If You Run a Company Together, What Happens When You Divorce?
Want your business to appear in Entrepreneur magazine? Tell us how you're empowering employees, and you could be selected for a full-page promotion provided by Colonial Life.
No one wants to think about think about getting a divorce, especially when you work with your spouse. Michelle Crosby gets it. No really – she does.
Crosby is the CEO and co-founder of Wevorce, a mediation-tech startup focused on helping couples amicably divorce. A child of divorce and a divorcee herself, Crosby fully understands the complexities having an evolving relationship with an ex: she and her ex-husband, Wevorce COO Mark Michaud, continue to work together. It hasn’t always been easy, but with his help, she and Wevorce co-founder Jeff Reynolds have created a company that provides divorcing couples with the tools, attorneys, counselors and other experts that make the transition as amicable as possible.
Crosby has seen hundreds of couples in the process of divorce, and hundreds of different outcomes. Some split up the business and some continue to work together—there’s no right answer.
No matter what decision you make, there are six keys to sorting out your business as you go through your divorce.
1. Create divisions between legal, financial and emotional issues
Divorce is more than a legal split. If you’re working together, you’ll need to sort out how to best deal with your business, finances, any children you may have and more. “Create buckets so they don’t get the [legal, financial and emotional] issues mixed up,” advises Michelle Crosby. “We always start with separating what the issues, needs and desirable outcomes are.”
When you’re breaking up a romantic relationship, the tendency is to allow personal issues to complicate business relationships, and vice versa. “We have to untangle it,” says Crosby. “When humans hit conflict, we tend to ball it all up.” Take time to set your specific needs and ideal outcomes are in each area, with concrete and separate goals and plans.
2. Don’t do it alone
During the split, you’re going to need back up—both legal and emotional. For your business, there’s no one solution. “There are 101 ways to separate a business,” says Crosby. Sit down with a mediator with business and financial background to find out the specific options in your business, whether that means continuing to work together, having one person buy the other out of the business or shifting roles.
While you may be willing to accept legal and financial aid, don’t forget that it helps to have people on your team emotionally as well. “I always recommend counseling,” says Crosby. If you continue working together and are bringing emotional issues into work or bottling them up, it will be incredibly difficult to effectively manage a business. Create a team of friends, family and professionals who you can count on as your rework all facets of your relationship.
3. Take a break
When Crosby and her husband split romantically, he took a break to travel – the only way the pair was able to eventually work together again at Wevorce. Immediately after a divorce, no matter how amicable, there is going to be a transition period. Take time apart in all areas to better understand what you want instead of rushing to break up the business or stubbornly attempting to stay together. “Time heals everything,” says Crosby.
4. Define your roles
As you redefine your relationship, you should draw clear lines around your roles and responsibilities at work. “You really have to redefine your relationship,” says Crosby. “Identify what task each person will manage… so you don’t end up micromanaging each other.” With defined roles and communication, working together doesn’t necessarily have to mean constantly collaborating, which can be emotionally taxing and lead to more emotional reactions.
Additionally, by defining roles you’re able to able to identify why—or if—the two of you should continue to work together. “Logically identify the skill set that each other have,” says Crosby. For Crosby, her ex-husband brought a key to the business that was necessary for success. By identifying these skills, the pair was better able to work through any difficulties as they redefined roles.
5. Give yourself an out
While there are definite benefits of working with someone with distinct, proven skills, accept that your ex may not still be the right person to work with. “It’s so hard to get through all of that and do it well,” says Crosby. “For me, I know the company works so much better... with someone who knows me so well.”
However, while Wevorce has thrived under Crobsy and Michaud’s arrangement, she realizes it is hardly the right choice for everyone. If you can find someone new with the same skills, your relationship can be significantly simplified, at times for the better. Further, even if you decide to work together, you need to be careful to give yourself an out if your business relationship begins to deteriorate. Make sure all company bylaws have an exit clause you both agree on, in case at some point one of you wants out of the business.
6. Accept an evolving relationship
As you move forward as ex-spouses and maybe-business partners, realize that no decisions have to be final. Just as you should put an exit cause in your bylaws, accept that months, or even years, down the road your positions in the company may shift. By taking the pressure off making all your decisions at once, you can give yourself time to adjust to your new relationship. “It takes time for everything to settle down,” says Crobsy. “Sometimes they aren’t tidy.”
Related: How to Divorce-Proof Your Company