Although the divorce rate has decreased in some countries over the last couple of years, it’s sad to say that many people are still opting for divorce. The end of a marriage is a problematic situation as it is, but for business owners, there are some additional problems.
The life of a business owner — especially new small business owners working on a tight budget — can be complicated and stressful. As the head of a company, you’ll have a lot of responsibility resting on your shoulders and distractions in your personal life can have a direct impact on your ability to run your company efficiently.
A divorce not only causes a fair amount of emotional strain, but it can also severely impact your finances. In this post, we’ll take a look at a few of the reasons why business owners find divorces particularly difficult. More importantly, though, we’ll outline what can be done to make the proceedings as stress-free as possible.
Possibility of Huge Financial Impact
A divorce is often considered to be one of the most stressful situations a person can be put in, and the source of much of the hardship is money. Although you will have heard the phrase ‘money can’t buy you happiness’, it’s safe to say that losing a significant amount of it in a divorce will make you very unhappy. This is even more apparent for business owners who are trying to keep a company afloat while avoiding a severe financial setback.
Losing a considerable amount of funds will not affect your ability to pay company expenses, buy stock and pay employees. That much is expected. However, it could also leave your company in a situation that’s impossible to come back from. If you lack the money to support yourself outside of work, you won’t have much choice but to dip into company funds and tarnish your business’ financial stability.
Co-Ownership of a Company
Although small businesses are common now, that doesn’t mean it’s an easy thing to do. It requires time, effort and enough start-up money to get things underway. For many people, the latter is the most challenging aspect, which is why married couples often combine their efforts and finances to establish a business. While this does make a lot of sense if you’re unable to do it alone, one thing many people don’t think about is divorce, which can be a bit of a nightmare when it comes to co-ownership of a company.
If this is the case, then serious decisions need to be made. Firstly, you need to seek the advice of a top divorce lawyer who is experienced in this type of situation. This will give you the best possible chance of gaining your fair share. You also need to establish whether or not you and your former spouse are prepared to co-exist professionally post-divorce.
This can be difficult for couples who experienced a particularly hostile divorce, and you may want to opt for the alternative of buying their share of the company. The advice from your family lawyer will be imperative, but it’s also a good idea to take some time to think about your future and let the dust settle. Once things have calmed down somewhat, you may be able to come to a reasonable solution from your ex-partner when emotions are less intense.
Reduced Efficiency and Productivity
Although some divorces are settled quickly and without hostility, all divorcees will tell you that it’s an experience they wouldn’t want to go through again. The heartache, anger and stress involved with the end of a marriage is a tough time for anyone to go through, but for business owners, there’s the additional concern and need to maintain a successful company.
There is a lot to consider and organise during a divorce — whether it’s money or a new living arrangement — which can leave you distracted and unable to carry out your duties as a business owner. Both you and your company will suffer and it could cause irreparable damage. This is where your divorce solicitor will prove to be a very valuable asset, as they take care of your legal needs and allow you to take care of yourself. It’s also important to delegate wherever possible, lightening the load while you get your personal life in order.