Exit planning for couples brings its unique challenges and opportunities as romance intertwines with business.
Working as a romantic couple brings pleasure, frustration and opportunity all rolled up into one package. Sometimes it just doesn’t work for some, but for those were the sparks fly, business booms and it all comes together it’s a special relationship that can build a business
Planning the exit from your business as a couple is an essential aspect to get right. Both partners are on a journey on their own life path. Working together often can mean spending 24/ seven together, and that’s big ask for any couple. Starting the conversation with your partner about the direction of the business is often an issue that neither wish to broach! Yet, it’s essential to get an understanding where each other’s thoughts lie towards the future.
Couples in business often happen by default. In some cases, one person in the matrimonial relationship has by default become part of the business to support the other. One partner may have taken a role to support the other, either because they wished too but often because of necessity to keep the business growing. Sometimes the husband and wife or partner business relationships start reluctantly but for others its been a wish as they define a distinct role in the business.
Of course for those couples that cant work together, they have not stepped into the business relationship arena, but they still need to be part of the future planning for an exit strategy of the business to support their partner who is running the business.
Times are changing, but predominately it may be the wife or female partner who supports the husband such a Doctors or plumbers wife etc. but more and more thankfully now the reverse is happening as community attitudes are changing and the wife is taking charge.
Exit planning is about the strategic plan of when to exit the business to enjoy retirement or other challenges. Timing becomes even more critical when there are a husband and wife involved.
Let’s summarise the opportunities exit planning can offer couples.
1. One partner in the relationship may want out while the other may wish to continue,
2. Both partners want out,
3. The partner who holds the skill that drives the business wishes to retire
4. One partner gets sick and leaves the other partner to run the business
Each event above needs to be evaluated and planned.
Sometimes starting that conversation about each other’s needs is avoided until its too late.
It is, for this reason, that first of all each partner needs and desires needs to be respected and a suitable plan to address complications that may arise as above. In any planning situation have a frank discussion about the future will derive a better result in the exit process journey and also may help or save a marital relationship that was under enormous pressure due to the expectations of one partner to other continue to operate in the business.
Remember taking the approach that a business will achieve a higher value with less or no reliance on its owners is a great attitude to have when it comes to exit planning for couples
It’s typical that one partner may not wish to continue living the dream of the other partner in the business. The reluctant partner in business may have become the reluctant administrator or debt collector within the business. They can often feel frustrated, and resentment may start to set in. Starting the exit process may bring immediate relief by one or both partners when a plan for one or both is implemented. Comments predominately by the wife during the time of planning is, “”I am so glad to be looking at my future and I feel happy It is often at a time when other life events are starting to come into play such as older parents or granschildren.
The feeling of being trapped dissipates as a plan becomes the way forward, implement and results towards a bright future becomes apparent.
It is at this stage that an exit plan becomes essential to the
· Transfer of skills
· Allow the business to continue
· For the departing partner to follow their dreams.
· Value the business for sale without reliance on one or all of the partners
Developing a well thought out exit plan for change the roles from running the company to making sure the company runs well for value for sale will be part of exit strategy of taking on or both partners in the relationship out of business.
Many couples don’t like to think of what happens when sickness or death occurs to one of the owners. This is an exit that can be abrupt but planning helps easy the pain. Take Sam and Samantha. Sam is a mechanic and fixes the cars etc. and Samantha runs the office and does the pay. What happens if Sam becomes sick and can not work in the business. It’s best to plan early to avoid a business facing a crisis due to the death or sickness of a strategic partner.
Four essential tips for couples to start the exit planning process.
1. Start early and plan
2. Define each other’s roles and how your role can be replaced in the business
3. Look ar what you both would like to do post business
4. Engage in a professional that can help you both to facilitate the plan and help get the best outcome for both and the business taking into consideration the opportunities of 1 to 3 that were defined earlier in this article.
An exit planner will help you as a couple plan and allow each to start to express their desires without offending the other by acting a well trusted mediator. Your exit plan maybe a while off for sale but the exit of one couple in the business maybe sooner. So start the conversation now and your long term future will flourish.
Congratulations to all couples in business. Living the dream in your business is even more special when you can share it with your life partner and planning that next stage of your life journey together is another exciting chapter that should be cherished and celebrated.