Arguments about money are a frequent cause of breakdown in life partnerships and can be just as destructive in a business relationship.
Here are some typical examples of money conflicts between business partners:
- Janis believes that building relationships is a key ingredient for success in the business. Consequently, she frequently meets customers and suppliers over lunch and sends them lavish presents at Christmas time. Her partner Heather feels that the business cannot afford to spend money on such luxuries.
- Melanie sees opportunities to expand the business in Australia. This will require a significant investment of money, most of which will need to be borrowed. James is concerned that this venture is too risky, despite Melanie’s research which shows that there could be a huge potential market
- Fran has two small children and works in the business for around 25 hours a week. Jess is involved full time and is struggling to cope with her workload. She feels that the business can’t afford to take on another employee and wants Fran to take on more of the workload instead.
Differences between partners over how money is spent or invested arise from different attitudes towards money and risk, and different money values.
Very often these attitudes and values stem from childhood, but not in a predictable way. For example, someone who endured frugality in childhood may be frugal as an adult or may conversely seek a life of luxury, almost as compensation for the deprivation they have experienced.
The starting point for resolving money conflicts is to explore the differences in values and attitudes.
There are three key questions that should form the basis of discussion:
- What things were said or taught to you about money in your childhood and how have these affected your attitudes towards money?
- What is the purpose of money in your life?
- Why are you in business?
Sayings from childhood, such as “money is the root of all evil” can often instil a negative attitude towards money, which is a sure way to avoid attracting it into your life.
The purpose of money in your life will depend on what you value.
Perhaps security is important to you, or it might be that you are driven by a desire to be able to help your family or others in the community.
For some, the purpose of money is to be able to have fun and interesting experiences.
Understanding the reason why you are in business is also important. Owning a business is, for some people, simply a means of having employment. For others, being in business represents having freedom and independence.
Discussing your attitudes towards money and your values with your partner will help uncover the points of conflict.
The next step is to find ways of resolving the differences, which usually requires some degree of compromise.
Returning to our previous examples, Janis and Heather quite clearly have different attitudes towards spending money. Heather appears to be more cautious with her spending and concerned with security, while Janis is willing to risk investing money in relationships in the expectation that eventually there will be a return on that investment.
One way of reaching a compromise between these equally valid views is for Janis and Heather to agree an expense budget which is affordable to the business.
Melanie and James also have different views about taking risks and in this example a solution may be to do further research, analyse the risks involved, and put strategies in place to minimise risks and protect the existing business.
Fran and Jess appear to have different reasons for being in business and different values. For Fran, spending time with her children is more important than the growth of the business.
Ultimately, unless some compromise can be reached, Fran and Jess may find that they are unable to continue to work together as partners.
There is no right and wrong in any of these examples.
Each partner has a valid point of view that must be acknowledged and respected by the other.
As with most other conflicts in relationships, money conflicts can generally be resolved with good communication and an understanding of each other’s perspective.