The connection between insolvency and divorce

Last summer, I was introduced to a company that was in financial difficulty. It was only a few weeks away from insolvency and, although options were available, it was important to establish what direction the two directors wanted to take the business in. That would determine the relevant strategy. So, I sat down with the pair of them to find out what they wanted to do.

Now, it is not unusual for business partners to have a difference of opinion on how they want to proceed. But this particular relationship had an extra bit of spice to add to the mix.

The directors were married to each other.

As a consequence of the huge levels of stress created by the business problems, added to the fact that they were around each other all day and every day, the relationship had completely broken down. They were completely unable to have a sensible, focused business discussion without launching into a tirade of abuse and accusations. Consequently, my first few meetings with them were essentially marriage guidance counselling sessions rather than about business resolution.

Now, I’m a big believer in there not being an absolute right answer to any situation, just an answer that is right for the individual at the time. Here, the right thing for her was to step away from the business and, as a consequence, the relationship. Which is what she did.

Fortunately, in this case, there was a happy ending. I was now able to encourage him to get his focus back on the business, which he turned around and built back up again. Removed from the intensity of the specific circumstances, the relationship slowly got back on track and, after a few months of being apart, they were back together and back in business.

However, this example is the exception rather than the norm.

Even when there is no business relationship in the marriage, the stress imposed on an individual with a struggling business is so intense that the pressures can roll over into their family life. I’m not sure if official statistics exist but from my own, limited, research approximately a third of business failures lead to a separation or divorce.

What was also interesting was the reverse statistic. Just under 20% of the business failures that I encountered came after a marriage break up.

The time and energy that is required to deal with the collapse of a personal relationship impacts on the amount of focus that an entrepreneur can give to their business. And, once their eye is off the ball, the business can easily find itself on the downward spiral to oblivion.

I’m pretty sure that these findings will not be a huge to surprise to anyone working in either the divorce or the insolvency arena. However, I’m not sure that there are many people doing anything about it.

Stronger contacts between personal and business advisors, along with an appreciation of the wider issues that may arise in either situation, can only be better news for all parties concerned. This is why, alongside the support and advice on business issues I provide, I refer clients who are having marital difficulties to Dovetail Divorce Solutions Ltd. At Dovetail they can access the emotional, financial and legal support and advice they need to get their personal lives back on track. The Dovetail team are committed to support the client to reach an amicable solution to their problems, be that repairing the relationship or splitting up in a respectful and constructive way.

Let’s start taking more care of business owners, so that they’re better equipped to take care of business.

Andrew R Miller, is the owner of business turnaround company, ARM Coaching and author of business book Hope Won’t Pay the Wages.

For more information about Andrew please visit and

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