A business partnership is like a marriage. So goes the cliched metaphor. What happens, though, when that's not just a metaphor but a reality? There are at least a half-million couples in business together in the U.S. To many, the idea seems perfectly sensible. With the boundary between work and personal life becoming harder to distinguish, why not just merge the two? Having professional goals in common makes home life easier. When one partner has to work all weekend, the other understands. And what's more fun than joining forces with someone you love?
Suffice it to say, there are two sides to this coin. In many ways, experts say, a business partnership in general is as complicated and as vulnerable to the corrosive effects of miscommunication as a marriage. "It's hard enough to operate a business, and hard enough to stay married," cautions Leigh Griffith, an attorney at Waller Lansden Dortch & Davis, in Nashville, Tenn. "When you put the two together it's especially rough."
On the flip side, there's the peace of mind of having a business partner who loves you and whom you can trust. "There's a synergy a lot of couples enjoy," says Kathy Marshack, a psychologist in Vancouver, Wash. "They feel they're more creative than if they were working on their own."
roles and regulations
Steven and Cathi House, San Francisco, have been working in tandem for nearly 20 of the 27 years they've been married. They've even hitched their family name to create a clever professional identity: House + House Architects. Though the company name was arrived at honestly--Cathi took Steven's name when they were married right after graduating from Virginia Tech--some potential clients presume it's a public relations ploy. Says Steven, "People who see our name in the phone book will call us and say, in all seriousness, 'I assume you do houses.'"
The pair--at the helm of a staff of four--owes part of their professional bliss to the way they've divided up their turf. But it wasn't always that way. During the first five years of practice, they tried to take turns doing the same tasks. "When we looked at other firms we'd worked in, we saw that one partner was always doing the fine, beautiful things, and the other was doing the nasty jobs," Cathi explains. Yet in their efforts to find fairness, they got in each other's way. "When you have to change hats, it's not as easy as changing people in the seat," she says. "We were doubling up on things and not operating as efficiently as we could."
Finally they took a step in their business that's usually reserved for feuding spouses--they called in a counselor. "We had someone chat through with us our priorities personally," Cathi says. "The staff also got involved in helping us redefine our roles."
Steven handles the tasks he enjoys, such as marketing, design critiques, hiring of staff, and walking clients through contracts, schedules, and procedures. He's the big-picture person, making sure the other architects aren't getting off track on budget or design direction. Cathi, who loves to draw, is responsible for most of the design work. Bookkeeping and accounting tasks get split, with Steven in charge of money coming in, Cathi of money going out.
"It corresponds with how we live our personal lives," Cathi says. "I generally buy things, so paying the bills is part of what I do, while Steven does the invoicing."
Not all entrepreneur couples collaborate this harmoniously. In the case of husbands and wives, even those with professional credentials succumb to a major pitfall when they combine business cards. They unconsciously default to traditional gender roles that can diminish their identity, according to Marshack, author of Entrepreneurial Couples: Making It Work at Work and at Home (Davis-Black Publishing, 1998; her Web site is www.executivecouples.com). In an academic study of 30 couples, she found that co-entrepreneur relationships are less egalitarian than marriages in which the spouses have separate careers.
"Dual-career couples view themselves individually as professional leaders," Marshack says. "When they come home they see themselves as social partners, both responsible for the house and the children. But couples in business together start slipping into traditional gender roles to get tasks done. I was amazed to find that's true of professional couples such as physicians and attorneys, not just mom-and-pop ventures. The husband is seen by the community as well as the couple as the leader; the wife is the support person."
Margaret McCurry, FAIA, and Stanley Tigerman, FAIA, of Tigerman McCurry Architects, Chicago, neatly avoided that trap by sharing staff but choosing their own clients. "I set out to establish my own reputation," says Margaret McCurry, who has published a book of her work. "And we deviate into different paths. Stanley was always interested in reiterating American society at whatever moment it might be in. I'm more interested in American vernacular architecture. We can each play around with the other's thought processes when we need to, and we certainly critique each other's work. Still, it's easier on your psyche to have one person controlling a design."
