What would happen to your business if you were in a car accident and were unconscious for days? Do you have a back up for yourself?
Most business owners are careful to cross-train employees so that in the event one goes on vacation, quits, or is sick for an extended period, someone else can step right in and the business still runs smoothly. If you have not done this yet, you should cross-train your employees immediately.
What if you have no employees, or you are the only person in your company who knows where everything is, knows how it should run and makes all the decisions? An unexpected catastrophe in your life can completely devastate your business. If you want your business to carry you through a catastrophe, you need to plan for it before it comes.
If you are in business with a partner, this is an easy fix. All owners of a business should know everything about the business so that he or she could run the business on his or her own in the event something unexpected should happen to you. If you are in charge of production and your partner is in charge of sales, do each other’s jobs every so often so you and your partner can step in immediately in an emergency.
If you are the sole owner but you have employees, you may want to train a key employee to learn more of the executive functions that you manage now. I know that most business owners do not want their employees to know too much about certain aspects of the business, but you can teach some parts of the business and keep copious notes so that your key employee could learn what he or she doesn’t know from your training. If you never find yourself in a crisis, then you have simply done some strategic planning and training that will ultimately make your business stronger.
Are you in business for yourself, with no partners and no employees? Then, you need to find a back-up for yourself. It could be your spouse, other family member or a friend. You need to let them know everything about your business so they can step in if you have an emergency. This will probably take place over the course of several weeks or months. Keep your back-up informed of any changes as they take place. If your back-up is your spouse, find a second back-up just in case the two of you are in the same accident and both of you are in the hospital. It can happen. You should also have signed a durable power of attorney appointing an agent to act for you when you are incapacitated or unconscious.
Finally, if there is any question in your mind that you will not be able to have an income if an emergency arises and you cannot work, you need to buy disability insurance. This is especially true if your income is derived a service you provide. If no one can do your job for you while you are incapacitated, you need a mechanism to replace your income. That is what insurance is for.
Contact Robin Gronsky at Rgronsky@Gronskylaw.com or 201-251-8001 to find out how she can help you stop making expensive legal mistakes.
Checklist to Cover Your Business in Case of Personal Catastrophe
- Determine who else could operate the business in your absence. Are you the sole owner or do you have a partner? If you are a sole owner, can you have your spouse take over? Still, if you do designate your spouse, have a back-up in case you are both involved in an accident together.
- Cross-train employees to fulfill operations in your absence.
- Sign a power of attorney appointing an agent to act for you in the case you are incapacitated or unconscious.
Consider purchasing disability insurance, especially if your business is service based