May 9, 2018 By Suzanne Robertson

No one thinks about the worst-case scenarios when they first form a business. You may have business milestones in your sights: high profits, pride in your work, and a respected place in your community.

However, your business is always at risk of falling victim to the three D’s: debt, divorce, and death. It’s important to plan for each of these when you’re just starting out. Debt can sink your business, spouses can split leaving a schism where a business once was, and an unexpected death can shake you as an unprepared business owner.

Each of the three D’s can be avoided with some simple precautions. A prepared business owner can get past these obstacles and go on to survive the next challenge.

Managing Debt

It’s understandable that some business owners have to take on debt to get their businesses up and running. Substantial business or personal debt that is not managed with care, though, can sink a promising small business.

A large amount of debt could prevent you from performing normal business functions, like paying your employees. Without the ability to run your business, you won’t be able to keep your head above water at all.

You might assume that your personal debt won’t affect your business, but it could lead to the need to close your business if you do not put protections into place.

The best policy for any small business is to maintain a healthy amount of debt to prevent any complications. You can analyze your business financial health with this SmartBiz Loans tool.

Although none of us like to think about it, bankruptcy may be the best option when debt gets out of control. Filing for bankruptcy will put an automatic stay on your debts, meaning creditors won’t be able to collect from you.

If you are filing for personal bankruptcy, you will have to list your business as an asset. This doesn’t necessarily mean that you must close your business during proceedings. Some may choose to liquidate their business, but others can file Chapter 11 or Chapter 13 bankruptcy, which will give them the ability to catch up on their debts.

Some factors in bankruptcy will vary, so it may be best to contact a lawyer if you have questions.

Divorce-Proofing Your Business

Another unthinkable thing that can always become thinkable for any small business owner is divorce. The division of personal assets when you’re going through a divorce is a difficult thing to go through, but what will become of the small business that you’ve built together?

Your future ex-spouse may be able to take 50 percent of your business as well as a chunk of your profits. Planning ahead in case of a split may be the only way to prevent a messy financial situation.

Planning for divorce may be an awkward thing to go through when you’re setting up a business, so it’s important to set up a prenuptial agreement before your relationship is in trouble. A postnuptial agreement is also a good option if you want to define your business as a separate from your joint assets.

Leaving Behind a Legacy

It’s important to remember that your business can still survive the last unthinkable. You need to have a plan in place in the event of your death.

The easiest and best way to protect your business in this scenario is estate planning. A good estate plan will ease the stress on your family members and protect them from taxes.

Although the experience may be surreal, you should talk about your estate over with loved ones, then prepare a will with a legal service. My recommendation is LegalZoom, read my review and save 10% with the referral code BEST4B. While planning, think about who you’d like to run your business and how the process should play out.

You may not want to think about all of the not-so-fun scenarios when running a business, but it’s imperative that you confront these tough topics head on so that you can ensure that you, your family, and your employees are well cared for in the future.

About the Author

Marsha Kelly is a serial entrepreneur who has done time in corporate America, selling her first business for more than a million dollars. She has learned what products and services work in business today, and she shares her experiences on her best4Business blog at You can learn from her experiences from shopping the Internet for tools, supplies, and information to build your business and improve your finances.