This is definitely not a front-of-mind topic for entrepreneurs. We never discuss it. But I’ll guarantee you it is a back-of-mind issue for small business owners, and an AllBusiness.com article called Can You Put Your Business on Hold Due to Health Reasons forced me to consider it.
If you are the one who develops new business for your company, your income may slump when you take time off for any reason. And if you’re a solo entrepreneur, business will come to a complete halt if you are unable to maintain operations at some level.
Some key points from the article are:
* Study your insurance policy – Understand your disability insurance coverage.
* Determine your customers’ patience threshold – People can’t wait indefinitely for you to complete agreed-upon transactions. And if they go to someone else, you may never see their repeat business again.
* What about your employees? – If you need to close down operations, most employees will no longer be available when you can re-open.
You should also consider how to make your business less dependent upon your day-to-day presence. Think about how you could shift to a recurring revenue business model. Or consider a partnership business where you earn income based on the revenue of the entire operation. If you do this, make sure your partnership agreement defines how long, and under what circumstances, you can continue to draw income from the business.
The key, of course, is to set up contingencies — someone who can cover for you or other business to which you can refer your customers. Think of it now, plan how you’ll deal with it, and you’ll be prepared if it should happen to you. And then you can put it in the back of your mind again!