Do you have a contingency plan in place for your business? It’s a subject that can seem quite boring and one many business owners avoid. But it’s an important and essential thing to think about. Because you can’t always forecast when you’re going to need to take time out from your business - but you can have a plan in place that helps cover most scenarios.
So as a bit of background, I’ve been going through treatment for breast cancer recently. And when faced with my diagnosis, I also had to decide what to do about my business. Obviously, it’s not the most important thing to be thinking about when you're diagnosed with something like cancer, but it was important that I try and keep working during this time. Because I'm at home all the time, there's no risk associated with me working, but if I was in an office or something like that, there might have been.
But when you’re faced with something like this, you start looking at your options and thinking about contingency planning for time out of your business. So when I was looking at it, I wondered what to do. Do I close my business? Do I just take a step back? What do I need to do to still have a business when I'm able to get back to it? The process of managing breast cancer is probably 9-12 months, at the very least. I’ve undergone several rounds of chemotherapy over the course of about five months, and I've been able to work for two out of the three weeks of each chemotherapy cycle. But of course, there are a lot of unknowns about these things when they happen.
Although you may not have faced a diagnosis such as I have, what you might have faced is anything unexpected. Because unexpected things can happen, and you need to have a plan in place for when they do.
There are so many different things that can lead to you needing to take time out for your business. If you have children, the past year has shown us that there’s the possibility of you needing to homeschool them. There’s bereavement too. A family member may suddenly need looking after, or something happens to them that means you need to take time out of your business. And then there’s you - you may get run over by a bus tomorrow or break an arm, suffer an injury or bereavement yourself.
So have a think about what could happen and how you’d manage your business if you were faced with a crisis. Do you have a plan for what you might do?
I'll be honest; I didn't have a plan, and I never really thought about what would happen if I wasn't available. We don't like to think about these things.
It’s not always about emergencies. Think about how you can take yourself out of the equation but still maintain your business. What if you wanted to work less or couldn’t work at all? They’re all things that need considering.
When something happens, you don't know what things look like or how you’ll manage. If you have a company, are you the only Director? Is that practical? Could you have a partner who is also a Director? You then need to think about paying dividends and things like that.
But you’re making sure you have somebody that could take over the business from you if something happens. And no matter what type of business you have, could somebody do that for you? Could somebody take over your clients quite quickly if you needed them to? Could somebody reply to your emails on your behalf? Do you have a virtual assistant or somebody you work closely with who could just take over for you? It’s always a good idea to have somebody who could cover for you, even if it’s covering your holidays. Could you work with somebody who doesn't have children who would be happy to take over some of your work in the holidays or at least be available if needed?
For me, that meant not taking on new clients and being very, very careful about what I said yes to. I’ve decided in the long term that it’s not too problematic for my business, and most of my clients have been very understanding about that.
So think very carefully about how you might manage if something happened and you needed to take a step back or away from your business. Take the time to make a contingency plan that works to cover situations, events and circumstances that could potentially affect you and your business - not just those worse case scenarios but also the more enjoyable things you see in your future.
Maybe you’re interested in travelling or want to take a sabbatical at a later stage of your business? Having a baby may be something you see in your future - and is something you can consider as you create your contingency plan.
Look to get at least three months' worth of costs in your business in case you’re in a situation where your income dries up. If for any reason you didn't work for three months, your business could then survive, and there would be money in it.
Sometimes it can be difficult to do this because it's easy to get into a hand-to-mouth mentality with your finances. So if you're a sole trader, put that money aside into a separate bank account. And if you don't have the means to do that right now, just start building it gradually. Over the next few months, start putting a little more aside each month. And check that you’re pricing your products and services based on your required minimum price. You can get some help with this by accessing my free pricing calculator here.
Also, take a look at your systems and processes. How much of your business can run without you? Do you have passive income streams set up to still earn an income from your business? Have you set up the right systems to do that automatically for you?
For me, my courses and things like that run automatically, and my virtual assistant can manage that side of things for me. I would have to carry out my client work, but I also have a contracted agreement with somebody that they would take over my clients for me if I were incapacitated.
So how about you? Would you pause your business? Would somebody take it over? Could you build a network of people who could help support you, create a reciprocal arrangement, or at least take it on and pass out the work?
Deciding on a contingency plan and planning for time out of your business is an essential plan all businesses need to have in place. None of us wants to think about these things, but they do need thinking about and planning accordingly.
So take your time, ask yourself those tough questions, and start planning for time out of your business - for the more enjoyable scenarios in your future and those unexpected events. And remember, if you need some help getting clear on pricing for your products and services, check out my free pricing calculator - you’ll find it here.