By Gina Bolvin and William Bernarduci
As a husband and wife financial advisory team, people often ask us how we successfully mix owning a business and staying happily married. The short answer is that while managing this sort of dynamic can be tricky, putting even the best personal relationships to the test, it’s been our experience — and the experience of many of the clients we advise — that spouses combining forces and going into business can sometimes produce the best partnerships.
Here are the top four ways in which advisors can successfully add value to clients who are not only married but business partners:
- Discuss their retirement goals early and often. Spouses who go into business together often have dramatically different ideas about retirement. Do they, for instance, want to stop working entirely at a certain age (especially important if there’s a large age gap between two spouses)? Or perhaps would they rather ease into retirement gradually by continuing to work 10-20 hours each week? Another question is broader but paradoxically gets right to the heart of it all: What are their financial goals that support retirement? By tackling these type of core retirement planning questions first — and by revisiting them each year — advisors can ensure that their clients are either on the same page or, at the very least, help them realize that each of them has a somewhat different outlook for the future.
- Encourage them to establish clear professional and personal boundaries. Perhaps the biggest challenge facing spouses who run businesses together is keeping the professional and personal part of their lives separate from one another. We know this first hand. As hard as it may seem for them, encourage clients to table business-related discussions outside of "office hours." Because running a successful small business is a significant time investment, they'll probably say that’s impossible — the office is almost always open. But for the sake of both their business and marriage, it’s crucial for them to create a personal oasis at home, where the everyday pressures of professional life are allowed to dissipate, even if it’s only for a short time.
- Make it clear when it’s time to wind down the business. Running a business is hard. While there are an unlimited number of success stories, the sad fact is that many others fail to get off the ground. Even the ones that have been successful don’t last forever. Sometimes an advisor's most important task is persuading business owners, married or otherwise, when it’s time to call it a day. If they are working long hours just to break even or worse, losing money, there comes a time when it doesn’t make sense to spend more personal funds or take out another loan to keep the business afloat. In many cases, such steps are only delaying the inevitable, which could lead to agonizing financial troubles — one of the primary reasons why marriages end in divorce. Knowing when it's time to wind down a money-losing business can spare undue emotional pressure on the marriage.
- Advising when it’s the right time to sell. On the other side of the coin, there are businesses that could seemingly go on forever. But as much as a husband and wife may want to continue running their business for as long as possible or groom their children to take over, they also need to understand what’s at stake. As nearly every independent financial advisor can appreciate, it's possible that the business is their most valuable asset, far exceeding any equity or real estate holdings. So, in effect, the business is their retirement plan, making it that much more important to maximize its value. Advisors need to help their clients understand that there's a big difference between when they may want to sell their business and when they should sell it. Helping them make that distinction could be the best financial planning advice they ever get.
Despite what many would have you believe, it’s not only possible for a husband and wife to go into business together and keep their relationship intact, it’s reasonable to think they’ll come away with a profound sense of personal and professional fulfillment.
Advisors should remind them that it won’t always be easy and there will be bumps in the road. But by starting and ending with a focus on the importance of retirement and financial planning, it's more than possible to have a happy personal and professional marriage.
Gina Bolvin is President of Bolvin Wealth Management Group, a Boston-based independent financial advisory firm focused on investment management, employee benefits advisory services, retirement planning and estate planning. William Bernarduci, J.D., is a wealth advisor with Bolvin Wealth Management Group.