Last week's report that Apartment Therapy co-founders Maxwell and Sara Kate Gillingham-Ryan are putting their marriage on ice had the wonderful world of web gossip clamoring for details: Will one of the pair leave the business? Will they continue to work together despite their fizzling relationship? What the heck will become of their wildly popular interior design site?
For the bloglebrity world, it's déjà vu all over again. In January, Dooce founder Heather Armstrong and hubby Jon announced that they were separating and that Jon would be leaving the couple's online media empire.
Husband-and-wife teams own and operate nearly 4 million American companies, according to the U.S. Census 2007 Survey of Business Owners. Unfortunately, it's not unusual for spouses to launch a business together only to later realize they no longer want to be married. And what a waning marriage might mean for the business it birthed is anybody's guess.
Happily Co-Owners After?
"If they're willing to stay friends and business partners, it's a huge achievement," said Lara Feltin, CEO of Biznik, an online networking community for independent business people, which she co-founded in 2005 with husband Dan McComb. "I empathize with how hard the decision is and know there's no simple solution."
Experts add that if there's no business agreement in place when a co-owning couple calls their marriage quits, things can turn nasty fast.
"I've watched people lose multimillion dollar businesses over this—all because they don't have a contract," said Scott Gerber, serial entrepreneur and founder of the Young Entrepreneur Council, an organization that supports young business owners. "And then it just comes down to who's going to outspend the other in legal fees."
Small businesses have enough cards stacked against them as it is. Factor in the nation's whopper of a divorce rate, and well, you do the math.
Not long ago, Feltin and McComb, who started Biznik as newlyweds, nearly joined the ranks of small businesses rocked by domestic dissent. In 2009, both their marriage and their business partnership were on the rocks.
"We'd started to develop different opinions about how the business should go and what the brand of the business was," Feltin said. "The fighting was getting unbearable."
But it wasn't just a difference of professional opinion. The couple's personal life was on the skids, too. "We were spending 23-and-a-half hours a day together," relieved only by quick trips to the gym or runs through the neighborhood, Feltin explained. And, she added, "we were always talking about the business."
"We both knew it was an intolerable situation," McComb said. "Either one of us had to go at work, or one of us had to go at home."
The breaking point came when the couple started arguing with each other at work, loudly, in front of their employees. After "one particularly ugly altercation," McComb stormed out of the office and made a life-altering decision: "I decided that I wanted to be married to her more than I wanted to be running a company with her."
McComb didn't return to work the next day. Instead, he immediately stepped down from the business.
In Contracts We Trust
In retrospect, Feltin admits it would have been wise for her and McComb to have discussed the direction each envisioned for their business from the get-go. Ditto for their definition of success and the role each would play in getting the company there.