Money can be a cause of stress in any relationship, so what happens when one partner decides to invest in the other's small business. Can this have a happy ending, or is it headed for disaster? If your partner or spouse does offer you money, what should you do? Below are some responses that could help you navigate the situation more effectively.
1. Offer to review your business plan together.
They are becoming an investor, you have to treat them as such. Meaning, you need to let them understand exactly where the money will be going, how the funds will be used and what exactly the terms will be. If you don't have a detailed business plan, then this is a good time to develop one. It should cover every aspect of the business to include long and short term goals.
2. Meet with a financial advisor together
A financial advisor may be able to identify things that perhaps you and your spouse have not. Meeting with one together helps to ensure you're all on the same page moving forward. Not to mention, you can address future issues, such as, what if the company requires more cash down the road? Or, will your spouse have a stake in the company?
3. Refuse the money
Sometimes it is better to work with someone to whom you are not married. A venture capitalist, for example, maybe a good solution if you require investment money. Always express gratitude if your spouse is offering you money, certainly, but understand that this can be a tricky situation. Plus, if things do go badly down the road, your business not only suffers, your relationship will as well.
At First Union Lending, we work with small businesses all the time that require additional cash to keep their company moving forward. With short term loans and business lines of credit, we can get your money quickly. Call today to see how we can help!