It’s far from uncommon. Actually, there were 2.7 million businesses owned equally by a male-female team in 2002, according to the latest studies by the U.S. Census Bureau. Of those, about 79,000 were black-owned. While it is #impossible to determine just how many of these were husband-and-wife #operations, anecdotal evidence proves many are spouses. #Couples say running a business with a spouse can be one of the greatest tests of a marriage. For copreneurs, a popular term used to #describe couples who manage businesses and families together, success requires diligent planning, constant communication, and a great deal of hard work.
For Nate and Tamiko Wayne, deciding what kind of business to open together in the winter of 2005 was their first challenge. Nate, 33, was set on starting an urban clothing store for men, but his wife had no interest in that idea. “I had reservations because I knew I would be an integral part of the business and I didn’t want to sell men’s clothes,” recalls Tamiko. Reaching an agreement “was like pulling teeth,” Nate adds.
Tamiko, 32, then a stay-at-home mom, wanted to open a #business that would be both lucrative and family friendly so that their three children, ages 4, 8, and 13, would enjoy spending time with mom and dad at work.
She convinced Nate, a professional football player with the Philadelphia Eagles at the time, that they should invest in a Cold Stone Creamery ice cream franchise instead. Through Nate’s networking contacts, they found the ideal location site in Atlanta, minutes away from their home in Duluth, Georgia.
After paying a franchise fee of $42,000 and an additional $250,000 for contracting, equipment, and supplies, the couple launched their franchise in December 2005. Franchises can be a good option for couples because their predetermined standards can help #minimize conflicts. Through trial and error, the Waynes have found an effective work-family balance and a profitable enterprise to boot. Last year their Cold Stone franchise grossed $527,150.
The Waynes are one of many copreneurial couples. Possibly the most famous example of copreneurship was hip-hop mogul Russell Simmons, who conceptualized and headed the #lucrative Phat Farm apparel line, and fashionista Kimora Lee Simmons, who runs the spin-off, Baby Phat. Though the couple separated in 2006, the two continue to work together on their clothing lines and various business interests.
According to Enlignment Inc., a Cambridge, Massachusetts-based executive coaching, consulting, and training firm that has studied such couples, the frustrations of working in corporate America, the drain on quality time at home, and the lack of stability in a shifting economy are the driving forces behind the growth in copreneurs. Joint entrepreneurship can offer spouses the freedom to run an #enterprise and the flexibility to do it on their own terms. The result of a well-thought-out business plan can be emotionally and financially rewarding.
The result of a well-thought-out business plan can be emotionally and financially rewarding.
Business Prenuptials
Before copreneurs can hang out a shingle, the business must be formalized. This includes incorporating, deciding on operating procedures, raising startup funds, creating a team-even if it’s only a two-member team-dividing roles and responsibilities, and developing a business plan.
“Many, many, people shake hands and that’s the end of it,” says Robert Sullivan, small business adviser and author of The Small Business Start-Up Guide (Information International; $17.95). “The fact that it is husband and wife makes it more #difficult because they may be too close to the situation to think rationally if there is a problem.”
But divorce, separation, and the death of either spouse are real issues, says Sullivan. The partnership agreement should be structured in a manner that makes provisions for those contingencies. Couples should also include what should be done if one spouse wishes to sell his or her stake in the company. “It may be #distasteful to talk about but it has to be concluded,” says Sullivan. To find an incorporation attorney, contact the American Bar Association or visit www.abanet.org.
The Waynes decided against setting up a formal partnership when they launched their ice cream shop and later when they began investing in real estate and started a dump trucking business. That is not a savvy move, caution experts. If their marriage ends in divorce, the businesses may be in jeopardy. With no legally binding agreement in place, one or both partners could lose the business or may be denied compensation.
But the Waynes have already beat the odds. On average, 47% of first marriages for black women end within 10 years, according to the Centers for Disease Control and Prevention. They were high school sweethearts, who married after college and have now been married for 11 years. “We’ve been together since the 8th grade,” says Nate. “Things like business prenuptials are far from our minds.”
Sentimentalism aside, the Waynes carefully separate the checking and savings accounts for each business and do not mix their business and personal accounts. To stay on track, they meet regularly with a business attorney, certified public #accountant, and financial adviser.
When the store opened, Nate was away playing football which meant Tamiko was solely responsible for completing and tracking paperwork, site visits, and other hands-on tasks while juggling housework and caring for the children. Nate managed the contractors via telephone. He also served as a listening ear for the very stressed out Tamiko. “I would call him and agonize,” she says. When the football season was over, Nate returned home with plans to fully participate in the couple’s venture. Like any partner, there were several areas where he believed improvement was needed. First, he reorganized the storage and stocking station in the rear of the ice cream shop, #because he didn’t like Tamiko’s less-structured system. “He’s a neat freak. He wanted everything labeled and looking a certain way,” says Tamiko. “In my opinion, that’s really not important. We bumped heads on that.”
