8 Questions to Ask Before Running a Business with Your Spouse

For decades, until their retirement, my aunt and uncle successfully worked together in two different businesses. First, they owned a dry ice company, and then they worked together as realtors. For them, working together was natural and preferred. However, for other couples, working together may damage their relationship and perhaps even lead to divorce. If you are contemplating a joint career, research the ins and outs of running a business with your spouse.

8 Questions to Ask Before Running a Business with Your Spouse

Before you start working on getting your business off the ground, first answer these essential questions.

Do You Get Along?

If you’re the type of couple who regularly squabbles and fights, running a business with your spouse likely isn’t a good idea. The most successful business partners are those who get along and can discuss issues rather than fight about them. If you go into business together, you will be together nearly all day, at home and at work. This can lead to tension and fighting, which isn’t good, especially if your relationship is already prone to it.

Do You Have Complimentary Skill Sets?

Do you each have a different strength that you bring to the business? For instance, my aunt and uncle each brought different skills to their real estate business. My aunt excelled at organization and managing the paperwork, while my uncle enjoyed meeting with people, showing the houses, and sharing the local history and accommodations. Together, they made the perfect team.

Whatever business you’re contemplating, see if you each have complementary skill sets that will enhance what you can bring to the customer.

Do You Know Your Partner’s Strengths and Weaknesses?

Successfully working together may require you to compensate for your partner’s weaknesses and utilize his strengths and vice versa. We all have different strengths and weaknesses, and knowing them and working around or exploiting them can help your business succeed.

Can You Maintain a Work/Personal Life Balance?

If you go into business with your spouse, letting the business bleed into your personal life is a danger. Rather than stopping work at 5 p.m., talking shop at home may naturally occur. Then you run the risk of shifting your relationship from romantic partners to business partners both at home and work.

If you want to successfully run a business with your spouse, you both need to be able to leave work at work and resume your personal relationship outside of work.

Are You Financially Stable?

Launching a profitable business may take anywhere from six months to several years. If you try to start a business while also managing personal debt, you will likely struggle. The best way to start a business is to have solid personal financials—no debt except your mortgage and a healthy emergency fund. If you have a six-month emergency fund, you have time to get your business up and running without the pressure of mounting bills and money struggles.

Do You Have a Plan for Health Insurance?

When one partner is self-employed, she can use her spouse’s employer-sponsored health insurance. However, if both partners go into business together, there is no employer-sponsored health insurance. How will you pay for your medical needs?

Going without health insurance is not an option. One major medical event can bankrupt you. Instead, you’ll need to explore options like state-sponsored or private insurance. However, the policy will likely be pricy. How do you plan to pay for it? Will you have a high-deductible policy to compensate for paying independently?

Are You Disciplined Savers?

Being disciplined savers is essential for two reasons.

Your Income May Be Sporadic

When you’re starting a business, your income will likely be sporadic. My aunt and uncle would sell a house, make a commission, and then perhaps not sell another house for a few more months when they started their business. If you have a business like this, you need to be disciplined savers so you have enough money to carry you through the dry times, which there will be plenty of when you’re first growing your business. In addition, being a disciplined saver can help you stay out of debt, which is preferred.

You Need to Save for Your Retirement

Because you’re self-employed, you won’t have access to a work pension or an employee match to your retirement contributions. Your and your partner’s future retirement depends on how disciplined you are at saving for retirement. When you don’t have an employer offering a match to motivate you, saving on your own may be more challenging.

You and your spouse will need to decide what retirement vehicle you want to utilize, how much you will save in that investment vehicle, and when you will start investing for retirement.

What Will You Do If the Business Fails?

Finally, do you have a plan if your business fails? Of course, you don’t want to think about that, but many businesses fail. According to Lending Tree, “18.4 percent of private sector businesses in the U.S. fail in the first year. After five years, 49.7% have faltered.” If this happens, will you both go back to traditional jobs? Will you try to start another business together? Before you start the business, make a plan for if it fails.

Final Thoughts

Running a business with your spouse can be fulfilling and enjoyable, or it can be a personal and financial disaster that could potentially ruin your marriage. Before you open your business, you and your spouse should ask yourselves these eight questions and carefully determine your answers. Being honest with one another and recognizing that you wouldn’t work well together is okay. But if you answer the questions and decide you would make good business partners, take the leap. You may change your financial and personal future for the better.

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