Starting your own business is a really exciting thing to do. You get to take a dream that you have been harbouring for years and turn it into reality.
That means lots of planning and thinking about your business and how you want it to pan out. You can decide where you want to be years down the line and aim for it.
Most people have a plan that they are following, whether that’s a formal written business plan, something scribbled on the back of an envelope, or just a rough guide in their head. The majority of these plans focus on improving the product, getting more sales or growing the business.
However it’s also vital that you plan what you will do if something happens to you. As the founder of your business and the person who is the driving force, you are probably the key factor behind its success. And if you are a sole trader, there may not be a business without you.
This is not scaremongering. It’s about taking an hour out of your day to think about what could happen; what you would do, and then take some action to prepare:
What could happen?
This is the scariest part of this process, as it’s a reminder how fragile we humans actually are! You need to consider the effects of illness or accidents in the short, medium and long-term. Most people who work for themselves will battle through minor illnesses, but what if you had flu that put you in bed for a week?
Accidents are potentially the most disruptive events that can happen to you. Dislocating your shoulder is painful but normally easily fixed in casualty. What you may not realise is that you could end up in a sling for a number of weeks to give it a chance to heal. That means you can’t drive, type with two hands, or maybe even write. How will you get to work or answer your emails?
Worse than a minor injury is a big accident or long-term serious illness. The reality is that these are some of the biggest risks to you in today’s world. And the effects can quickly destroy the business you have spent years building up.
On a piece of paper write down the likely problems your business could face if you were removed from it for a few days, weeks or months.
What would you do?
Now you know what could happen, plan what you will do in event of an emergency. And remember to make it as easy as possible to execute.
If you’re off for just a few days, can you effectively put your business on pause by emailing your client base to tell them what’s happened and when you expect to be back?
With a longer-term absence, can an employee step up into a bigger role? As long as you accept they will never fully fill your boots, they may keep your business ticking over for a few weeks. Alternatively, can you outsource basic functions? Call handlers will answer the phones in your company name and can deal with basic enquiries. Bookkeepers will keep on top of invoices. Telesales companies can generate or close leads.
As for doing whatever you do, is there a freelancer you can rely on, or can temps be hired to pick up the slack? You may be able to put in place an agreement with another non-competing business where you cover each other in an emergency.
Looking at the worse-case scenario – a long illness or your early death – what do you want to happen to your business? If you were given six months to live, you would probably want to spend the time with your family, not working. Is there someone who could buy your business or clients off you quickly, even if just for a nominal sum?
If you die or are incapacitated, who will make the difficult decisions and execute them? If you expect a spouse to take over or want the business to be sold to a business partner, play safe and write the instructions into your will. What happens if you and your spouse are killed at the same time?
Remember that if the worst happens, it is delay in getting it sorted that will destroy the business, potentially leaving your next-of-kin with a big mess to sort. A bit of planning from you will make a hard time a little easier for them.
Things to consider
No-one can do what you do in your business. Even if they have the ability, they won’t have the passion or drive. So be prepared for an interruption to you to mean a loss of revenue or profits. If your business is just “getting by”, taking you out of it for a month could wipe out any potential profit.
The demands will change as the business develops. When you take on staff you will need management help. Having premises needs a different kind of attention.
You won’t be able to cover everything you do in your business. So ensure that if something happens to you there is someone else who can make the hard decisions, with the guidance you set out now. Leave instructions in an obvious safe place.
Don’t put this to one side. It’s an important piece of planning and needs to be done. Find a few hours in your diary in the next few weeks and go off-site to focus on what you want. The hardest thing is the thinking – capturing your plan and wishes on paper is easy once you know what you want.