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David FullerBrian Tracy, the famous sales trainer, has a story he tells about the importance of great questions.

Tracy was meeting with an insurance salesman who asked if he had enough life insurance. Since he didn’t want to deal with this man, Tracy assured him he did.

As he was finishing the meeting, the salesman asked: “How long will you be dead for? Because with the life insurance policy you have, you’re going to need to come back to life after six months to help pay the family bills.”

The reason I bring this up isn’t to sell life insurance, although especially in the early stages of entrepreneurship, life insurance might be a good bet. Most people in business don’t consider their untimely death. None of us want an early expiry date, and while we might hope to live to a ripe old age having accomplished all our objectives, life has a funny way of throwing a wrench into the best made plans.

While I’ve never been asked to help out a business after the untimely death of the owner, I know that day will be coming soon. Often, I have clients who want to work with me because they’re preparing for their exit from the business.

Some have the foresight to make plans when they hear they have an illness or are approaching retirement age.

Unfortunately for some business owners, they don’t have the right plans in place when they die. As a result, there’s no one to help their family or employees negotiate through the traumatic days following the loss of an owner or founder.

For solo entrepreneurs or small enterprises where the business revolves around the owner, there’s no option but to shut the business down. Usually a lawyer or accountant can help you quickly transition through the necessary paperwork.

However, when there are employees and customers, substantial assets, loans or payables, as well as work in progress – often factors in larger businesses – things are usually much more complicated and can take months or years to wrap up.

So what would happen if your staff woke up one morning and discovered you died?

Hopefully, they will miss you and shed some tears, which means you probably made a difference in their lives.

However, without a plan for emergencies like death or even the disability of an owner or founder, companies that were once going concerns stumble and begin the downward slide into oblivion.

The lack of a vision, direction and strategy that the owner brought is missing after a few weeks or months while the family is grieving. Often key employees who doubt the future without a leader jump ship. Without leadership, many businesses and their employees become paralyzed by indecision. The future of the business is often bleak.

While a life insurance policy might protect your family from some of the loss of income, does it protect them from the financial liability of your businesses?

To ensure that your business can survive you, there are a number of things you might do:

  • write down a plan for the worst-case scenarios and discuss them with key staff members;
  • talk to trusted advisers, including lawyers, accountants or mentors, about what your plans for the business are;
  • discuss or document some options for transitioning the ownership of your business should disaster hit, such as:
    • who should your management talk to?
    • will they need a business coach or fractional CEO to come in and help?
    • what should they expect in terms of leadership from your family?
    • how would you value the business if it needs to be sold?
    • what happens if they can’t sell the business?
    • how should they deal with family?

While the answers might be included in your will, having backup documentation in your operations manual or company safe might be a great start.

Not many people come back to life after being dead. If you want to rest in peace before and after you die, it makes sense to come up with some concrete plans that position your business for the benefit of your family and employees long after your untimely departure.

David Fuller, MBA, is a certified professional business coach and author who helps business leaders ensure that their companies are successful. David is author of the book Profit Yourself Healthy. Email [email protected]

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