It's not that husbands want to run roughshod over their wives' interests, Marshack believes. It's a communication problem. "Wives just tend to take on certain tasks because of traditional role models we've had. And a lot of resentments build up." She recommends sitting down and assigning responsibilities according to interest and ability. Tasks nobody wants to do should get hired out or split up, instead of defaulting to one partner or the other.
That scenario is part of a larger problem that catches spouses unaware. If conventional wisdom dictates that a business partnership be treated like a marriage, observing the rules of mutual respect, the opposite is also true. Entrepreneur couples should play by the rules of business. "You're never totally successful in compartmentalizing your business and personal life," says tax attorney Griffith. "But try to approach your business as if you were third parties, not as an emotional outlet for the family. Don't do something for your spouse you wouldn't do for a good business partner. And don't ask your spouse to do something you wouldn't ask of a partner unrelated to you."
Griffith advises spouses to talk through issues they'd raise with any other professional partner, including how to structure the business for tax and liability purposes, how capital will be raised, and how decisions will be made. For example, close physical proximity forces spouses into ongoing, low-level negotiations. But one day they may reach an impasse on a major decision. When there are only two owners, who will decide the outcome? "There's a tendency to say, 'I love you and everything is wonderful,'" Griffith says. "But the easiest time to resolve any disagreement is when it's hypothetical." He suggests drafting a course of action, whether it's naming a trusted associate to break the deadlock, deferring to a board of directors, or deciding to do nothing at all if both parties can't agree.
Early on, another potentially sensitive topic to resolve is each person's share of ownership. "A lot of disputes arise, particularly in a general partnership, around who has what percentage of the business," Griffith says. "People get real upset later when they think they own something and the other person disagrees, whether it's in the context of a split-up or a new person buying into the interest."
Are spouse teams a turnoff for potential employees? Steve Thorne, head of family business consulting for Arthur Andersen, says no, though the owners may have trouble finding good managers because equity in the firm is hard to get. "Spouse teams generally aren't good delegators," Thorne says. "Their organizational charts are flat because everyone reports to the bosses."
Taal Safdie and Ricardo Rabines, Safdie Rabines Architects, San Diego, admit that dealing with two partners gets complicated for their 13 employees. Both of them participate in the design of every project, so "staff have to pass design issues between the two of us," Rabines says. Adds Safdie: "People can feel they're getting between us. If we're disagreeing on a design, who will they listen to?" On the other hand, the pair has tried to create an informal office culture where it's fine for people to disagree.
The Houses also expect staff to speak their minds. In fact, verbal skirmishes are encouraged. "Steven and I believe in the struggle of what we do, which means tearing it up and throwing it away if it's not there yet," Cathi says. "We have very different viewpoints on things and often disagree in front of our staff. But we want them to participate as well, not disappear under a veil of politeness."
Clients may have the better deal. Julie Eizenberg, who practices with her husband, Hank Koning, FAIA, in Santa Monica, says some clients feel reassured that one of them is a technical expert and the other will be looking after the vision. After working together for 20 years, their roles have merged a little. Typically they both work on the design concept. Eizenberg follows through with design development, and Koning concerns himself with how the project gets built. Nevertheless, "The best clients we've got are interested in the way we think about things," Eizenberg says, "not that we're husband and wife."
Tom Tolleson, who runs an architecture firm in Evergreen, Colo., with his wife, Cheryl Tolleson, believes their partnership appeals to a certain group of people. "I think there's a really big attraction in the residential high-end market, because most of the time these homes are being built by a couple," he says. "It's two couples meeting each other and there's a certain level of comfort."
The Houses attract the same kind of market in San Francisco. Ninety percent of their clients are a husband and wife. "Clients will gravitate to one or the other or like us both, so we find we have twice as good a chance of getting a job," Steven says. "It's also a plus because some people feel that a man's and a woman's point of view might be different, and they're getting both. It's an unsaid thing that comes out in subtle ways."
