The Entrepreneur's Wife

Technorati Post

2007-02-24T11:29:00.000-05:00

Hi!

Don't mind me- I'm linking up this blog post to Technorati. Technorati Profile

New Forum!

2007-02-23T21:06:00.000-05:00

Check out the new forum at http://startupspouses.com/phpbb/index.php .

The new website itself is at http://www.startupspouses.com. Feel free to browse there, or register and post at the forum!

~TEW

Working Too Much?

2007-02-20T10:51:00.000-05:00

Is your entrepreneur working too much? Here's a test: Did they work through Valentine's Day?

If you're finding that on every holiday and special occasion that one thing or another hijacks the time you were supposed to spend together, then it could be time to sit down and talk through how to re-jig their work schedule so that life doesn't pass you by entirely. Of course, occasionally, there will be things that they miss that are unavoidable. But if you find that it's been years since you had Christmas together, or got a birthday present in person, then it could be time to put your foot down. After all, one aim of having your own company is to be able to be flexible enough to *not* miss these events, so make sure it happens, and that your entrepreneur doesn't start to be more free just as your kids are all grown up and going off to college.

Coming soon...!

2007-02-05T23:28:00.000-05:00

I'm very excited to announce that coming very soon will be a forum linked to this blog. Anyone with topics they want to discuss can feel free to start them there, or comment on others' posts. Stay tuned!

What's their motivation?

2006-06-23T09:20:00.000-05:00

One question to ask your entrepreneur is, "What's your motivation for starting this company?" Ideally, ask it before they've actually started it.

What you don't want to hear is, "To make us rich- RICH!" Why? Because there are a heck of a lot of easier ways to get rich. And statistically, starting a business isn't one of the best. If what they want is a big pile of money to sit on (or play in, like Scrooge McDuck) during your early retirement, then tell them to stick at their current job, or get a higher paying job, and start saving for that rainy, but loot-filled day.

Hopefully, your entrepreneur wants to start their business because it's something that they're really going to love doing. This is because for a whole lot of the time, entrepreneurship isn't that much fun. So if they're not getting joy out of the basic day-to-day that they'll be going through, then they might get discouraged and give up. If nothing's at stake, then let them go ahead, but if they're quitting their job and mortgaging your house to the hilt to finance their venture, then there needs to be more motivation for them to be doing this than a pot of gold at the end of the rainbow, otherwise, they'll never get there.

Worse reasons, of course, can be weeded out (to keep up with some kind of friends or family who are starting businesses, to avoid looking for a real job working for someone else, for some kind of prestige they think being a business owner will bring, simply to avoid working for someone else).

Ask the question. Because you might be the only person who can talk sense to them, if they need it.

Startup-itis

2006-06-14T15:02:00.000-05:00

Some wannabe entrepreneurs get startup-itis. It's a disease that strikes people who think they're entrepreneurs, and might be doing a few things so that they can claim this title, but actually are doing a number of things to prevent themselves from actually launching the business.

If the business your entrepreneur wants to start isn't off the ground, and a fair amount of time has passed (for example, friends who first heard about it, are saying things like, "It's still not going yet?!"), ask yourself if you're starting to hear things like this from your entrepreneur:

"I'd be able to launch it, except I'm still waiting for some government red tape to clear."

"I don't have all the information I need yet, and no one will tell me, so I can't move forward."

"Some potential customers I talked to are asking for a track record, so I'm waiting to contact more until I get a track record together."

"The product's not ready, so everything's on hold."

Are you sensing a theme here?

Too many people create their own obstacles to moving forward with their business ideas. Why not- it's easy! And by blaming some external force in what's holding you back, the entrepreneur doesn't have to feel responsible themselves.

If the symptoms persist, you, the StartUp Spouse might have to step in and have a quiet talk with them. Keep pressing them for details as to why they are stuck. Once you get down to the real, key problems, have the entrepreneur devise a specific plan to overcome them. It might be as simple as "go down to the local licensing office to fill out some forms", or as complicated as "research pricing of competitors and determine a price for what the entrepreneur's offering". Whatever it is, the extra push from you might be what they need to get out of a temporary rut.

Should you help?

2006-06-12T11:20:00.000-05:00

A lot of entrepreneurs are lucky enough to have talented and skilled spouses. Maybe you're an accountant, or lawyer, or web designer. Whatever your skills, you can probably lend a hand to your entrepreneur. Here are a few things to consider before you do:

Can You Do What They're Asking?

Can actually do what your entrepreneur wants you to do? Maybe they're setting up a pet store and want you to feed all the pets once a day, or put them in cages together. Do you know what parakeets eat? Which snakes can be mixed together? Do you even want to get near a snake? More subtle problems may occur if you are a lawyer, but you do criminal law, and your partner needs a copyright lawyer. You might think that 'law is law' but you could be doing your partner harm by not quite knowing everything you need to know to help them. Use your own judgement to know if you can really do the job as well as an outside professional.

To Charge or Not to Charge

It may seem strange to charge your husband or wife for something, but bear in mind that the company is not just your husband or wife- it's a business like any other, albeit a fledgling business. Think about the following before you jump in:

i) How much of your time will it take? Does your entrepreneur want one-off help? Setting something up, or creating a company logo, for example? If so, you can probably consider helping them for free, especially if it's easy for you to do. If there are costs involved, perhaps charge them just for your materials. If the task will take you a while and you're rather be compensated for your work, say so. If your entrepreneur has set up the company formally, and funded it with external funds, then act like any other professional would: Invoice the company, so that the entrepreneur can have a record of this, and enter you into their accounts, and pay you along with other suppliers and vendors.

