BYU Strategy Professor Finds Adding a Spouse to a Small Business Pays Off

PROVO, Utah – Jun 21, 2013 – Bringing your spouse to work could yield big dividends, according to a new study authored by Brigham Young University strategy professor Gibb Dyer. Recently published in Family Business Review, the study found that adding a spouse to a small business can lead to increased family income with no adverse effects on the firm.

Using a dataset from the Panel Study of Income Dynamics, Dyer examined the financial outcomes of transitioning from a single-owner firm to a copreneurial business, involving a husband-and-wife management dynamic. Dyer’s findings disproved his initial hypothesis that the financial health of the firm and family would suffer as a result of the change.

“Although both findings were unexpected, the results are very significant,” Dyer says. “We think the reason family income increased is that the husband and wife first looked at what would make financial sense at home. The spouse was hired to benefit the family’s income, not the business.”

Dyer’s study examined a firm’s profitability and family income before becoming copreneurial compared to where the firm and family stood two years later.

“I expected these small business owners, who typically aren’t willing to delegate decision-making authority, to clash with their spouse and hurt the business financially,” Dyer says. “These copreneurial businesses, though, found a way to incorporate the inexperienced spouse in such a way to do no harm financially.”

The study found that family income went up irrespective of the spouse’s pay or how many hours they contributed to the business.

“We don’t have any details on how these families were able to increase family income without hurting their business, but it is obvious it made more sense from a financial standpoint to pay the spouse a wage,” says Dyer.

With these findings, Dyer will next research how copreneurial businesses impact family life. Dyer currently is the academic director for the Ballard Center for Economic Self-Reliance and is a recognized leading authority on entrepreneurship. Publications such as Fortune, The Wall Street Journal and The New York Times have cited Dyer for his work on family business relationships and start-ups.

“Professor Dyer consistently does some of the most interesting research in family business,” says Gary Cornia, Marriott School dean. “He is a leader in this fascinating field, and his work speaks for itself.”

The Marriott School is located at Brigham Young University, the largest privately owned, church-sponsored university in the United States. The school has nationally recognized programs in accounting, business management, public management, information systems, and entrepreneurship. The school’s mission is to prepare men and women of faith, character and professional ability for positions of leadership throughout the world. Approximately 3,000 students are enrolled in the Marriott School’s graduate and undergraduate programs.