Who will run your business if you get hurt or sick?

Small business owners are often so busy working in their business; they don’t have time to work on their business.  This phrase is repeated often by experts and is a legitimate issue.  We recommend every owner set aside a day or two each year to work on the business and a great way to start is putting together a risk management policy.
What is risk management for a small business?  Identifying all the potential risks to the business and establishing policies and procedures to mitigate or eliminate the risks.  One of the major risks for the smallest of businesses is the loss of the owner.

What happens if you get really sick or injured?  Who will run the business while you recover?  Once you identify who can help with this risk, put together a manual to help the person do it.  Write down all your valuable contacts: names, addresses, phone numbers.  Write down all your due dates and deadlines for projects, contracts, jobs, etc.  Write down all your passwords and logins.  Ideally, the manual should have schedules showing what to do daily, weekly and monthly.  Assume you are going to be completely incapacitated and the person taking over will be on their own.  Talk to your insurance agent about a disability insurance policy.  Most people have life insurance which will provide for their family if they die, but many do not think about what happens if they are unable to work due to illness or injury.  Some comprehensive business insurance policies provide this type of coverage which can pay to staff to fill in while the owner is recovering. 

Another area of risk management is for small businesses with multiple owners.  The partners need to determine what they will do if one of them is disabled.  How long can they remain part of the business if they are unable to work?  How will the business determine if they are disabled?  How will the business buy them out if they are unable to work any longer?  This also applies to the death of a partner.  We recommend working with a good business attorney to really work through all these types of issues in an operating agreement.

This is a good time to look at your calendar and set aside a specific time to deal with this issue.  Write it on your calendar and take the time off to get this crossed off your to-do list!