Planning for the Unexpected: Continuity

Why this matters

If you got hurt on a Tuesday and could not work for three months, would your business survive? For most owner-operated shops the honest answer is no, or barely. The crew would not know how to make payroll, the bank would freeze when it could not reach a signer, and the customers would drift to whoever answered the phone. Continuity planning is not about your death. It is about the ordinary disruptions, an injury, a sick family member, a hospital stay, that happen to working people all the time. Spending a few quiet hours now turns a catastrophe into an inconvenience.

The single-point-of-failure test

Walk through your week and list everything that only you can do. Be brutally honest. Common single points of failure:

• Only you have the passwords to the bank, the merchant account, and the email.
• Only you can sign checks or approve payroll.
• Only you know which jobs are scheduled and what was promised.
• Only you know the gate codes, the supplier account numbers, the insurance agent.
• Only you can pull a permit under your license.

Each item on that list is a place where your absence stops the company cold. The goal of continuity work is to shrink that list to as close to zero as the law allows.

Build the "break glass" binder

Create one document, physical and digital, that a trusted person could open and run the business from. Keep it current and tell two people where it is. It should contain:

• Access. Where passwords live (a password manager and how to reach it, not the passwords scrawled on paper). Bank and card logins, accounting software, scheduling system, email.
• Money. Which account pays what, when payroll runs, how to run it, who the bookkeeper and accountant are and how to reach them.
• People. Employee list with pay rates and contacts. Who can be trusted to dispatch, who handles the office.
• Customers and work. How to see the schedule, how to reach the biggest customers, what was promised and by when.
• Vendors and partners. Supplier accounts, the insurance agent, the lawyer, the landlord.
• Authority. Who you have named to make decisions if you cannot. This is not legal authority by itself (see below), it is your stated wish.

The legal layer

A binder tells people what to do. Legal documents give them the power to do it. These are general categories, and you should confirm the right setup for your situation with an attorney and your accountant.

• Durable power of attorney. Lets a named person act on your behalf, sign documents, and handle money, if you are incapacitated. Without one, even a spouse may have to go to court to access the business.
• Operating agreement or bylaws with succession language, so the company has a clear chain of authority on paper.
• Signing authority at the bank for at least one other trusted person, set up in advance. Banks move slowly in a crisis.
• Buy-sell agreement if you have partners, so the death or exit of one owner does not blow up the company.

Do not try to write these yourself off a template. The cost of getting them right once is small against the cost of a court sorting it out later.

Insurance that covers the gap

Insurance is the part that funds the plan. Talk to an independent agent about what fits, and treat the following as conversation starters rather than recommendations:

• Disability income insurance replaces part of your own paycheck if you cannot work. Owners skip this constantly and regret it.
• Key person coverage pays the business if you or another critical person is lost, giving the company runway to reorganize.
• Business overhead expense coverage keeps the lights on, rent and payroll, while you recover.

The right amounts and types depend on your finances. The point here is to ask the question, not to guess the answer.

Cross-train before you need it

The cheapest continuity insurance is a second person who knows how to do the office-critical tasks. Pick one trusted employee or your spouse and teach them to run payroll, read the schedule, and answer the bank. Have them actually do it once a quarter while you watch, so the knowledge is real and not theoretical. A crew that has dispatched themselves for one ordinary week, with you out of town on purpose, is a crew that can carry you through a bad month.

Review it once a year

A continuity plan rots. Passwords change, employees leave, the bank gets bought. Put one calendar reminder a year, pick a slow day, and walk the binder top to bottom. Update what changed, confirm your named people are still the right people, and tell those people again where everything lives. An hour a year keeps the whole thing alive.

References

• SBA, "Prepare for Emergencies" and business continuity planning guidance.
• IRS, Publication 583, for recordkeeping that supports continuity.
• Trade-standard practice for owner contingency and key-person planning.
• Consult a licensed attorney and an independent insurance agent for documents and coverage specific to your situation.
• See related: Business Succession Planning, The Exit as a Life Event.