Corrected as of May 11, 2015. Original draft blog was inadvertently published April 29, 2015.
Divorce is never easy and always painful. But as an entrepreneur divorce can put your business in serious jeopardy. There is no magic bullet; and the process is going to awful if both parties are not amicable, especially if kids are involved. Here are 4 tips to protect your company as part of your divorce.
Fight for anything that speeds the process and against anything that delays the process. The lawyers do not have an incentive to settle early and delays bleed you of cash. Speed will save you exponentially, both emotionally and financially.
Pay him/her off
Bite the bullet and write the check if you can afford it. It is better to end it quickly even if it costs more. The emotional trauma bleeds into the biz and will cost you much more than the dollars you see. If you don’t protect the business, nobody will have any money. So even when you win, you lose. If I had a nickel for every time I heard, “I just should have paid him/her off”.
Nothing in your business life will really prepare for you for the unfairness of the court (especially family court) system, the lack of common sense, and just the overall absurdity of the entire process. Hopefully you are divorcing a rational spouse, but if you find yourself married to a narcissist, all bets are off. If you find yourself in that situation, the next step is critical.
Build a war chest
Gather every dollar you can to fight the battle. Perseverance is the key to emerging bloody but alive. Borrow heavily now (you can always pay it back if you don’t need it). Get every line of credit you can, even though you don’t need it, because banks only lend when you don’t need it. It will provide the capital for a long and ugly battle. Your lawyers will help only you until you can’t pay them. And by the time you can’t pay them, the process is too far along to get a loan. Then you are fighting your spouse and your lawyer. Lawyers that don’t get paid don’t work.
There is no way to sugar coat the process you are getting ready to experience. It is going to be emotional; it is going to be uncertain; it is going to be really expensive; and it is going to take time. But one day it will be over, and you will survive. Entrepreneurs have a leg up on the rest of the world at dealing with divorce. Business teaches us how to deal with adversity — which it the key to getting through a divorce.