If performing the task means that you have to use things provided by your employer, be sure to get the OK from your employer first! They'll probably be OK with a few sheets of missing paper, or you using the computer at your desk, but don't start swiping lumber from the company's lumber yard to build your hubby's home office, or hijack the company printing press to print your wife's fliers if you work at a newspaper.

ii) Can the company pay you now, or ever? It might be the case that your entrepreneur's company has no money to pay you now, but they expect that it will be able to pay you in 6 months' time. There's nothing wrong with billing an amount that you both agree, and then waiting for it to be paid once the money starts flowing. You're not exactly a creditor who's going to call in Dog the Bounty Hunter if they don't pay on time. On the flipside, bear in mind whether your entrepreneur is planning to try to get external funding before they start selling anything. It won't be easy for them to do this, if the company looks like it owes you tens of thousands of dollars. By the same token, if you do plan to bill, bill as you do the work. I once fell into the trap of working for months for my entrepreneur without a record of being due anything, so when the company finally found external funding, they couldn't pay me anything- it really stank! So decide up front what's best for both of you and the company. If you want to really do things properly, write a contract, purchase order or employment agreement between you and the company. It will be good practice for when your entrepreneur needs to use one when they start hiring other people.

Can You Work With Your Spouse (And Can They Work With You)?

Lastly, consider whether you can work well with your spouse. It might be that you're great together as a couple, but fight like cats and dogs when trying to work together. Or find yourselves still talking business in bed. If this is the case, it's probably better overall if you just have your entrepreneur hire someone else to do the work they're asking of you. It's not worth risking your marriage to do whatever tasks they're asking.

If you've got other tips or questions for people considering this situation, post them in the comments.

Where's the money coming from?

2006-06-04T13:10:00.000-05:00

There are many ways your entrepreneur might raise money to fund their venture. Here are a few of the most popular, and what each one might mean for you:

Self-Funded

Many businesses are funded entirely by the entrepreneur (which could mean you too, if your money is mixed together). If this is the case, be sure that the entrepreneur creates a separate bank account for the company money. If they leave your personal money mixed up with the company money it will be that much harder to keep track of what's being spent where. What you don't want is for money to be mysteriously disappearing from your personal account, never to be seen again. Hopefully, your entrepreneur has written out a business plan, so they know how much money to transfer to their business account. They'll, of course, also have a clearer idea of when it's running low.

If it turns out that they need additional funding, then you can know for sure how much additional money you're able and comfortable transferring across to the business. In a more formal business set-up, additional funding could be given for an additional percentage share of the company. It might be that you and your entrepreneur each own different percentages of the company-- maybe they've invested more, or you did. Be sure you're both happy with how this is arranged. And if extra investment is needed, be sure that that is done fairly too. I strongly recommend you actually issue shares, or at least have a contract outlining who owns how much. This can save a lot of headache down the road in case of unexpected death, divorce or other unforeseen events.

Friends & Family

This is a common kind of fundraising, especially at the beginning of a business's life. If your entrepreneur decides to pass the hat around your circle of pals and relatives, bear in mind a few changes that this will mean for you.

The friends and family who invest may come to you asking how the business is going. It is best that you don't give them a blow-by-blow of every niggly detail. People can get spooked easily, and typically remember the bad things longer than the good. So if you describe 3 disasters your entrepreneur is facing and one good thing, your friend of relative will remember those 3 disasters longer than the good thing. And if there are 3 good things and one disaster, they'll probably still remember the one disaster. I'd recommend that you be vague but positive about how things are going, and if they press for details, tell them to ask the entrepreneur directly.
Another problem with friend and family investors for you, is what happens if the company goes belly-up. Before any investment is made, discuss with your entrepreneur what the reactions might be from each potential investor. If losing your uncle's money means that he can't retire comfortably, or that you'll never be invited to Thanksgiving dinner ever again, think a lot about these additional risks.
Surprisingly, also consider what might happen if the business is a success. Sometimes, this can bring the worst out of the people who you'd least expect. Greed takes over and people want a bigger slice of what's on the table. Having a formal company set-up can help reduce this problem, as well as a shareholder's agreement that each investor would sign, outlining how much you might sell the company for, and other key details.

Bank Loans

Bank loans are not a bad source of funding, if you are extremely sure that you'll be able to pay it back. Also, beware of situations where the bank asks you to secure the loan against a key asset you have, like your house. Do you really want to risk losing your house if the business takes longer to generate sales? Or worse, if it never gets off the ground?

Before going this route, look into Small Business loan programs- most governments offer some form of these, and often the interest rate is better, as well as the other terms. At the very least, go to a small business center with your entrepreneur to learn about bank loans and the risks involved.

Venture Capital & Other External Investment

This is a topic that I'll discuss more in the next article, as it's important as the Start-up Spouse to know what's involved in securing this, what's asking too much, and how to avoid some pitfalls.

Should your entrepreneur quit their current job?

2006-05-26T10:48:00.000-05:00

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?

2006-05-18T20:35:00.000-05:00

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

2006-05-17T14:48:00.000-05:00

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

2006-05-12T10:25:00.000-05:00

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?

2006-05-10T09:36:00.000-05:00

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

2006-05-08T16:05:00.000-05:00

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!

2006-05-08T16:03:00.000-05:00

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!