Should your entrepreneur quit their current job?

At some point in time, your entrepreneur will want to quit their current job. What's the right time to do that, though?

Here are some things for you both to think about before anything drastic happens:

i) How many months can you live on your current cash savings, plus whatever income might come in other than from the entrepreneur (your job, other income, such as rental)?

In your entrepreneur's plan, when will they be earning the money that they currently do again? If there's a gap between when your current savings will run out, and when they'll be earning steady money again, then they should re-think quitting their job too soon.

ii) If they leave their current employer, will you all still have medical insurance coverage?

Look into the cost of coverage before they quit their job. If you can afford it- great! But if not, then be sure to save up some extra money for this before they leave their job. You might also want to apply for insurance from the same place that covers you through their current employer, because they'll already have a record of you and a history going.

iii) How much time will creating the business take?

If your entrepreneur can get the new business going in their spare time while still working, this is really the best of both worlds (though you might have less personal time together). If this is possible, then you'll still have the security of the steady income plus the benefits you enjoy, while the new business isn't earning much yet. Once the new business becomes a steady source of income at a level that you're both happy with, then you can revisit whether the entrepreneur should quit their old job. One note is that it might happen that eventually the entrepreneur needs to quit their job to have enough time to spend to properly get the new business going. At this time, look again at your monthly household spending vs. how much money you've got saved up, and ask yourselves whether you'll be able to survive financially for those months or years it will take for the business to generate enough income to pay your entrepreneur a decent salary.

iv) Does your entrepreneur work as a stay-at-home mom or dad?

If your entrepreneur currently does unpaid work, then the issue that you'll have to think about is, 'Do they still have time to do everything they do now?' If they're spending all their time dashing around to swimming, soccer, ballet, and karate, and folding laundry, then they may need to scale back on that-- meaning you may need to take some of it on. If necessary for them, make sure they actually block out time in their schedule for working on the business. This can have the added bonus of helping them focus on family during the non-business time.

Is your spouse really right for entrepreneurship?

Starting a business isn't for everyone. But it's hard to know if you and your entrepreneur are cut out for it until you're in the thick of it (at which time it might be too late). So if you're having doubts about whether your entrepreneur's really got what it takes to create a business, before you tell them to keep their day job, have them take a few of these tests. One I like is this one over at Guy Kawasaki's site: http://blog.guykawasaki.com/2006/03/whats_your_eq_e.html . Another interesting quiz is at the Wall Street Journal's site for entrepreneurs, http://www.startupjournal.com/howto/soundadvice/20030317-mancuso.html.

Do a search to find a few more tests on your own. The more you both know about whether your prospective entrepreneur is right for entrepreneurship, the better you'll be able to decide whether this step is right for you both.

Creating Space

So, your entrepreneur is still determined to start their business. It is entirely probable that they will begin working on doing this at home. If you're really lucky, there's already a place in your house that they can do this. Maybe it's an existing office space. Or the garage, perfect for creating sample products. Or a quiet place in the back shed.

You might be wondering what's this got to do with you. Well, possibly a lot.

It's important to have a designated space for this new activity for two reasons: One, so that everything to do with the business can be organized and found in one place. Reason number two, though, is so that you can all (them, you, your kids) better distinguish work time from home time.

Having a specific place for all the business stuff also helps them set a professional mentality. If they're talking to a client in Tokyo on the phone, it's best if they can be away from the living room TV blasting the latest American Idol's singing, or sounds of the kids arguing, etc. If a customer is dropping by, being able to take them to a place that's all business will help your entrepreneur seem like they're all business too. Not to mention, helping you feel like your home is still a home.

If you have a pre-existing office space in the house, don't be deceived into thinking that it will make this process easier. It's best that you actually clean it out, and clear space for the new business's stuff. For ages, I'd started a number of new projects without doing this, and not only did all the papers get mixed up together in no time, but also without any new space for the new business documents and items to go into, it was that much more of a deterrent to do many of thing needed, because my thinking would be, "Ack! I don't want to create even more of a mess in here."

An organized space will help lead to an organized business.

No Space Available at Home

What if you just don't have any place to spare for the papers and other stuff that the business will generate?

If you also have no money for now, advise the entrepreneur to keep everything in storage boxes that they can easily access (you'll even be able to find plastic file folder boxes at the office supply store you can use instead of a filing cabinet for now).

If your entrepreneur does have the budget, then it might be time to find a suitable office space somewhere. Depending on their needs, a small space somewhere might work, or they might need the more expensive choice of a serviced office (where they'll usually answer the phone in your name if you're not there, and do secretarial work for an additional fee, offer a conference room by the hour, and general office support, among other things).

At some point, your entrepreneur will need to find their own official business space. Now's the time to figure out where they'd like to be, and when. And whether you'll need to clean out the guest bedroom closet to make space for their new wonder invention.

The List of Non-Negotiables

OK, so you're over the shock of hearing the news, and your entrepreneur is set on creating their business.

The next few posts will talk about what you (the Startup Spouse) need to consider, starting with the big one: Where the money will come from (and where it won't!).

