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BALANCING ACTS

When the Business Fails

It’s a fact: More companies fail than succeed. So when that happens, can the marriage survive?

Meg Cadoux Hirshberg

Gary and I have lived through so many crises, I must be a masochist for dwelling on the one awful thing that didn't happen. Still, I can't help wondering what our lives would have been like if our company had failed.

Though we both knew the poor odds of any small business succeeding, Gary believed we'd be the exception to the rule. I, by contrast, was pretty sure we had rule stamped on our foreheads. Had my prophecy come true, I don't know if we could have recovered. The loss of Stonyfield Farm would have meant the loss of our home, our lifestyle, our children's college funds. More profoundly, it could have meant the loss of my confidence in Gary. If his big bet had not worked out, would I have looked at him differently? Trusted his judgment less?

I've talked to entrepreneurs about many painful topics, but conversations about business failure have been the most wrenching. "It's just too raw and emotional for me," apologized one entrepreneur who backed out of an interview. "I don't know if I could make it through your questions; I might just cry and cry." It's not surprising that a recent loss would be so overpowering. But this woman's business went under almost a decade ago.

In the wake of a company failure, the founder's belief in himself falters, even shatters. So do many of his relationships. He feels responsible for everyone—his now-jobless employees, the lenders to whom he owes money, the investors who bet on his idea, sure, but first and foremost on him. Worst of all, he knows he has kicked his family's fortunes back to Square One, or past that, to Square Zero or Minus Three.

The spouse, meanwhile, is expected to remain strong and encouraging. If the marriage is healthy, she'll try to channel her panic into pragmatism. If the marriage is shaky, then all those recriminations built up over years of scrimping and postponing and single-parenting gush out.

A failed business consumes a couple's assets until there is nothing left. It may do the same to their love for each other.

There but for the grace of God.…

One reason business failure is so hard on marriage is that the entrepreneur and the spouse experience it differently. The entrepreneur may regret his mistakes, but he chiefly agonizes that his vision for the future will never be fulfilled. The spouse dwells more on the past, wondering: Was all that sacrifice really for nothing? The entrepreneur desperately needs his spouse's reassurance: "It's OK. You did the best you could." But, at least initially, the spouse can only splutter, "How could you?"

A woman I'll call Cynthia experiences a twinge as she recalls what she said to her husband, "Stephen," when he voluntarily closed down his Manhattan-based social networking company. "You got us into this mess," she told him. "Now you've got to get us out." The business had begun to gain traction, but not quickly enough to support a family of four. The couple had set benchmarks for the company's continued existence, benchmarks it failed to meet.

Cynthia held Stephen responsible for the financial and emotional strain that the company's liquidation placed on their 14-year marriage. "The ordeal sucked a lot of life out of our relationship," she says. Stephen was left to mourn largely on his own, just as during his company's short life he had kept Cynthia at arm's length from it, to shield her from worry. Fortunately, Cynthia came to see Stephen's willingness to shutter the business before he was forced to as testament to his commitment to his family.

The time it takes a couple to rebound is largely a function of the entrepreneur's resilience. Some founders are drawing up new business plans a month after a failure. Others become so enervated, they can't lift the page to see the next chapter.

I spoke to one woman whose husband lost his business and now spends most of his day lounging around the house in sweatpants, trying to figure out what to do. Every day the couple lose ground, depleting their retirement money and their children's college funds. They lose ground psychologically, too. The children give their father a wide berth, sensing his sadness and fearing his emotional volatility. They wonder why he is at home so much, and the wife worries that his apparent aimlessness will, in her words, emasculate him in their eyes. A crack is spreading through the family, with the entrepreneur on one side, his wife and kids on the other. Neither spouse is sleeping well. Not surprisingly, "couple time is not a priority," the wife told me.

"I am in free fall. What felt like solid ground has vanished."

Anyone who has lost a business knows how Gail Horvath felt when she wrote those words. Gail shared with me her diary entries for 2003, the year her company went bankrupt. Just Desserts, the San Francisco baked-goods business that Gail started with her husband, Elliot Hoffman, cranked out high-quality confections for three decades, until a couple of bad decisions proved fatal. The failure was especially devastating for coming after such a long run. "Our business felt solid and bigger than life," wrote Gail, "as if it would always be there, with its uncanny ability to claw itself out of any difficulty."

As Gail attests, entrepreneurial companies occupy vast psychic space. They define how founders and their families live and, to some extent, who they are. With failure, an entrepreneurial family's identity and position, as well as its security, crumble. Friends and relatives gingerly avoid the subject, treating failure—as one spouse put it—like a serious medical condition that everyone is aware of but too diplomatic to acknowledge.

The loss of a business may have one salubrious effect: It relocates entrepreneurs' noses toward roses and away from grindstones. And so, occasionally, love is reborn among the ruins.

I spoke with one woman whose husband lost his business after four years and several million dollars had swirled down the drain. At first, she had been excited about the enterprise, but she quickly grew disenchanted with her husband's prolonged absences. Meanwhile, his health declined as he smoked heavily and stopped exercising. Worse, he grew emotionally unrecognizable. During one argument, the entrepreneur told his wife that the company was more important to him than anything, including her and the kids. "That's the closest we ever came to divorce," she told me. "What saved our marriage was that the business went belly-up."

In the aftermath, her husband spent three months catching up on his sleep and becoming reacquainted with his three children. He went back to his legal practice. "It was like he had survived a war," the spouse said. "When it ended, he saw his little world was still intact, and he was so grateful."

Although the marriage of Gail Horvath and Elliot Hoffman never faltered, the bankruptcy of Just Desserts sent them scrambling for a new direction. Fortunately, they found one. "Our crisis would have been a terrible thing to waste," says Gail. Today, she works with friends in their strategy and branding company. Elliot has launched a venture that advises companies on sustainability. Gail declined to become part of that business; after Just Desserts, she will never put her personal guarantee on anything again. But she is happy to see Elliot back in the game. "It's what I love about him," she says. "He thinks big."

The week after Just Desserts cashed in its chips, Gail and Elliot went camping in the California park where they'd met almost 40 years earlier. They sought solace in nature and each other, and reconnected with their pre-entrepreneurial selves. So much had been lost. But what remained, wrote Gail, were "those things that cannot be destroyed—our love and our experience, our sense of humor and our spirit of adventure."

Meg Cadoux Hirshberg (mhirshberg@inc.com) writes a regular column about the impact of entrepreneurial businesses on families. She is married to Gary Hirshberg, president and CEO of Stonyfield Farm.

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IMAGE: Esther Pearl Watson
From the July/August 2011 issue of Inc. magazine

MEG CADOUX HIRSHBERG | Columnist

Contributing editor Meg Cadoux Hirshberg is the author of For Better or for Work: A Survival Guide for Entrepreneurs and Their Families. You can reach her at mhirshberg@inc.com.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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