Working in the Philadelphia suburbs, Ellen and Stephen Varenhorst, Varenhorst Architects, also believe their structure and respective strengths benefit clients. "What's important for them is that our roles are defined, and I'm not saying one thing and Ellen another," says Stephen, AIA. He designs, and Ellen oversees construction. "It's a nice distinction for them," Ellen says. "When we explain our roles, they almost give a sigh of relief."
Many couples believe that because they love each other, have raised children together, or went to grad school together, they should be able to get along running a business. Not so, says Marshack. Couples who work together will have a lot more fights, because there's more to fight about. "A business is about making money. And couples argue about money anyway," she says. "One gets concerned about whether the other handled a client right, or whether the partner should have negotiated an extra $10,000 into the bid. It can make you quite cranky with your spouse."
Marshack stresses the importance of realizing your partner will be more sensitive to your criticisms than someone else will. "You have to be polite, take more time to communicate what you mean and clarify what the other person means," she says. "It will take more time than if you were working on your own or with a nonrelated partner."
People whose lives are intertwined 24/7 are also prone to communicating in ways that aren't productive in a business setting. One danger the Varenhorsts have encountered is assuming that each knows what the other is thinking. "Treating each other differently than you'd treat an employee or consultant can be confused with disrespect," Stephen says. In their 14 years of working together, they've also kicked the habit of using each other to vent frustrations about staff. If Stephen had difficulty with an employee, he'd complain to Ellen instead of going to the source. Then he'd feel better but Ellen would be angry. "It can pile up over time," he says. "It became so corrosive that we put it aside."
They also put aside time for themselves. Making the 15-minute commute from home to office in two cars may seem like a small thing. But to the Varenhorsts it represents a much-needed sense of separation. "At first we tried to be conscious of ecology," Stephen says. "But we decided it was more important to save our relationship."
Friday night is date night for Steven and Cathi House--and business talk is taboo. But they spend Saturdays apart. That's not so easy for Eizenberg and Koning, who have two children ages 11 and 15. How do they separate their business and personal lives?
"We do and we don't," Eizenberg says blithely. "We're big believers that your work is better if you have a life outside the office. But there's a lot of crossover. We meet friends through our work. Life is pretty fluid at the moment--is this a house or an office?"
The answer doesn't matter if the discussion is part of a creative process, Marshack says. Talk business anywhere you want. But tedious topics are best resolved in the office, she advises, not in the bedroom or when you're on vacation. "If you have children, they need a break from your preoccupation with work--they're not in on it. Lots of kids who've grown up with entrepreneur parents complain they don't want to raise their children that way. They didn't get enough of Mom and Dad."
One thing couples seem to appreciate about running a business together has little to do with the nine-to-five routine. Rather, it's sharing a common philosophy about architecture's role in the community. "Your values permeating everything you do together is the biggest element of success," Safdie says.
"It's an interesting setup," Rabines agrees. "The two of us like to deal with social aspects of architecture. It takes away the egomaniac thing architects have of just trying to make design interesting. Our philosophy shapes our work and defines it."
--Cheryl Weber is a contributing writer in Severna Park, Md.
planning for the unexpected
When spouses share business ownership, a stroke of bad fortune can wreak havoc on the family finances. If your firm is structured as a partnership or sole proprietorship, your personal assets are up for grabs in a lawsuit. Attorney Leigh Griffith and Arthur Andersen's Steve Thorne generally recommend setting up a limited liability company. It offers some personal liability protection, is tax-efficient, and has more flexibility than an S Corp.
Planning for divorce also seems pointless when you're happily married. Like prenuptial contracts, buy/sell agreements between couples are emotionally laden, making them difficult to draft. But there are some precautions you can take. Segregate corporate and family assets--for example, don't use the firm to buy your vacation condo. And identify how the firm's worth will be determined if a partnership hits the skids. "The valuation of a business is the most hotly contested issue in a divorce settlement, creating great acrimony," Thorne says. To get unbiased results, some people specify that two or three independent appraisers be hired, with the couple agreeing to rely on their average estimate. And be sure to include an extended payout period to shelter your cash flow from the shock of a one-shot settlement.