This content was published prior to the combination of Dentons Sirote. Learn more about Dentons Sirote. 

These days most things seem to fall into one of two camps – those things we can control and those things we can’t control. One of those things we can control is to make sure we have a proper and current contingency plan in place for our business in the event of our disability, whether that be due to COVID-19, accident, or other illness.

As business owners, a lot of times we plan for every business contingency under the sun, especially now when things seem so different than what we are used to, but fail to address what happens if we are unable to run our businesses. If you were unable to lead your business for 30 days or more with either no plan or an outdated plan in place, what kind of business would you return to?

Thankfully, there is a simple fix. First, simply type or write out a memo to your family, co-owner(s), or key employee(s) that transfers the knowledge in your head to paper about who needs to lead and manage the business in this situation, the things they need to do or the things they need to avoid doing during your absence, which employees and others that you trust should be called upon during this time, what kind of compensation plan should be put into place to incentivize the major players, what key advisors should be consulted, etc.

Second, make sure that the people you want in positions of leadership have the legal ability to act on behalf of your business. This could mean appointing special Business Agents under your Durable Power of Attorney to act on your behalf with respect to the business in the event of your disability. If you have a Revocable Management Trust, you can appoint special Business Trustees to make sure your goals and objectives during this time are achieved. If your business is a corporation, maybe these key players need to be appointed officers and directors now so that everything is already in place if something suddenly happens. If your business is a Limited Liability Company or Partnership, perhaps the current agreement for your business needs to be modified to appoint the key players as successor managers or successor managing partners in the event of your disability.

Your unexpected absence from your business could leave a void, which in turn could cause power struggles, turnover, lost customers, and lost profits. Establishing a plan of continuity will make your family, employees, customers, suppliers, and lender all very happy.