Nate also had to learn how to become a better partner. “When you go into a business with your spouse, one person has to be the chief and one has to be the Indian,” says Nate. “With the Cold Stone, she is the chief and I am the Indian. You have to know where you stand.”
In 2006, with Tamiko’s help, Nate launched the second business, Wayne Transport, their dump truck service. The couple now has a fleet of four trucks that haul asphalt and dirt for seven major asphalt companies to construction projects throughout Atlanta. They also sell gravel. Nate manages the contracts and hires #drivers while Tamiko learns how to operate the company’s #dispatch system. Wayne Transport grossed $318,000 in 2007.
What’s more, the
couple has also invested in several #residential real estate properties. Along with two partners, the Waynes own a single-family property in Philadelphia valued at $1.1 million. They have also acquired a luxury condominium in Jacksonville, Florida, worth $180,000; two condominiums in Green Bay, Wisconsin, worth $175,000 and $190,000, respectively; and 1.2 acres of land in Sparta, Georgia, worth $190,000, where they plan to build an investment property. Yet, despite their varied business #interests, the Waynes are careful to give their children and their marriage the attention both need. Tamiko goes into Cold Stone early while Nate prepares and sends their children off to school, after which he manages the trucking business. The weekends and most evenings are reserved for family time. “Our nightly pillow talk is what do you have planned tomorrow and what is happening with the business,” says Tamiko. “We are in this together.”‘Til Death Do
Us Part
The tradition of black couples owning businesses is a long one, says Juliet E. K. Walker, a history professor and the founder and director of the Center for the Study of Black #Business, History, Entrepreneurship and Technology at The University of Texas in Austin. Black business activity in #America began in the 1600s and expanded in the period before the Civil War. Shortly after the abolition of slavery, black couples continued as business partners opening hotels, inns, restaurants, and catering companies, especially in the South, she says. Unfortunately, many of these businesses disintegrated #because there was no succession plan in place in the event of the death of either spouse.
Dawn Davis, owner of S.C. Franks Chapel of Remembrance in Greenville, South Carolina, and the late Melvin Davis Sr., planned for the inevitable early on by bringing their children on board and grooming them to take over the family’s mortuary business, which was founded by Dawn’s maternal grandfather in 1935. Dawn, 62, made the decision at the beginning of her marriage to be completely involved in the business while raising the couple’s five children. The family lived above the #funeral home, so the children frequently spent their free time there. At one time the family operated three funeral home #locations, becoming one of the largest black-owned funeral homes in Greenville.
“I told [my husband] from the beginning that we would be partners, both raising the children as well as working in the business 50/50,” says Dawn. “It was a challenging business venture, but it was enjoyable to work with him on a daily basis and come home and sit down at the table together.” The couple worked together to plan, coordinate, arrange, and direct funeral services, while #counseling and consoling their clients. They often spent entire days ogether and at one point, even conducted career day seminars at local schools and churches.
When Melvin passed away in May 2003, Dawn was left to #manage the business without her lifelong partner. The loss is still evident in her voice when she speaks of him.
Dawn and her husband were coprenuers for 37 years before he passed. His death left a tremendous emotional gap in the business, which was a large component of the marriage. But there was a natural succession plan, says Dawn. As she grieved, she did not worry about the future of S.C Franks. Soon, the #couple’s #children filled Melvin’s daily duties.
Today, the business has grown and has a team of well-trained professionals including two of Dawn’s children-both of whom have studied mortuary science with plans of continued expansion beyond South Carolina.Brains and Matri-“money”
Anthony Mack and his wife, Teresa, both in their 40s, say that finding a happy family-work balance has been the key to their successful copreneurial partnership. Married for 19 years with three young children, they own a Denny’s Restaurant and #operated a Del Taco Mexican fast-food franchise for a little more than a year, in the Los Angeles area. Teresa is also a #licensed real estate broker and agent.
Early in their relationship, the couple created a plan for both their careers and family. Teresa studied law at the University of Southern California and worked full time as a corporate lawyer at a West Coast firm and then as an attorney for the government. Anthony has wanted to operate a franchise since college. He spent 10 years saving money and searching for the right #franchising opportunity while working as a corporate sales #associate with companies including American Express, Eastman Kodak, and Johnson & Johnson.
