How Will The Business Run If You Can't Work Temporarily Or Over The Long Term?
Step 1. Pull the business operation apart and examine it.
- How will each area function if you're not available? Perhaps the answers are different in case you're away from work for a few days instead of a longer period of time. It's easy to think that things can wait until your return -- but there may be some things that can't.
Step 2. Look at what needs to be discussed, with whom, and when.
- If you haven't been treating your second in command like a partner who's ready to take over if the need arises, this is a good time to start the process.
- Give other staff members the information or training they need. Think of the time you'll need to spend as "just in case" insurance which is as important as any other insurance you have.
- If you are concerned a person will take confidential information and leave, consider a contractual arrangement with a non-compete clause in it. Speak with your attorney.
Step 3. Consider necessary documentation.
Is someone else able to sign checks? To take loans from the bank? To take over negotiations on a pending deal?
Step 4. Write a List of Instructions.
- Start writing a List of Instructions that tells how to run the business in case you're not there. Consider writing two lists: one for a short absence such as a hospitalization or if you travel, and the other to be useful in the event of your death.
- The goal of this list is to provide whoever runs the business in your absence with all the information they need -- particularly the kind of information you may only keep in your head.
- Your thoughts about each of your suppliers and information that's not readily apparent about your customers. Include a history of each relationship.
- Contact information for each of the professionals you use -- including what you do or do not use them for if you have more than one.
- If your filing system isn't readily apparent, the key to unlock how things are filed.
- Locations and names of all your bank accounts, stock and bond holdings.
- If your business is a sole proprietorship, distinguish between the business and personal accounts. It may not be readily apparent. Include your reasoning about what's where.
- List all your passwords on your computer and voice mail as well as security codes. Location of all keys.
- If there are lawsuits, describe each case, the attorneys handling the case and contact information. Also include your thoughts about each case to help guide settlement discussions.
- An updated list of assets and liabilities and where each is located. If there is a philosophy behind what money is where, include it.
- Where you hide cash or other valuables, if you do. If you don't, hide some cash off premises as part of your "Just In Case" Business Plan. (See How Should A Business Owner With A Serious Health Condition Plan For The Continuation Of The Business In Case Of A Disaster?).
- Thorny issues that could need to be taken care of if you become incapacitated for a period of time or die.
Note in your calendar to revisit your List every six months.
Step 5. Consider Writing a Business Ethical Will.
A Business Ethical Will includes:
- The history of the business.
- Anecdotes you wish to pass on.
- Business lessons you've learned.
- The principles under which the business has been run.
- Goals you have for the business.
- Valuable tips.
A Business Ethical Will is not a legally binding document and does not need any particular form or method of execution.
Keep the will in a safe place. Let the person who will handle your estate know where it is. Better yet, if you are passing the business on to family members, discuss the contents of your Ethical Will with them.
Also consider writing a personal Ethical Will to help guide your heirs and keep your memory and your life lessons alive.
To learn about ethical wills, click here.