Financial Backup – It is risky if both partners quit their jobs, use their savings and start working on the venture. Ensure that the family is in a financially stable position. Keep an emergency fund. Another option is that one partner can continue on the job for some time in the initial phase. This will give some amount of financial stability. If the business fails, at least one person can take care of financial needs. With financial backup, you will have the freedom to work on the business longer to make it a success without compromising on financial stability.
Insure yourselves adequately – Both husband and wife should have a term insurance plan and a health insurance plan. This can provide for financial cover if there are unexpected contingencies.
Account for employer benefits and support – When you are employed, many things are provided for – office space, office equipment, income, Employee Provident Fund, Health insurance, office supplies etc. You have to consider the costs of acquiring the essentials for running an office even if you are working from home. It is better to demarcate the space for work for each of you just like in a real office. You have to get insurance and plan your investments so that your future is financially secure.
Keep your network intact – Entrepreneurial ventures are risky. They may fail. It is important to remain connected with your network of colleagues, B-school classmates. business partners etc. It might prove to be a stepping stone in getting back in the corporate world.
Divide Business Responsibilities – When you run a business with a spouse, the line between official and personal spaces can get blurred. Discussions and negotiations might turn ugly or personal. Decide on who is competent in which aspect of the business. Divide the responsibilities on the basis of that. For example, one person takes care of customer relationships and marketing and the other takes care of operations and HR. Suggestions can be welcome but the person responsible for that aspect of the business should be the one taking the final decision.You can set up a document that can be signed by both that details out role, designation, decision making and responsibilities of both spouses. It is also important to document the exit strategy. You should have an agreement on
- Exit of one of you from the business
- Exit of both of you from the business
- Selling, Expansion and Closure of business
- Compensation and Equity stake related details
- Strategy to follow in case of a divorce
If your relationship with your spouse is strong and your business has got a good start and has the potential to be a success, it is a great idea to run the business together.