To learn the operational skills needed to launch a restaurant, he began taking courses on business plan development and restaurant management with several nonprofit community-based organizations. During a course at the Ron Brown Business Center at the Los Angeles Urban League, Anthony learned about a Denny’s program that placed qualified minorities on the fast track to ownership. Anthony applied to the program, which #required a two-year commitment, in 1996. Once accepted, he took a significant pay cut to work in more than 15 Denny’s locations and learn all of its #operations from the ground up. The couple opened their Gardena, California-based Denny’s franchise in 1999 with startup costs of $325,000.
Anthony decided to focus on building the Denny’s franchise and Teresa continued to work full time as a lawyer for the next nine years so that their growing #family would have dependable income and benefits while the business grew. Gross revenues for the restaurant totaled $2.7 million in 2007.
The Macks set up Denegard L.L.C., a limited liability corporation through which they are legal partners and co-owners of their businesses. A limited liability corporation is a hybrid of a partnership and a corporation in which the owners have #limited personal liability and all profits and losses pass directly to them without taxation of the entity itself. The operating agreement, drafted by Teresa and reviewed by their attorney, provides the #couple with some personal protection from business liabilities due to injury, the dissolution of their marriage, or if the business begins to suffer financially for other reasons.
After operating the Denny’s for nearly a decade, Teresa stopped practicing law to work with Anthony in launching a Del Taco franchise. In December 2005, the Macks raised $500,000 for the restaurant under a separate limited liability corporation, Della Foods L.L.C., but sold it 13 months later due to less than desirable sales. The Del Taco grossed $860,000 in 2006 and $450,000 in the first half of 2007.
The couple works jointly on administrative and creative tasks. Anthony is #responsible for the operational side of the business including managing the store, marketing, and customer service, while Teresa handles legal and accounting #matters for the restaurant from home. “We support each other, not just financially but morally and spiritually,” Anthony says. He makes a point of reserving every Saturday for family time.
Learning to respect each other’s strengths and weaknesses and allowing each other the freedom to make decisions within their respective areas of expertise keeps both the business and their relationship strong. “You have to focus on the relationship first,” says Teresa. “If the relationship is solid then your business has a better chance to be successful.”
Resources for Your Family Business
You can find helpful, dependable advice in your area by contacting SCORE, which provides free, confidential counseling for small businesses. SCORE has offices throughout the country and works in conjunction with the U.S. Small Business Administration. Visit www.score.org or call 800-634-0245.
Key Resources is an international company that provides consulting, training, and educational services to small and family businesses. Visit www.familybusiness consulting.com.
Do You Have What it Takes to be a Copreneur
Take this quick quiz.
1 Would you describe your marriage as:
a. a happy constant
b. a good compromise
c. a roller coaster
2 Would you describe your partner as:
a. a superb business brain
b. smart in parts
c. charming but unreliable
3 Is your partner:
a. different from you-but complementary
b. similar to you but with different areas of expertise
c. sometimes better, sometimes
worse than you
4 Do you resolve differences by:
a. discussion, debate, resolution
b. ignoring them
c. knowing how to win
5 When something makes you #unhappy, do you:
a. discuss it at once
b. wait to see what happens
c. wait for it to go away
6 How would you describe your #current financial #position:
a. solid but open to improvement
b. fragile
c. perilous
7 In business, is your family:
a. wholeheartedly supportive
b. puzzled
c. negative
In management, would you say you are:
a. effective at setting boundaries
and delegating responsibilities
b. not much bothered by who does what
c. good at knowing the right way to do things
8 Being an entrepreneur is important to you because:
a. you love building something from scratch
b. you like being the boss
c. you enjoy doing things your own way
9 When you have free time, you most like to:
a. spend it with your partner
b. spend it with friends
c. spend it alone involved in your hobbies
10 Do you switch off:
a. regularly
b. sometimes
c. never
11 When you have children, you #imagine them:
a. running a family business
b. toiling in a corporate/traditional career
c. freelancing
12 I think making money is:
a. unbelievably difficult
b. largely a matter of luck
c. easy
13 In business, I would describe myself as:
a. experienced, with the scars to prove it
b. learning
c. unscathed by past mistakes
Mostly As: Give it a go. You love work and your partner and have a sufficiently resilient relationship to work #together. But don’t take that-or each other-for granted.
Mostly Bs: Businesses, like marriages, can be fragile and statistics show that both have high failure rates. Work on both-but not together.
Mostly Cs: Forget it. You love your independence too much to combine business and marriage. Enjoy your #business and your partner and be satisfied that they can support each other without being intertwined.
-Margaret Heffernan. www.mheffernan.com