That can breed resentment down the line.” It happened to her, as she was pulled into the business to help with sales and even making yogurt. She disliked the work and, in the end, she and Gary mutually agreed that her working in the business was not good for their relationship.
That said, Meg does recognize that some couples can work well together if they are able to compartmentalize their personal and work relationships. Whatever you decide, the important point is to have the conversation up front.
2. Financial Consequences
Starting a business will also have huge financial consequences for the entire family, so you have to figure out how you will financially make it work while you’re building the business. Is there a way for the spouse to supplement his or her income? What will have to give – will it mean fewer vacations, a smaller budget for home repairs, or something else?
Other considerations include how vulnerable the family’s assets and the spouse will be if something goes wrong. Will the house be used as collateral to get a loan? How can you insulate the spouse in the case that something happens to the entrepreneur or the business?[Tweet “Make sure you have these 3 important family discussions before starting your own #biz.”]
3. End Game
Finally, it’s wise to discuss the direction and goals for the business. Will the entrepreneur be starting and then staying in the business, or are they planning to sell at a certain point? What is the exit strategy, and what is Plan B if the business fails?
As you’re having these discussions with your family, Meg says that “Truthful answers, it’s important to remember, are not always accurate answers.” That means that there are too many unknowns, and things will probably change, so you have to be a little flexible. However, if you focus on having honest family discussions before starting a business, you will be aware of the potential issues and pitfalls before a problem comes up.