If you are starting a new a business, prepare your family for a trying time. Worries over money, possible failure, and the problems of a new venture, can place strains on the stability of any family.
If you are about to face such challenges, you and your spouse better be best friends, sharing a stable and supportive relationship. Because, if you frequently fight, disagree over lifestyles, or money, how will you be able to concentrate on your business? Unless you are super-human, family problems can drain you of your optimism and energy. Your loved ones will soon find that the demands of the business will crowd out everything else for a while- it will test the bonds of your union.
Be smart- before quitting your job- be sure you and your spouse understand the risks and sacrifices you will face. If either is dreaming of instant riches, most likely you will be disappointed.
Take the story Ken and Mary, who after starting their electronics distributorship, found their business styles incompatible. Ken was insistent on expanding regardless of cash flow, whereas Mary was cautious- disliking unpaid bills. It was characteristic of Ken- regardless of Mary’s objections- to spend at will- telling her to stop worrying as he knew best. Within a few months, short on cash and too much debt, they filed for bankruptcy.
I suggest as you create your business plan make it a family plan. Use it to lay the foundation of a family understanding of what lies ahead. Your goals must be realistic – you do not want any unpleasant surprises because of fantasy. It is wise to have the family share in establishing the goals, as teamwork and trust can make the difference between failure and success.
I knew a young couple that started without a plan, and little understanding of business. As they were immature- demanding instant gratification- it was beyond them to postpone pleasure. Before long, one grew impatient, insisting on a prosperous lifestyle including European vacations- now. The argument was- we deserve it! They were not prepared to sacrifice on behalf of the future success of their business. It did not take long before both marriage and business failed.
Just as divorce can destroy a family’s financial security, it can bankrupt a family business. Divorce proceedings- which can be messy- may cause the business to suffer the lack of leadership as the couple is preoccupied with their marital problems. It will cloud the future of the business-creditors and employees may become nervous-customers may speculate about its’ survival. The morale and motivation of everyone associated with the business will be effected.
A failed marriage raises a number of questions. If there is a buy- out, how do you determine a fair price? How do you strike an agreement amongst bitterness and distrust? And what about the problem of getting the money, do you borrow or sell a piece of the business? If you borrow, can the business handle the debt? The more difficult the divorce and the longer the lawyers fence, the more likely the business will fold.
Let me tell about an unfortunate couple that lost a profitable business because of adultery. After months of searching throughout New England, they found a neglected delicatessen in a small New Hampshire town at a reasonable price. By working 16-hour days and saving every possible dollar, they managed to make a success of it. As they prospered, they added to their business with a second location, followed by a small restaurant and a beauty parlor. By all appearances, it looked as they were well on their way to success- he drove a new Corvette- she decorated their new home. They worked hard and were popular in the community. But, for whatever reason, the husband strayed with an employee, and at a careless moment the affair was discovered. Not surprising, the separation and divorce proceedings were bitter. Stupidly, during the separation, the husband continued his- now public- relationship with the employee. With customers aware of the situation, many boycotted the deli and restaurant.
Within months, the restaurant closed, the second deli was sold, and the beauty parlor liquidated. What was a prosperous group of enterprises, was reduced to a faltering, nearly empty deli- all due to disloyalty and divorce. Later, the deli was taken over by creditors and our ill-fated entrepreneur wound up driving a delivery van.
Here are a few pointers to remember before risking your families- welfare and money: Your new business is like marriage -it requires your total commitment. Your new business is not a hobby- it needs your full attention. Your new business will dominate your lifestyle-it will effect your families’ happiness.
As you dream about taking that step toward the “American” dream of owning your own business- You will be wise to believe that your success will be difficult without the support of your family. You will find that your family business becomes an extension of your family demanding hard work, sense of purpose combined with trust and mutual support guided by common sense and a little luck, to create a prosperous and comfortable lifestyle.
Article Copyright 2000 by Dr. Paul E Adams, Professor Emeritus Business Administration Ramapo College of New Jersey Author Fail Proof Your Business: Beat the Odds and be Successful.