Want to run a business with your spouse?

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Build yourself a safety net to help manage the financial risks

My husband is my business partner.  We are among the few people who find their spouse to be a partner in marriage, parenting and yes, business.

Running a business with your spouse has challenges and benefits.  Just like any other business owner, you put blood, sweat and tears into your businesses and work crazy hours.   You can benefit from having a partner whose passion is well matched to your own, and understands the family sacrifices needed (often at a moment’s notice) to deal with the unexpected. 

Before you open shop, there are some other questions to consider.   Do your skill sets compliment each other?  Are you and your spouse well matched for business?  Will you make each other crazy?  We completed a business and teamwork profile before taking the leap.  It can be pricey, but a profile can cost you less in the long run than finding out the hard way that you aren’t a good business fit.

One of the greatest challenges, is a financial one.  Your family’s financial picture is dependent on the success of one business.  You have put all your eggs in one basket so to speak, and that carries with it some additional risks.  The average double income family can generally depend on drawing from two sources of income.  In this case, if something happens to one source of income, you always have the other to rely on.  Not so with the family run business.  It’s all or nothing.

To help manage this risk, there are some things you can do to build yourself a safety net as you start your business endeavour.  While you may not be able to use all of these, you may wish to consider some variation of them and how they could fit with your plan. 

  1. Have a solid business plan.  Link it to your business financial plan.  Link that to your personal financial plan.  These three plans should work in concert with one another. 
  2. Don’t jump in with all four feet.  If you are able to, have one spouse work full time in the business to get it off the ground and have the other keep a salary job and work on the business after hours for a while.  This will allow your family the safety net you need to pay the bills. 
  3. During this time frame, if you are able, try to work your family budget around the income from the spouse still bringing in a salary.  This will allow any profit from your business to stay in your business to continue to grow your operation and/or build equity.  Retaining earnings in your business is a good way to prepare yourself for the time when the second spouse drops the salary and joins the business.  Personally, we did this for 5 years to create more financial stability, but you can tailor your timeframe to suit your specific needs.  It will be challenging, but stay focused on meeting the milestones to your end date.  
  4. Consider any benefits the salaried spouse may have, like a pension plan, group RRSP, medical and dental to be sure this is truly a good move for your business and family.

Get a good start to safeguarding your family’s financial security as you embark on your business venture, and you will need to consider many other things along the way.   Maybe there should be a handbook on “How to run a business and still stay married” – Ah, but that’s an entirely separate topic altogether.

If you are both entrepreneurial by nature then you won’t be intimidated by the risk or the hard work and the payoff can make it all worthwhile.


Link to column as it appeared in Elgin This Month August 2011 edition (page 5)


Stephanie Farrow, B.A., CFP.,  Stephanie has over 20 years experience in the financial services industry, a diploma in Financial Planning from the Canadian Institute of Financial Planning, and Certified Financial Planner designation.  Stephanie has been writing a financial planning column for the local business magazine Elgin This Month since 2010 and hosts our Farrow Financial Blog and Twitter @farrowfinancial.  Stephanie and her husband Ken Farrow own Farrow Financial Services Inc., are busy raising three young children and actively involved in the community. Our Farrow Financial Services Team.