Married to the Company: When Your Business Partner Is Your Spouse

A House Divided: When Your Business Partner Is Your Spouse

ByABC News
April 11, 2012, 8:22 AM

April 11, 2012 — -- Last week's report that Apartment Therapy co-founders Maxwell and Sara Kate Gillingham-Ryan are putting their marriage on ice had the wonderful world of web gossip clamoring for details: Will one of the pair leave the business? Will they continue to work together despite their fizzling relationship? What the heck will become of their wildly popular interior design site?

For the bloglebrity world, it's déjà vu all over again. In January, Dooce founder Heather Armstrong and hubby Jon announced that they were separating and that Jon would be leaving the couple's online media empire.

Husband-and-wife teams own and operate nearly 4 million American companies, according to the U.S. Census 2007 Survey of Business Owners. Unfortunately, it's not unusual for spouses to launch a business together only to later realize they no longer want to be married. And what a waning marriage might mean for the business it birthed is anybody's guess.

Happily Co-Owners After?

"If they're willing to stay friends and business partners, it's a huge achievement," said Lara Feltin, CEO of Biznik, an online networking community for independent business people, which she co-founded in 2005 with husband Dan McComb. "I empathize with how hard the decision is and know there's no simple solution."

Experts add that if there's no business agreement in place when a co-owning couple calls their marriage quits, things can turn nasty fast.

"I've watched people lose multimillion dollar businesses over this—all because they don't have a contract," said Scott Gerber, serial entrepreneur and founder of the Young Entrepreneur Council, an organization that supports young business owners. "And then it just comes down to who's going to outspend the other in legal fees."

Small businesses have enough cards stacked against them as it is. Factor in the nation's whopper of a divorce rate, and well, you do the math.

Not long ago, Feltin and McComb, who started Biznik as newlyweds, nearly joined the ranks of small businesses rocked by domestic dissent. In 2009, both their marriage and their business partnership were on the rocks.

"We'd started to develop different opinions about how the business should go and what the brand of the business was," Feltin said. "The fighting was getting unbearable."

But it wasn't just a difference of professional opinion. The couple's personal life was on the skids, too."We were spending 23-and-a-half hours a day together," relieved only by quick trips to the gym or runs through the neighborhood, Feltin explained. And, she added, "we were always talking about the business."

"We both knew it was an intolerable situation," McComb said. "Either one of us had to go at work, or one of us had to go at home."

The breaking point came when the couple started arguing with each other at work, loudly, in front of their employees. After "one particularly ugly altercation," McComb stormed out of the office and made a life-altering decision: "I decided that I wanted to be married to her more than I wanted to be running a company with her."

McComb didn't return to work the next day. Instead, he immediately stepped down from the business.

In Contracts We Trust

In retrospect, Feltin admits it would have been wise for her and McComb to have discussed the direction each envisioned for their business from the get-go. Ditto for their definition of success and the role each would play in getting the company there.

Experts agree that hashing out who owns, decides and does what in a business partnership is a must.

"I don't care if you're married. I don't care if you're not. Every partnership needs something in writing," Gerber said. Although it may seem like overkill for co-founding spouses to lawyer up and create a business contract, it's your smartest move, said New York business attorney Nina Kaufman, who runs the popular website Ask the Business Lawyer.

"There's an extra layer of mess any time you're going into a business relationship with a family member or friend," Kaufman said. "You want to be even more formal because of your personal relationship."

Better to take the time to hammer out the details of your entrepreneurial relationship while you're still basking in the glow of your winning business idea, Kaufman said. That way, she added, you avoid making the all-too-common mistake of assuming you're on the same professional page as your sweetie without having discussed the finer details first. And if the martial muck should hit the proverbial fan, you—and your business assets—will be better protected.

As for Feltin and McComb, their marriage weathered the entrepreneurial storm and the two attest to being happier than ever. With Feltin at its helm, Biznik has moved to a subscription membership model and will launch a new online product this spring. Although McComb remains a co-owner in the business and occasionally acts as a sounding board for Feltin's ideas, he's forged a new career as a documentary and commercial filmmaker.

"Now we have new things to talk about over dinner," Feltin said. "It's really revitalized our relationship."

Or as McComb put it: "For us, business and marriage do mix—just not the same business."

This work is the opinion of the columnist, and in no way reflects the opinion of ABC News.

Michelle Goodman is a freelance writer and former cubicle dweller. Her books include My So-Called Freelance Life: How to Survive and Thrive as a Creative Professional for Hire and The Anti 9-to-5 Guide: Practical Career Advice for Women Who Think Outside the Cube. Follow her at @anti9to5guide.