The best way to do this, is to list the assets you and your spouse have, and then from that, create a list of what you are NOT WILLING TO RISK FOR THE COMPANY.

This list of non-negotiables might include:

-Your house
-Your children's college money
-6 months' living expenses
-Your retirement savings
-'Basic' comforts of life
-Your standard of living

Once you've created your list, then with your entrepreneur, look at what's not on the list. Ideally, there will be enough cash for them to fund the start of the business. If there isn't, then talk about where the extra money needed might come from. Borrowing from family and friends, or having them own a piece of the company? Finding angel investors? Getting a bank or small business loan? Finding a venture capitalist? There are lots of options for finding money (which we'll look at in more detail later).

Discuss how you will keep your personal assets separate from the business. The easiest way is to ensure that from the beginning your entrepreneur keeps proper accounts for the business, and a separate bank account.

Now, here's the big thing that no one talks about: Whatever your entrepreneur thought would be enough funding, probably isn't, so where's the extra money going to come from? You might want to take a second look at your list and ask yourself whether there's anything on it that you can risk losing if crunch time hits. Put the items into categories:

1) Unwilling to risk no matter what.
2) Willing to risk, or risk a portion of (specify the amount), if the risk seems low.
3) Willing to lose if necessary to try to keep the business going (this might be a portion of your retirement savings, or your children's college tuition if there are still many years until they go).

Doing this exercise can save you from what many, many entrepreneurial family slip into, where the business seems like a black hole, absorbing all of their assets, with no sign of whether it will pay off in years to come or not. If it does, then everyone's got stories to tell of their great bravery for years to come. But if it doesn't, then the results could be total disaster: loss of everything, personal bankruptcy, and a bleak old age.

In my own case, I like to say that 'the business ate my wedding', because at the time that we got married, the business was still eating all of our available cash, so we scheduled two wedding activities: A small ceremony and reception (which we had), followed by a big reception in a second location (which never did happen). This is fine by me, but I've also witnessed scarier stories where people have risked too much on a start-up and lost everything, including their homes. By planning ahead, and drawing firm lines now while your entrepreneur still has a clear head and before emotions get involved, or a gambler's mentality, this doesn't have to be you!

Can the boss's spouse have an impact on staff morale?

This question hit me yesterday. Can the person-in-charge's husband or wife (or girlfriend/boyfriend/significant other) bring the morale of staff up, or down, depending on their attitude toward the CEO, the company, or the employees who work there?

I think if they have regular contact with employees, they probably do, so bear that in mind when you come across people related to your company. Why? Because whether you like it or not, you are part of the company culture, and like everyone else there, help to set the tone and enthusiasm level. If your drop by the office, your positivity can help keep people's spirits up when they've otherwise felt glum about what's gone on in their day.

Hearing the News

Having your spouse come and tell you that they want to start a business can have a lot of different circumstances.

Maybe it's a total surprise to you. Maybe it isn't- they've been making noises about this kind of thing for months. Maybe it's a business area they've been meticulously researching. Maybe it's a sudden idea that's struck them while they were stuck on the 405. Whatever the situation, your reaction can have a serious impact.

At the least, you'll need to consider the following things:

i) How serious are they about this?
ii) What are the chances that they can make this business successful? (with the sub-questions of: 'Does the idea sound good?', and 'Is my spouse the right person to make the idea successful?')
iii) What effect would this have on our current life? Would we have to make changes to how we currently do things? Is my spouse planning to quit their job (more on this later), and if so, how will that impact us financially?
iv) How does this notion change what plans I already had for us?

Some of these answers you'll know right away. Others might be just a gut feel. If you're excited by this announcement, be sure to say so- and enjoy this moment! It's the first day of the rest of your new entrepreneurial lives! If you have concerns, now's the best time to talk about them.

Tell me in the comments section what your first reaction to hearing the news was like.

Welcome to The Entrepreneur's Wife!

Hello and welcome to The Entrepreneur's Wife!

Here, you'll find a treasure trove of articles and advice for anyone whose husband, wife or significant other has decided to start a business.

Let me say this loud and clear: This advice is NOT FOR THE ENTREPRENEUR!!

It's specifically meant for us partners who are supposed to sit calmly on the sidelines and cheer when the money comes in, or not cry too much if the car gets repossessed while the entrepreneur tries to make their business dreams come true.

Over the coming months, I'll be adding a post here weekly, touching on topics that are important for us to understand: Mixing personal and business finances. Blocking out time to spend together. Whether and how you should get involved with the business. And, like the cheesy commercials promise, "Much, much more!"

As each post from me comes out, you'll be able to follow my story as an entrepreneur's wife, and see what we've done, and are doing and find out what works and might work for you. I'll also invite other E.P.s (Entrepreneur's Partners) I know to chime in with their experiences and advice frequently, though I encourage any E.P. reading this to add their own comments too. If you're an entrepreneur, we'd be happy to hear from you too- tell us what you wish your spouse had known before, what they can do (or not do) to help, and other tips that can make life better for other entrepreneurial couples.

In the meantime, stay tuned for Post #1!