Many people find themselves overwhelmed when confronting divorce. Having a family business can further aggravate the stress associated with divorce. However, there are steps that business owners can take to alleviate some of this stress. Below are a few tips to consider when approaching your divorce as a business owner.
Focusing on your priorities is, perhaps, the most important approach to divorce. No one can dictate your priorities to you – only you can choose them. For many, the priority is their family, home, or family business. By focusing on your priorities during the divorce process, you protect yourself from wasting resources on unnecessary battles. For example, a past client had made clear that getting back to business was her top priority. Throughout the divorce, she chose to avoid drawn-out buyout negotiations, and instead opted for a quicker resolution. By not wasting time on areas that weren’t true priorities, this client was able to get herself back into focusing her energies on operating the business sooner.
Another one of the most significant aspects of divorces involving a family business is the business valuation. Before any decisions can be made regarding the business and its future (such as a change in ownership structure or winding up of the enterprise), the spouse’s or spouses’ ownership interests in the business need to be assigned a value. Several methods exist for determining the value of a business.
Once the business’ value has been established, you can turn your attention to the business’ future. Typically, clients can choose from several paths, including continued co-ownership or some sort of change in the business ownership structure. Regardless of any preconceived notions or anecdotes from friends, remember that a hard partition of the business is not always necessary. Some couples do choose to remain business partners even after their marital partnership has ended. Think back to your priorities for the business and let that principle guide your decisions.