"Perhaps the best investment a business could at this time is to have a 45 minute conversation about what would happen if one of the owners were unable to work."
Ben Mason, CEO of Kinherit
Business owners and their team often put years of hard work into creating a viable firm.
They may prepare for many eventualities - but the coronavirus crisis is undoubtedly unprecedented.
The government has advised us to work from home where possible and practice social distancing. But this is not to say that in many cases companies cannot stay open for business.
It is important not to act rashly and to check what support is available, from reliable sources. For example, the government is providing a range of support for businesses, including a job retention scheme.
There is extra relief for industries which are harder hit - such as a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses.
The data is still coming in, but according to recent reports aroiund 20 per cent will develop severe symptoms or become critically ill. Sadly, an estimated one to two per cent are dying from the disease. We need to prepare for the possibility of key members becoming incapacitated or unavailable.
It’s time to talk
Perhaps the best investment a business could at this time is to have a 45 minute conversation about what would happen if one of the owners were unable to work. Where possible, it makes sense to bring in an objective professional, who could talk you through your options.
Failing to prepare
Having worked with clients at a later stage, I know that failing to prepare can lead to financial and emotional fallout.I have had companies reach out when an owner has become sick or died - without any protection in place.
There are instances when the person who is no longer around could own at least half of the company. This can throw both members of the business and their family into turmoil – adding financial stresses into the mix at an already difficult time.
Sometimes it is possible to put processes in place for remaining shareholders. However, the best protection is advance planning.
Putting paperwork in place
Putting a Will, shareholder agreements and business insurance in place in advance help to keep a business running more smoothly should the worst happen.
A Business Trust can also help protect against hefty bills and events such as a surviving spouse remarrying.
Businesses can also put a Power of Attorney in place to make business decisions alone. It’s important to prepare for the possibility of having an owner unable to make decisions for a time.
Ben Mason, is the CEO of end-of-life planning firm kinherit, which provides secure Will-writing and complex trusts. He also heads Futures Protected, which offers insurance to protect a business against financial losses in the event of the death or critical illness of an owner.
For more information, visit https://www.kinherit.co.uk/