Planning for the Unexpected…

It is very easy in business, as in life, to get absorbed in the day-to-day running and to forget to take that step back once in a while, and consider, heaven forbid, how you, or your business would cope if the unexpected happened.

This has come to the forefront of my mind recently due to two key events; firstly the pictures of ongoing flooding in certain parts of the country which have meant that for weeks and weeks on end, communities (and the businesses within them) have been unable to function as normal.  The second key event is the really sad diagnosis of terminal cancer that one of my dearest clients has received, and the immediate questions that this raises as to the future, both personally and for the business he runs.

We have all, hopefully, got certain contingency plans in place for our businesses if the unexpected does happen; things like data backups in case of a system crash, insurances in place in case of fire, theft or other damage, and so on.  But what about if one of the owners of a business becomes unwell, so that he is not able to put in the countless hours of effort and direction to the business that it is accustomed to.

For small businesses that depend upon the leadership and efforts of a handful of personnel, the loss of a key member is felt most harshly.  It is possible to insure against some of the financial impact (key man insurances etc), but this just compensates for some of the income loss; it does not look any further to the future in terms of how the business is to be run without that key owner / director.

Some of the key questions to consider in this eventuality are:

  • Do we have the resources for someone else to step in and take charge?
  • Is this person adequately trained, and do they have the authority to make the necessary business decisions?
  • What about our customers?  How can we ensure that they experience no disruption to service so they don’t just go elsewhere?
  • Practical points.  Who can access the business’ bank accounts, business records etc?  Who knows how everything works?  Are systems and processes adequately documented?
  • If a director / shareholder suddenly dies, to whom does his share of the business pass?  Is this what the other directors / shareholders would want / intend?
  • Succession planning.  Are there family members who would wish to carry on the trade?  If not, is a business sale the best option?  Is a potential buyer lined up?  After all, the likelihood is that you’ve built up lots of goodwill and this has a value which it would be sad to just lose

We have in place a continuity agreement with another firm of accountants which forms part of our contingency planning to protect you, our clients.  But how many of you have considered the future of your business without you?  It’s a tough area to think about, but one that is surely worth a bit of your time and some expert advice.

If this is an area that concerns you at all, then please drop us a line.  There are a range of professionals that we can put you in touch with to explore these issues with you so that you can rest assured that you have planned for the unexpected.