Don’t Let A Divorce Sabotage Your Business

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One of the greatest business disasters you can have befallen you is when you fail to keep your personal life and your business life separate. However, when the changes in your personal life are as profound as the end of a marriage and the breakup of a family, it’s hard to see how it isn’t going to affect your work life in one way or another. Here, we’re going to look at the steps you can take to make sure that a divorce doesn’t put your business at risk of falling apart.

Protect The Ownership Of Your Business

One of the worst possible outcomes of a divorce is that you lose control over the business that you worked hard to build. However, if you have joint ownership with your spouse or they are even able to prove that they contributed greatly to the building of that business, then that could happen. If this is a potential risk, then you might need to look at strategies to maintain control and ownership of the business, such as buying them out of the business, or even negotiating and acquiescing to some other demands of theirs in exchange for them letting go of any rights they might have to a piece of the business.

Provide Accurate Information On Your Business Finances

If your business is to be considered an asset that may be split between you and your partner during divorce proceedings, then you want to make sure you avoid the urge to hide the finances. If your business has been submitted tax returns and keeping accounts, then it’s very likely that lawyers and the courts will be able to find the truth of any finances and by attempting to hide it, you may end up losing more. Give a full and accurate account where possible, understanding that rarely is a divorce going to directly suck the money out of your business to the point that it loses viability. That doesn’t work in the interests of either party.

Avoid Letting Your Divorce Become Ugly

The deeper the personal impact your divorce has, the more likely that it is to interfere with your business, to put it simply. As such, you should do what you can to work in the spirit of good communication and cooperation, such as by working with an amicable divorce lawyer that represents both sides during the arbitration, rather than each of you dragging attorneys through the courts to fight over every aspect of the divorce. Of course, you only have so much influence over your partner. If they’re looking for a fight, you might not be able to stop them, but you should do what is in your power to bring them to the table in a more peaceful manner.

Keep Your Expenses Lean During A Divorce

For one, you want to make sure that you’re taking extra care of your business finances during a divorce, simply to make sure that the period of change doesn’t influence your spending too much. However, in particular, you want to make sure that you are not going overboard with your expenses, especially when it comes to meals and entertainment. If there are questions raised about whether these expenses are really for the sake of the business, or just for your personal benefit, it could be seen as withholding money that your spouse could just as easily be entitled to. You can use expense tracking apps to make sure that you’re only ever using them when it is strictly necessary.

Keep Your Business And Personal Finances Separate

In keeping with the tips above, you should seek to separate your personal finances from your business finances by an extra degree, if you haven’t already done so. If you have the time to do so, then you may want to set up a business bank account and make sure that you’re not handling business expenses from your own personal account. You want to avoid the muddy lines that a lawyer can go through in order to assert that you’re hiding any of your personal funds or assets in the business. It’s better for your tax purposes in general to avoid blurring the lines between personal and business expenses, anyway.

Be Ready To Re-address Your Finances

In some cases, it may be your responsibility to pay a lump sum or an ongoing payment to your partner as part of your divorce agreement. In order to do this, you may need to liquidate some of your available cash assets, which may include selling assets from the business or taking out a loan against the value of the business. If that happens, then it’s worth working with a financial advisor to get a good overview of your new financial situation, and to make sure that you’re able to keep the business afloat and manage growth despite the new financial challenge. As mentioned, the courts never seek to destroy a working business and will often take steps to avoid pushing it too far into new financial hardships, but your own finances can impact it.

One proactive way to address such challenges is by organizing an informational event for clients. This event can serve as a platform to communicate changes in the business structure or financial strategies resulting from the divorce settlement. Hosting an event helps clarify potential shifts in operations and builds trust and transparency with your clients, ensuring their confidence in your leadership. Furthermore, this is an opportunity to demonstrate resilience and a forward-thinking approach, showcasing how you intend to maintain stability and growth despite personal and financial transitions. Collaborating with your financial advisor to prepare for the event can provide clarity on key topics to discuss and strengthen your ability to answer client concerns effectively. Just to make the stress less, make sure you make use of an event planner that knows all the event spaces.

Addressing Your Mental Health

Any divorce can cause stress and can result in changes to your mental health state that need to be addressed. This stress can affect your business decisions, relationships, and priorities. As such, the sooner that you’re able to start working to address these emotional and mental health needs, the better it will be for your business. You have to take active steps to prioritize your well-being, not simply keep a lid on it, and if that means seeking professional support, then so be it. Otherwise, you might want to work with consultants who can keep you on the right track, or delegate more of your duties to trusted coworkers until you’re able to assume full control again.

Just because your marriage is ending, it doesn’t mean your business has to, as well. It’s a tough time for anyone, but that doesn’t mean that you should let it rule over every facet of your life, and the tips above can make sure of it.