Steve Wolf and his ex-wife Meagan are the owners of two Austin, Texas-based companies – Stunt Ranch where visitors leaned how to perform basic movie stunts, and a science education company Science in the Movies. Wolf had started the businesses when he was single and brought his wife aboard to do the marketing and administration of the businesses after they married. When their ten year union ended, Wolf was left wondering whether the businesses would go down along with the marriage.
Merging business and personal life is not uncommon for entrepreneurial couples. According to the National Federation of Independent Business, 48 percent of U.S. small businesses are family-businesses, with husband and wife teams the most common type. Aron Pervin, a Toronto-based family business advisor, says only 20 percent of the spouse-owned businesses he’s counselled have remained in business together once the divorce papers were signed. The majority tend to have one partner buy the other out, get sold to a third party or simply fold. Of those that have survived the split, Pervin has recognized several commonalities.
Pervin and Wolf offer their six secrets of successful divorced business partners:
1. They trust in each other.
Pervin says trust is the most important component of any successful business partnership. He says couples whose divorce results from a serious breach of trust, such as infidelity, will likely not be able to remain in business together whereas couples whose separation is simply the result of a falling out of love may be more successful as business partners because they retain trust in each other. Maintaining open lines of communication and seeking counseling may help to repair broken trust in some partnerships.
2. They hire outside council to resolve
Pervin says a board of directors made up of outside experts is one of the most beneficial ideas for any family business who may have a difficult time resolving internal disputes. Pervin has been part of several transition committees for divorcing entrepreneurs, made up of one individual chosen by each of the two parties and one advisor, typically a business coach, chosen by both to help clarify the roles of each partner and whether the couple should remain in business together at all.
3. They recognize they need each other.
Pervin says finances are the number one reason divorced couples continue to remain in business together. This was certainly the case with Wolf. "When we did the numbers of what our revenues would look like separately, that’s when it emerged that wow, we really need to work together," he says. With three children involved, the importance of each partner’s financial stability weighed heavily. Knowing they would be better able to provide for their children if they stayed in business together rather than seek outside employment meant they had to find a way to put their personal emotions aside and make decisions that were best for the business’ success.
"When you realize how important the other person is to you financially, that helps to maintain a respectful tone. This person might not be an emotional asset to you anymore but they're still important to your financial life," says Wolf.
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4. They're clear about what each contributes to the
"It’s very common in entrepreneurial couples that their talents lie in different areas,” says Wolf. “With the loss of either of them, there will be a hole in the business.” Recognizing the value each partner brings to the business has helped Wolf and his ex-wife put the best interests of the company forward and continue to grow the business together.
5. They started the business before getting
"The survival rate of couples who start a business together and then marry is higher because they’ve already worked out their relationship in the business,” says Pervin. Businesses that were started by one partner who then brought their spouse on board tend to lack clear boundaries and have overlap in job descriptions.
“There have to be role assignments, decision making parameters, a reporting structure, real job profiles and performance standards for every job. These are normal business practices,” says Pervin. Couples who began their relationship as business partners tend to have already established this structure and have an easier time reverting back to co-owner status.
6. They establish social boundaries.
While couples who are in business together are often told to keep business discussions out of the bedroom, ex-couples should keep the bedroom out of the business. Wolf says he and his ex-wife have worked hard at separating their personal lives from their work lives and don’t probe the other beyond things that are relevant to the workplace, reverting to the same social boundaries that they would observe with any other co-worker.
They agree to table personal conversations until they’re in an appropriate setting “so that we don’t contaminate and cross back and forth between work and personal in the same time and space,” says Wolf.
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