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“Mom and pop shop.” This common term for a small family-owned business makes it sound like a cozy little operation where the owners live and work harmoniously together to make their shared dream come true. The reality, for couples who are both personal and business partners, is likely to be far more complicated.
Among the challenges for couples who operate businesses together is the potential for conflict and misunderstandings around money. Exploring both partners’ money scripts, perhaps with the help of a financial therapist, can help resolve such conflicts. This is the theme of an article in the February 2021 issue of the Journal of Financial Therapy titled “Integrating Financial Therapy within Family-Owned Businesses.” (I am one of the contributing authors.)
Money scripts can be divided into four general categories: money avoidance, money worship, money status, and money vigilance. Most of us tend to have money scripts predominantly from one category. None of these are “good” or “bad;” all of them can lead to both useful and detrimental behavior. Here are some ways that behavior based on these money scripts can create challenges for business owners.
Money Avoidance. Those with these scripts might have trouble creating or following business cash flow plans. They may avoid dealing with financial information such as bank statements, neglect important tasks like filing tax returns, or relinquish too much financial control to employees. Unconscious beliefs that wealth is evil or poverty is virtuous could lead them to undercharge for the business’s goods or services.
Money Worship. These tend to be “money equals happiness” scripts and are often associated with workaholism. Business owners with these beliefs could tend to work even longer hours than the business requires and expect their partner to do the same. They might underpay employees or underspend on business expenses.
Money Status. Those with these scripts could be tempted to overspend on image-related items like luxury offices, cars, or owner salaries before the business can afford them. They may hide spending from their partner or accountant, take too much financial risk, or rely on unrealistically optimistic expectations about business profits.
Money Vigilance. These scripts can result in chronic anxiety about the financial health of the business. Those with money vigilance might be reluctant to take risks or invest in the business, underpay themselves and employees or underspend on business premises and equipment, and have difficulty trusting accountants or other financial advisors.
Partners whose money scripts tend to be opposites might have more overt conflict. Dr. Ted Klontz, one of my co-authors of Wired for Wealth, often said when two people fight about money, it’s not them fighting, but it’s their money scripts. Having many similar money scripts can also create challenges: consider the potential consequences of two money-avoiding business partners, for example. Just to complicate things further, both partners’ money scripts will affect their personal lives as well as their business. Balancing their shifting roles around money between home and work is another common source of conflict.
Because of the complex financial relationships involved, any couple-owned or family-owned business is likely to benefit from consulting a financial therapist. Simply building awareness and understanding of one another’s money scripts can be valuable. In addition, financial therapy can help family members build skills to communicate more effectively around money concerns and reduce shaming and blaming each other over money behaviors. It can help them learn to reframe their money scripts in more positive ways. Many of the differences in their approaches to money that have been sources of conflict can be developed into complementary strengths.
Financial therapy can serve as a useful tool to build financial health for both businesses and families.