Money causes tension for business partners
Working with your business partner is challenging, and when you have different spending habits, it seems downright impossible. Money issues are a leading cause of co-owners to go their separate ways.
When you’re working with your business partner, it’s important to set a budget. Let’s break down why many working business partners struggle with finances.
Even the best of partnerships experience tension around money issues. Who’s the saver and who’s the spender? It’s no wonder there’s so much tension surrounding the subject of money. Unfortunately, those tendencies to save or to spend are probably not going to change because you co-own an accounting firm.
If you’re the saver, you probably feel like your partner is being irresponsible with money. If you’re the spender, you feel your partner is too uptight. After all you have to spend money to make money, right?
So, how do you address your partner’s spending habits without stepping on toes? First, sit down to discuss your different spending habits. Don’t do this in a combative way, state the facts. Next, follow our five steps.
Working with Your Business Partner when Spending Habits Differ
Set specific financial goals
When you went into business together you probably had a common goal for your accounting firm. Now, it’s time to collaborate on the firm’s specific financial goals. Get detailed, you need to be on the same page in every financial aspect.
- What’s the maximum you’re willing to spend on each line item?
- Where do you need to spend more money?
- How much revenue will your firm bring in this year?
Sit down to establish these goals and make sure you’re both 100% in agreement.
Weigh every purchase against how it serves the goal
Once you’re both in agreement with your goals, you need to understand that every purchase you make either supports your goals or actively works against it. This is an important mindset shift that needs to happen for real change to take place. Want to grab Starbucks for the entire office because you’re generous? First, ask yourself whether $50 at Starbucks serves your financial goals. If not, it’s probably best to forgo the expense and find another way to be generous toward your employees.
Does your partner want to shell out extra cash for better looking, more branded business cards? If those cards will help establish your brand and bring in more business, it may be an investment worth making, and therefore serves the goal. Sometimes you really do have to spend a little extra. Other times you don’t.
Agree to limits
No one likes to be micromanaged. Instead, one person is in charge of the finances. And, you each have a monthly spending budget. Get credit cards with the exact limit. This builds in automatic accountability.
If finances are still an issue at this point, it’s important to bring up the subject without attacking, judging or dragging in personal issues. Consider setting up a quarterly meeting with a trusted advisor to review your finances. Bringing in a third party adds credibility and accountability to your financial discussions. Be sure to look at your own spending patterns as well. Remember that you’re both working toward the same goal, and financial problems may not always be the other person’s fault.
Plan for the Future
It’s easy to get wrapped up in the moment when making purchases. Spending less in your accounting firm now may let you give yourself a raise earlier than you thought you could, or hire an assistant to help free up time. Spending less now can lead to a bigger financial benefit in the future.
Choose Your Battles
Sometimes you’ll be able to find common ground about your spending habits, and sometimes you won’t. The latter are the times where you’ll need to choose your battles, not every fight is worth fighting. If you’re the saver, sometimes you’ll need to loosen the reigns a bit and let your significant other spend a bit more. That’s particularly true if the spending is aligned with the firm’s goal. If you’re the spender, be mindful that your spending stresses your partner.
Each time a disagreement about your spending habits arises, ask yourself, Is this a battle worth fighting? Is this something that’s going to affect our goals? If the answer is yes, then respectfully communicate that to your partner. If the answer is no or I’m not sure, you may want to pass on the battle.
Your Differences Can Be a Positive Thing
Business partners need to talk about money and finances. Having a saver and a spender working together doesn’t have to be a constant source of tension. Once you understand your differences and reign in your spending habits, you can leverage them to create an even stronger firm. Think of it this way, you’re getting at your purchase decisions from every possible angle. The saver will make sure you’re not doing much impulse buying, and the spender will be able to identify when spending a little more will actually improve ROI.
Successfully working with your business partner and reaching financial goals starts with a desire to get on the same page with your spending. You don’t have to change your partner and make her a saver or spender like you are. Rather, you DO always have to be focused on reaching the same goals and be willing to work together.
If you remain patient during the learning curve, create boundaries and routinely meet, your accounting firm will flourish in ways you never imagined. And in the end, if you find it impossible to deal with conflicts, a business coach can help you smooth out the rough edges. If you and your business partner want to increase revenue while lightening your workload, let’s talk. I offer a complimentary discovery session.