Business Resolutions For 2017

There are many worthy business resolutions for the new year.  Most will depend on your business. Some that look good are actually unrealistic and should be avoided. Stay within your limits.

Of the ones that you should have implemented in prior years, the most common is building middle management.  If your organization chart looks like a garden rake with you as the handle, you are doing things others can do and that takes time from the things that only you can do.  Spend your time on the areas where you are the best. 

Without the handle a garden rake is near useless and so is your business.  Which leads us to the second area of concern.  Do you have an emergency protocol?

On Christmas Eve,there was a tragic example in cottage country near here. A Toronto lawyer, his wife, two children and their dogs were killed when a fire leveled their property on Stony lake.  He was a partner in a large law firm and his work will be absorbed by others in the firm, but that ability to absorb is uncommon in many businesses.

A business is a busy place.  There are many projects partly finished and many processes that only the owner can implement. Things like signing checks, making the work schedules and convincing creditors that all is well and they will get their money.  Keep a simple thought in your mind.

No one ever dies or becomes disabled just at the moment that everything is done.

Every business needs an emergency preparedness protocol. Here are a few things to consider.

In case of death:

  1. What will happen the first week. Customer, employee, supplier and banking relations. All will be concerned about ongoing relationships.
  2. Succession agreement.  It could be with employees, family or a competitor.
  3. How will it be funded? Life insurance is one possibility and the easiest to arrange.
  4. What will family live on?

In case of sickness or injury:

Pretty much the same as death but without the certainty of the future.  Who will make decisions?  Who will carry out routine transactions?  Who will reassure the stakeholders? Where will the money come from?

Some disabilities are enduring while others are just inconvenient.  Bypass surgery might lay you up for 60 -90 days and require some lifestyle amendment after that. You can probably make some decisions and execute some paper while laid up.   Inconvenient, but that’s about it.  Permanent disabilities tend to be easier because the business will be sold to someone.  The other ones are the problem. Maybe a stroke that is gradually improving. How long to wait.  A year? Two?

Insurance can buy some time. Consider disability income insurance and critical illness insurance.  You might never collect and if so, count yourself lucky.

You can and should build depth. Have people who can carry out some of your duties. Be sure people know what you are doing. Have a list of contacts, what they are for and how to reach them. Let someone know your priorities on a monthly or less basis. Be sure the people know what each is responsible for.

Businesses need administration talent to operate and value falls significantly if it is missing. You will not get top dollar when you sell without middle management so start early and have it support the emergency plan.

Talk to your accountant and lawyer about the issue. They can add value to the discussion. Have them keep a file of what should happen.

It is quite simple.  If you are not expendable, the business and its value is at risk.  Fix that.

Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario.  In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.

Please be in touch if I can help you.  don@moneyfyi.com 866-285-7772

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