From smSmallBiz
A TYPICAL FIGHT between Gail and Barny Foland of San Francisco goes something like this (according to Gail): "He'll go, 'I need to get this,' and I'll say, 'We don't have the money right now.'" Voices raise, tension mounts. "He'll say, 'Where the hell is all the money going?' and I'll say, 'Here is the checkbook — take a look.'"
While that may sound like a familiar squabble to many couples, the Folands aren't exchanging these heated words around the kitchen table, but rather at work in their office, a 12,000-foot training center for self-defense, yoga and fitness. It's the third business they've owned in 32 years of marriage — and when it comes to money, they still butt heads, especially when times are tough. "It's been a struggle, I'll admit it," says Barny. "I don't recommend to anybody for their first business to partner up with their spouse."
In many relationships, money is a touchy subject. For couples that run a business together, money can be a stressor like no other, prompting harsh words, accusations of mismanagement and — in the worst-case scenarios — divorce and the ultimate dissolution of the business.
"Money is one of those things we can get really bent out of shape about," says Kathy Marshack, a psychologist in Portland, Ore., and author of "Entrepreneurial Couples: Making It Work at Work and at Home." In general, money triggers a survival instinct, so worries about it can cause people to react "in more primitive ways," she says. That's especially true for couples in business together, whose livelihoods both depend on the success of the company. "If one partner makes a decision that the other feels is going to cost them, or force them to lose a contract, they can get extremely upset," Marshack says.
Christina and Patrick Vitagliano at one of their Monster Mini Golf locations. The couple lets their accountant mediate when they squabble over money.
The couple says they make it work by splitting up financial responsibilities — Christina reviews all bills and financial paperwork before sending them off to the bookkeeper, while Patrick handles leases and new contracts with franchisees (they'll have more than 20 locations by the end of this year). When it comes to fiscal matters, such as cutting costs or taking on debt, "not that we always agree, but we jointly talk about all of our decisions," she says.
And when they do disagree? They call in their outside accountant, who mediates the dispute. That's something Christina recommends to other couples (including several Monster Mini-Golf franchisees). "You need someone you're not related to, that has your business interest at heart, that can take the emotion out," she says.
Indeed, dividing responsibilities clearly, discussing big money moves and bringing in dispassionate third parties when fights arise are all smart ideas for entrepreneurial couples, says Dayana Yochim, consumer-finance expert at personal finance and investing web site Motley Fool and author of "Couples & Cash: How to Handle Money with Your Honey." Couples should also talk about their shared vision for the business — ideally, before starting up — and formally review that plan at quarterly meetings. "If you haven't sat down and really mapped out where your business is going to go, and how you are going to handle certain milestones, then conflict will arise," she says.
And while it's best to consult lawyers and accountants about the business basics, a couple might also want to talk to a marriage counselor, suggest Wayne Rivers, president of the Family Business Institute in Raleigh, N.C. "The dynamic of working together is going to have an effect on the marriage," he says.
That's especially true when the balance of power is lopsided in the business. For instance, Rivers is seeing a growing number of wives building successful businesses, and hiring husbands as employees. Sometimes, "the husband refuses to recognize that his wife is 'the man,'" he says. "He is basically a bad employee."
Some couples may want to think twice about setting up anything but an equal relationship at work, especially when it comes to titles and salaries, suggests Marshack, the Portland psychologist. Some husband-and-wife teams, to avoid being hit by self-employment taxes, make one spouse the owner and the other an employee. (See related story here ). "Sure, it probably cuts your taxes down," she says. But it may not make sense when it comes to the "health of your relationship and even the culture of your business," she says.
For the Folands, the couple who co-own the San Francisco training studio, they say their disputes over money are normally settled when they both sit down and look at cash-flow statements together. Gail, whose background is in bookkeeping, prepares the projections. Barney, who manages employees and class schedules, says going over the books helps him "see where everything is going, and then you understand." Both say they're driven by a common goal of selling the business to fund their retirement. And the occasional heated exchange over the company's finances? "We've been married so long, you can't take it personally," Gail says.
("Work & Life," a regular column written by Colleen DeBaise for smSmallBiz.com, advisesentrepreneurs on how to better balance their lives. Write to her at cdebaise@smartmoney.com .)
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