Small Business questions

DH and I have a small business. Both qualified in the same field, although I dont yet work for the business and work in a related field for an employer.

I am thinking of quitting my job working in the business together. I will do a fraction of the type of work he does and mostly concentrate on my area of expertise.

Lets use an analogy, as I dont want to identify my profession at this point....

BUSINESS NAME

Lets say we are both qualified Chefs. DH has a good reputation. After my quals, I decide to go into selling restaurant equipment to other chefs. So sort of in the same industry as a whole, but also different. My job can benefit his profession, but his cannot benefit mine (this is non-negotiable).

I have advertised my services under our business name (on our web page) but nothing much has come of it - which is fine as due to a conflict of interest in my current job, I can only take very select clients.

I will soon quit my job and DH and I will more aggressively promote our services. I don't know whether to keep one business name for both of us (which will add a bit of cudos) or have a separate name for my side of the business, which will list the specific service I offer (ie the company name is (fake) lets say 'Bloggs Chefs'. Would I stay as 'Blogs Chefs' for my business - a boutique but established name with established reputation or create my new company 'Blogs Kitchen Supplies' or change the entire name to 'Blogs Chefs and Kitchen Supplies'.

This is a question for our accountant for sure - not quite ready to go there just yet, other than that, not sure who to talk to for advice. We have taken a huge hit since COVID so money is tight and need to be careful where we spend it.

BUSINESS PLAN

I usually do the business plan - although have yet to complete one in its entirety!!

Would you recommend one overall business plan or one for his business and one for mine? Keep in mind, it is my hope to do some work in his field too but majority mine.

Second, within our businesses, we each offer different services. Keeping the chef analogy, lets say he has discrete divisions - Asian, French, Italian and fast-food cuisines. Then mine would be gas/electric equipment, pots pans and utensils, gourmet food ingredients

We would share expenses. We pay a fair bit annually for technology and I can adapt his software for my arm of the business or I can get something specific but $$$ anually.

Would love to hear your thoughts which I would use as a basis to discuss with my accountant.

thanks

Ed to add: [glow=red]Please dont quote as I will delete certain parts of my post down the track, thanks[/glow]

Thanks for that. See I dont want to get into doing a percentage of rent and bills split. We can co-exist well. Part of what he will be doing in the future may have outcomes that I could easily service and he would refer to me rather than my competitors. I dont mind PMing the nature of the business, I just dont want to put in in the public arena

Things like software, accounting, business registration etc may give you some savings by sharing the same business structure. You could do 2 budgets and see if these sorts of costs are significant.

If I was a client or in the industry I would probably like to understand your personal/professional relationship if it was going to be relevant to my circumstances. So if you husband would only refer to you for areas of your expertise and not other people or if you were tendering/collaborating on. A quote. But this is hugely industry specific. If I saw a Physio and they referred me to a massage therapist I would be interested to know that you are husband and wife and only refer clients to each other but it wouldn’t be a deal breaker.

I think you also need to consider the risk of one side of the business not doing well and the impact it has on the other.

If one goes belly up, as a separate entity the other is protected. As one entity, you could both lose everything.

Grumbles, you make a good point, thanks. I imagine that if DH was recommending my services, the option of an inhouse service would come up at the get go, ie we/the business also offer these services. In this way, it would be a multi-disciplinary service. I imagine that there would be a discount if the referred people use our services. I would not announce that we are husband. Our last names are the same. Thanks again.

Thanks Tinsel. I think if one side of the business faded away, it wouldnt be the end of the world. Its more getting my business off the ground, hence I want to gain experience in his side of the business

Hi Blondie

As per Chaotic Pogo, I think you’ve actually got a few issues here as it’s important to separate them:

1. Branding

2. Legal structures of the two (potential) businesses

3. Flowing out of that, accounting and related issues, such as rent, IT etc

The branding and the legal structure can be entirely different matters, although they may not be. I definitely recommend seeking legal advice about the pros and cons of different structures so that you can pick the lowest risk/highest benefit structure for you.

Regarding the branding, it’s difficult to say without some more info as to what might be best, appreciating that this is a public forum. I think the issue a PP raised about whether you would be selling to your DH’s competitors is particularly relevant, and I wasn’t really clear on your answer, I’m sorry.

I hope that helps.

Thanks for the reply, JuicyLife. taken on board!