Do You Avoid Asking Yourself These 2 Crucial Business Questions?
October 23, 2007
There are two crucial business questions many business owners choose to avoid asking themselves:
1) What if I die?
2) What if I become too ill to work?
Ok, so you may be thinking you’re too young to think about things like that. I felt the same. And I should have known better, as I went from being fit and healthy overnight in my early twenties to becoming too ill to work.
And whilst there’s no point worrying that you might die, become seriously ill, or have an accident, it’s smart to consider the consequences on your business if you do, and plan what should happen in a worst case scenario.
Dying Without A Will: If you have a business, you need to make a will, which states what will happen to your business if you die. If you don’t, it could leave your spouse in financial difficulties, and your business in deep trouble.
Do take advice on making a will from a specialist adviser. You can get home DIY kits but they’re a huge risk if you don’t know what you’re doing.
Becoming Too Ill To Work: Could you afford to replace yourself in your business if you suffered an accident or illness? What would you live on? It is worth checking out accident or illness plans that would pay out in this scenario.
Also, you need some type of back up plan for if you’re ill for a couple of months. Could your business survive without you? Could anyone do your job in your absence? Can you systemise some aspects of your job, so that others can cover for you.
It may sound morbid, but a bit of advance death and illness planning could save a lot of problems further down the road.
Comments
10 Responses to “Do You Avoid Asking Yourself These 2 Crucial Business Questions?”
-
Successful And Outstanding Blogger
I agree. Even if we do not own a business, we should make sure that things are clean when we die or get ill.
It seems this is a very touchy topic, many people avoid. Particularly, when you are involved in a family business, it seems to get very touchy. It often happens that the parent is getting old but still running the business, and kids want to ask the parent, but can not bring it up, because it sounds like kids are hoping the worst to happen.
Good point. Something I must admit I shy away from – and nearly didn’t comment on because of it!
One day I’ll ditch the ostrich mentality.
Hi Catherine,
This is a great subject to raise….that dreaded word – death.
Not only in business, but in life…no one wants to talk about it, but it will happen to all of us, and our loved ones The young think they will live forever, the middle aged, put it off until later, and the old, often avoid the subject.
In business, it is very important to discuss the issues of death and/or a serious illness. Businesses need some type of contingency plan, in which these issues are addressed. Too often, a business owner dies or becomes seriously ill, and the heirs, are left with a big mess. If a plan isn’t in place, employees may “walk”, and any hope of salvaging a business, becomes all that much more difficult.
I’ve seen it where someone dies, greed emerges, and everyone has their hand out. A will so very important. Without one, here in the US, the estate can go to probate, and everything can be tied up for a long time. If no heirs can be identified, the state will be the beneficiary to the estate.
Too often, disaster strikes, and we are left totally unprepared.
Death and serious illness, are serious subjects that need to be addressed ,no matter what your age or health condition.
I’ll be neglecting those two important questions for awhile
. I guess that’s the nature of a start up, but I guess it is important to document everything so it will be easier for your business partner.
I wonder where the saying you could be run over by a bus comes from. Is it really that common?
Hi Asako – this is so true, some people don’t like to talk about these subjects and I suppose that could be one reason why they don’t tie things up properly.
Hi Ian, I know you are at a point where you’ve started afresh with your business now. But, because you have directors who are not family, it’s especially important to sort something out sooner rather than letter.
Hi Barbara – that is so true – you could cause devastating problems for those you leave behind by not putting things in place. And the thought of the government getting every single thing you own is awful. They take enough already. I’m not sure how it works in the UK, but I think assets can go to very distant relatives. In the USA do you have to pay inheritence tax when you die? Here it is 40% of everything you leave above somewhere in the region of 300k.
Hi Carl – I think at your age, it is less of a worry, as you don’t have dependents. But, it is something you’ll want to think about in the future.
I don’t know how many people get run over by a bus, but I remember my dad’s mother telling me that her aunt lived until she was really old – 96 I think, then she got run down by a bus. I think it was really unlucky to live so long then go in that kind of way.
This was quite a morbid topic I know, but I put far too many of these things off for a long time, and I still have many things to tie up. And being ill this past month made me thing long and hard about doing those things.
Some great points that many don’t think about (neither have I to be honest). One should be prepared for everything. But I have that problem that I trust only to my friends which I had since i was 15 or to relatives (to some of them), and in this field, non of them are what I would call to be able to replace me.
Am I in big s… Cath?
Hi Astrit – Not sure if you’re really in big s… or not. The main thing is, it depends what you want to happen to your business after you die. And whether you want it to carry on running or not.
But there is also the problem with if you become ill. I have been lucky this month. I was not keen on having a business partner at all, but because I have, my business has been able to continue to run. There are probably certain things we’re behind on, but nothing that the customers would notice.
If I had your type of business I think I would train people to work for me completely from scratch, and hope that I would eventually find someone who could replace me. The trouble is with SEO, it’s only systemisable to a point because things change so often.
If you didn’t fancy doing that Astrit, I think the wisest thing would be to take out some kind of cover for if you become too ill to work.
Inheritance taxes in the US are different, depending on what the heir is getting, i.e. life insurance proceeds, house, business and it’s assets.
Generally, if a business isn’t involved, the figure is quite high (over 1 mil), before you are taxed. IRS keeps changing things, so it’s difficult to stay abreast with the updates. We also have to take into consideration, which state we live in, and if the state would impose their own tax.
All the more reason to protect your assets, and make wise decisions if you want to bequest a “certain something” to a loved one.
This has been a real-world scenario for me in years past, but I’ve put myself in positions where I’m employed by strong organizations that have great health/medical policies. Thank goodness I did…
[...] many problems you may face that I haven’t mentioned. Things like ill health, loss of business premises, partnership problems, or even the death of a partner could cause [...]