I started my retail florist business 4 years ago. Its growing, and going well, but of course cash flow, BAS, tax etc are all challenges. I am paying off a $50,000 debt slowly but regularly.
My boyfriend (also a florist) quit his other job, and joined my business. Of course, he is doing more hours than he is getting paid for. We are both working 40 hours per week. As much as he wants to grow the business with me, I am still protective of what I have grown on my own. He joined 7 months ago, and we both work very hard, physically, every day, and do what is needed.
I complete all of the paperwork and bill payments, quotes etc, with the help of my bookkeeper (and often after hours). He does not assist at all, in this department. There are some issues starting to occur: he wants some sort of financial guarantee just for the extra hours he does (which might be 20 to 30 per week depending on what jobs we have on).
The extra hours are due to us starting at 3:30am three days per week, to go to the flower market, and then working all day in the shop. We are trying very hard to have allocated days off, but sometimes that does not happen, and this annoys him every now and again. I know we need to go and get business advice, but want to know from who? How do I protect what I have built, but look after him also? Thanks for any advice.
Top answer provided by:
Thank you for taking the time to ask your question. As a small business owner myself, I can appreciate the need for more ‘hands on deck’ and have also struggled at times to fit life into the 24 hour days we are given.
Before tackling your question, I would first ask you to think through the next five years of your business and reflect on what you truly want from it. I suspect you will have two broad choices, either taking on a business partner at some point or remaining in full control.
If you want to remain in full control and do not want a business partner, unfortunately you will have to have an upfront and tough conversation with your boyfriend and explain that the extra hours must cease. This may mean you have to hire an extra person part time, which will obviously cost you extra in wages in the short term. However, it will reduce your complexity and cost substantially in the future if things don’t work out.
By being upfront with your partner, he will have more certainty about his role in the business and what is expected of him. No one wants to work for free and he will only end up feeling resentment if this continues. If you chose this path, you could potentially research some bonus structures so your boyfriend receives compensation if the business meets certain targets (sales, profit, etc). You could also consider engaging a Human Resources professional to assist.
If you want to take on a business partner, it is essential to do so properly by engaging an accountant and solicitor. They will be able to assist with determining the most appropriate business structure and exploring the various funding options so that your boyfriend can become a part owner of the business. You have built the business up to where it is and therefore should receive some compensation for selling part of it to your boyfriend. The following government website has some useful information about small business https://www.business.gov.au/.
Another important point regarding bringing your boyfriend into the business is that your solicitor will also prepare business agreements detailing what will happen if things do not work out (ie your exit strategy). When going through this process, you both need to have input into and agree on the exit strategy. This will protect you both and also reduce potential disputes. Although uncomfortable, these conversations are extremely important and need to be done at the start of a new business partnership rather than the end.
Thank you once again for your question. We wish you all the best in your future endeavours and hope it all works out for both you and your boyfriend. Sally, with this in mind please note that I have not taken your full circumstances into account and you should engage with a financial adviser to discuss this in full. Most advisers will offer you a complimentary first appointment so you don’t have anything to lose.
Bridges Financial Services Pty Limited (Bridges). ABN 60 003 474 977. ASX Participant. AFSL No 240837. This is general advice only and does not take into account your objectives, financial situation and needs. Before acting on this advice, you should consult a financial planner.
While the Adviser Ratings Website facilitates the question and answer functionality, all such communications are between users and authorised financial advisers, of which Adviser Ratings has no affiliation. Adviser Ratings is not the advice provider and does not provide financial product advice and only provides information that is general in nature.