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Lessons Learned

Is It Possible To Get Divorced And Remain Business Partners?

Your business thrived, but your marriage didn't. Here's how to stay business partners with your ex.

Is It Possible To Get Divorced And Remain Business Partners?
[Photo: Flickr user allen watkin]

Stacey and Jan Roberts were a happily married couple with three children when they launched their Sacramento, California-based Unishippers logistics franchise in 1995. They were both making career transitions and had bright hopes for their future.

Three years later, their business was thriving, but their marriage was not. After months of counseling, they decided to divorce.

"My thought, when we first got divorced, was that Stacey would want me to buy her out of the business," Jan says.

But Stacey had other plans. Had the business not been so successful—the franchise even landed the "Rookie of the Year" title—she says she might have agreed to sell or let Jan buy her out. But she saw too much potential to walk away. They hired a therapist to help them manage the transition in regards to their working relationship and children, put some guiding principles in place, and made a go of it. Today, their company is a $7 million business, and Stacey is a sales superstar. She was recently named Unishippers's top salesperson, with her overall sales figures topping those of the second, third, and fourth place salespersons' numbers combined.

Still, it's tough to make a business partnership between a divorced couple work, says David Ransburg, a consultant at Family Business Consulting Group, who has an MA in counseling psychology from Northwestern University. He says that when a divorce occurs, the couple's values are often no longer aligned. "In my experience, people who decided they can’t continue as so-called personal partners probably would have a lot of trouble continuing as professional partners," he says. It's particularly tough to do if the marriage ended as the result of a serious violation of trust, such as an affair, he adds.

But some couples can make it work, as the Roberts's proved. If you want to make a business partnership with an ex-spouse work, there are some important rules to follow.

Define Your Roles

As the business grew, Jan was the "numbers guy" with an analytical mind, and Stacey was the "people person" who had a knack for sales, she says. Having these roles made the transition easier because they each had their own roles to fulfill and brought different values and skills to the company. Having those defined roles eased potential areas of conflict.

Manage The Emotions

Divorce, especially when children are involved, is fraught with emotion, even when it’s amicable. The Roberts had the help of a therapist to work through some of the rough spots. It’s important to engage board members or another objective third parties to help manage conflict, says Dann Van Der Vliet, executive director of the Smith Family Business Initiative at the Samuel Curtis Johnson Graduate School of Management at Cornell University. Excessive conflict at work can damage morale and your business, so you need someone who can help prevent poor decisions or reactions based on emotion, he says.

"I worked with one business where, actually, [the ex-spouses] were better business partners and got along better after the divorce and stayed together within the business for a while. I think what happened in that situation is the divorce sort of relieved all of this relationship anxiety, and they were allowed to focus in on the things that they were good at," Van Der Vliet says.

At the same time, creating "triangles" where one person seeks out someone who is not objective to intervene with the other spouse is not healthy and can cause serious problems, he adds.

Set Some Ground Rules

As you’re making decisions about how the marriage will be dissolved but the business will move forward, it’s important to set ground rules. Stacey says that she and Jan agreed that they wouldn’t bring their emotions to work or let them affect their children. If something was bothering them, they would wait and bring it up in their therapists’ office, she says.

Discussing these types of issues is smart, Ransburg says. "It’s fairly simple, but it's amazing and powerful to talk about being very aware of the hat you're wearing at a given point in time, because there are multiple hats that people in family businesses can wear. You have a father hat, and you might also have a husband hat, and you've got a boss hat. That's all for the same person," he says. Sometimes, creating such compartments can help personal issues from creeping into business decisions—and vice versa.

Formalize The Agreement

When spouses start businesses, they often don’t formalize their agreement to provide for the partnership breaking up, as many other partners do. Now is the time to put more formal structures in place, Van Der Vliet says. Involve an attorney to discuss whether it makes sense to create a buy-sell agreement in case one partner or the other ultimately decides to leave the business. It may also be a good idea to use a trust to protect business assets in case one spouse or the other remarries or incurs a liability that could threaten the business.

Don’t Forget The Family

Once the emotions are in check and the agreements in place, don’t assume that everything gets easier. Working parents who are also divorced business partners face an ever-changing landscape of emotions, Ransburg says. Financial pressure in the business, challenges children face, and even new relationships can create new obstacles to overcome. You have to be committed to making the partnership work and continue to manage problems as they arise, and also monitor how your children are being affected by the business and your interactions. Seeking counseling for them is also a good idea.

"In addition to the business, sometimes the children are the ones who suffer. Again, this is the role that I think a family therapist, whether you're working all together or seeking individual help, can really help keep you on target," he says.

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