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When times are good it is common for spouses not to talk about difficult topics. It takes effort and patience to talk about things where there is a lack of transparency or knowledge. Life is busy and everything is going well so why bother right? If the finances are running smoothly and the family is enjoying life daily, there is a tendency to just keep putting off tough conversations. Often, these tough conversations involve family finances and/or the family business. It’s not until a crisis hits that these conversations emerge which is usually not the best timing.
I have seen this quite often in business families over my 25 years in practice. A common situation is where one spouse is the owner-operator of a business (working spouse) and the other spouse (non-working spouse) is not involved in or aware of the operations of the business. Because the business is integral to the future of both spouses, it can cause some discomfort and uncertainty for the spouse who is not involved especially as they get nearer to retirement. However, they often do not have the confidence to speak up about financial decisions or ask questions since this is the way it has been for years. When asked about doing joint planning with both spouses, the non-working spouse often says, “No I am fine with the way things are.” When I ask the working spouse the same question, the response is quite often “I don’t have time for that, I just need to focus on maintaining and growing the business. That’s my job.”
“If the finances are running smoothly and the family is enjoying life on a daily basis, there is a tendency to just keep putting off tough conversations.”
For small business owners and/or entrepreneurs, the family business is often the lifeline of family stability and security. So, when there is a crisis and the business start to struggle, the burden of the family finances and business viability often falls onto the shoulders of the working spouse since that is what they have always done. This can often trigger them to unilaterally make financial decisions for the entire family and shoulder the entire burden. It can cause frustration and poor communication since these feelings may be internalized. The non-working spouse, at this point, may feel further isolated and unsure of the future. This is clearly not a desired scenario. I have seen this happening in today’s environment as we move through the economic slowdown associated with the COVID19 virus.
Communication and planning in what I call the Pre-Crisis stage are of utmost importance to avoid this unwanted scenario and come out stronger as a family in the Post Crisis stage. See figure 1 for a visual model of this concept.
Here are some steps your individual household can take in each stage which may help get you onto the right track.
Pre-Crisis Stage - Ideally at least one year before a crisis
Figure 2
1. Have regular family meetings. Don’t worry, these don’t have to be formal family meetings. This can be as simple as talking over Sunday dinner. Pick a different topic each week. You can use the Family Four showing in figure 2 as a guide to the different categories to choose from. Look at who is the main decision maker in each category and see where there is overlap. Delegation and assignment of roles and responsibilities is great however, open and honest communication is still recommended. You may be surprised at the level of interest and input other family members may contribute using this model!
2. Consider switching up the roles. Try putting a different person in charge of a category. Let the children do the grocery shopping or have your spouse come to work with you in the business one day!
3. Work together on solving problems. If there are decisions to be made or small problems to solve, work together as a family. You can use our Fun Financial Workbook for example to identify issues in the Family Finances circle. At the end of the workbook, each family can choose a task to complete before next week.
Crisis Stage
1. Continue with family meetings but shift the focus. During this time, it is even more important to keep the conversations going. Having said that, be cognizant of the fact that there is likely a lot of underlying stress and emotions which have not surfaced. Conversations should be light with a focus on letting each family member talk about what went well this week and what didn’t. Ask who needs help.
2. Make an action plan and prioritize weekly. This is a time for solving immediate issues that will get you back on track to your long-term plan. Ask yourself, “What are the top three things I can do this week, to get closer to where we want to be.” Can you delegate to other family members? If you did the work in the pre-crisis stage, you may have found some strengths, skills or interests of your family members that you can use during this time.
3. Manage your time. Ensure that you schedule time for work, planning and fun! Even if you can only afford to have one fun day a week, make sure you take it! This applies to all family members. It can really recharge your batteries and get you setup for the week ahead.
Post-Crisis Stage (Up to One Year After the Crisis)
1. Have regular family meetings. Continue to pick from the Family Four but add to the conversation by highlighting what went well and what didn’t go well throughout the past crisis. Review how this event has impacted each family member or each category of the Family Four.
2. Build on strengths. Use this as an opportunity to recognize the efforts of each family member and possibly new skills obtained through the crisis. Perhaps this means getting more people involved in the business in areas where they can add value.
3. Revisit your values. If you can, it is ideal to agree on a list of guiding values that you will all live by going forward. There is no better time than when going through a crisis to reflect on some key themes that kept everyone going. This can help when the next crisis starts.
As you can see there is a key theme to all of these stages. Family Meetings. It is a well-known fact that family meetings are one of the key pillars of continuity in a family enterprise. You will be stronger when you work together. It may take some time to get this process going and it may look different for everyone. But even if you try one item from this list to start, it will be progress.
“You will be stronger when you work together.”
We know from well documented research (see the link below) that family businesses thrive when family meetings take place among all families involved in the business. But if you are part of a larger family business with many family members involved, don’t forget about your own family through all of this. I call this the “nuclear business family”.
What does your family need and want to maintain financial security and happiness?
Having your own internal family meetings helps your family navigate and communicate better which can result in better outcomes for all. It can help guide your own purpose, values, vision which you can then always bring to the table of the greater family enterprise if applicable. The stronger the family, the more sustainable their financial future is and their overall level of happiness. No matter how big or small your business is, it is never too early to start putting a few pieces in place to promote better communication within the family. Why not start now when you are already spending quality time together. If you find this difficult to start on your own, you can find an advisor who can help.
Links to external research.
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Susan Brown CLU®, FEA, CFP®, RRC®, CIM®
Insurance Advisor ǀ Propel Insurance and Advisory Inc.
T: 403-616-7699ǀ susan@propeladvisory.ca
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