Preventing personal problems from becoming professional hazards

Many business owners know all too well how the personal can affect the professional when certain issues arise. Business is often innately personal as the dynamics between the people within the company and those they work with continue to change and fluctuate over time.

As you prepare to take on a new business venture, consider planning ahead to mitigate the chances of a personal issue derailing your professional goals. For instance, if your business includes multiple owners, what happens when one owner gets a divorce down the line? Does the company suddenly become a bargaining chip? Is ownership of the company considered property of the marriage?

These are only some of the potential disputes that may arise throughout the lifetime of your company, but there are others to consider as you plan ahead. You and your fellow business owners can employ a few important and effective strategies during the formation stages to insulate the business against potential future challenges.

Before you launch the business

As you are in still the planning stages of a new business venture, it may be advantageous to look at your personal affairs and preemptively plan for potential changes. For married persons looking to launch a business, consider getting it in writing that the business is not a communal marital asset and therefore irrelevant to the asset division process if a divorce arises.

This may involve using prenuptial or postnuptial agreements as a defined agreement between business owners and current or future spouses. While it can be intimidating to broach the topic of this type of agreement with a significant other, the advantage is that you are doing so as a means to protect the business, not to withhold personal assets from a spouse.

During business operations

In addition to marital concerns, there are other elements of a business owner’s personal life that could negatively affect the company. What is the succession plan for when one owner decides to dissolve their ownership holdings or passes away? Life can change in an instant, so it’s crucial to plan for these concerns while you have the chance.

Prepare a succession agreement and revise as needed throughout the lifetime of the business and its owners. An owner’s personal finances, health and other private aspects of life can potentially derail an otherwise thriving business if there is no insulation against this risk.

There is no reason a successful business should go awry because of the personal lives of its owners or high-level employees. Take steps during the initial formation process to mitigate the chances of the personal having a detrimental effect on the professional.

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