Wednesday, June 6, 2012

Motel Marriage

One of the successful dynamics of many small businesses is the combination of a husband and wife team that own and run a business - this is particularly prevalent in motels. They throw themselves into the business and with the one partner closely critiquing the other, there is no time to welsh on the job at hand.

Employment laws don't apply to a husband and wife business owners that will generally work 7-days and if they are honest with themselves, this often below the minimum wage for their efforts. Although they work hard, the husband and wife business owners are passionate about what they do (at least in the beginning) so are motivated to succeed. It's amazing how highly motivated someone becomes in order to try and stay afloat after borrowing a large wad of cash from a bank to purchase a business.

Working alongside your significant other does have its advantages and when it works, its a formidable force against other business combinations. The trouble is when things go wrong rational thinking gets thrown out the window and unfortunately I've seen many examples. Often it's hard to fathom what came first - was it the break down in the relationship? or was it the business starting to struggle over hard times?

Most people compartmentalise their lives by separating their marriage, family and business into nicely transferable commodities. When a husband and wife purchase a motel, suddenly everything is brought together under one roof - for a small majority this has the makings of an explosive outcome.

I was interested to read about a husband and wife that purchased a Whangarei motel business for $620,000 in 2006. Less than 4-years later the "flourishing" business was brought to its knees and the landlord took over after the rent was unable to be covered.

The wife blamed the husband for the business's demise due to his alleged irrational and self-destructive business decisions that occurred as the dysfunction in their relationship escalated. It was reported that the husband withdrew from most of the day-to-day operation of the business and allegedly froze the company's bank account by falsely notifying the company's bank that Ms McKay had been removed as a director via his solicitor.

Further sabotage occurred by the husband allegedly instructing suppliers not to deal with his wife and  thwarting the sale of the businesses.

The wife won compensation of $293,071, plus legal costs in the High Court against her estranged husband. The immediacy of receiving anything from this judgement would appear to be uncertain with the hapless wife claiming to have lost all of her life savings and is about to lose her home due to a mortgagee sale.

So, the moral to this story is....if you are a man that plans to purchase a business with your spouse - play nicely with your wife!

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