Divorce is hard on everyone in the family from the top down, as friends and business relations are likely to get involved in even the smallest way when it comes to splitting resources. To avoid financial failure, be sure to get sound financial investment advice at the onset and maintain a system of reviews over your business just in case a familial crisis should occur.
Legally binding business
At the inception of a company, just like in a marriage, there should be financial guidelines and terms in place to protect the individuals involved. If you open an account specifically for the business, access and maintenance writes should be established in writing, while responsibilities or entitlements to each specific bill or assets should also be explained. A partnership agreement, like a prenuptial arrangement, will outline who is responsible for what.
"Eighty percent of small businesses…don't have any partnership agreement," said Financial Divorce Specialist founder Wendy Olson-Brodeur in an interview with The Globe And Mail. She said owners may choose not to plan ahead because they feel secure within the current environment, but just like with the economy, nothing can be completely certain. "Even those that do [have an agreement] almost never cover divorce of the partners. I've found people think divorce can never happen to them. But it can."
Stay on task for success
The process of divorce can be long and arduous, but staying focused on the business can help ensure its financial future is intact regardless of how things work out. Since just about 50 percent of marriages will end in divorce and only 10 percent of businesses close annually, according to the Small Business Administration, a divorce doesn't necessitate closing the company, even if assets are shared.
Work with wisdom
If you begin a business relationship the same way you start a marriage, you should try to incorporate financial tips into both, as each represents a serious legal contract that will have far-reaching implications should it ever be broken. A seasoned financial planner or responsible legal representative should be on-hand to help you make decisions that could prove critical to the financial health of a company. Good planning can ensure good relations for the long term.