Choosing someone capable of running your business in an emergency should be part of your business plan.
We all like to think we are invincible masters of the universe. Unfortunately, since the reality is that our fate can hinge on something as trivial as a slip on the ice, have you considered all the urgent issues that would come up if you were suddenly incapacitated?
Every business should have a second in command. You, as an owner-manager, should ask yourself: “Who has the capacity to run the business if I am absent for a prolonged period?” If no one comes instantly to mind, you should think of either training or hiring someone with this ability, or speak with us to brainstorm with you. If you think there is someone who could do the job with a little training, start mentoring them and have them shadow your everyday activities. Your staff, as well as your clients/customers and suppliers, should be familiar with this person and know of the trust you place in them by ensuring their attendance at contract meetings, conferences or seminars. Your clients/customers need to feel as comfortable with that person as you do and they should see that this person has your confidence.
A review of these everyday operational issues will help determine how vulnerable your business might be in the event you are taken out of circulation for more than a couple of days.
Control of computer access by your second in command is necessary, not only to ensure business activity continues uninterrupted while you are away, but also to ensure that key employees do not mismanage assets in your absence. Your substitute must have the ability to review all data at any time. In the event an employee must be dismissed, your deputy must be able to change passwords in order to protect company data.
If you do not have a replacement knowledgeable about the details of contracts, the company’s financial position, loan agreements, etc., your business risks being temporarily crippled while company personnel try to get company data from suppliers, clients and financial institutions. Make sure all pertinent documentation is available and that your replacement knows what is required.
Contact between your designated replacement and key individuals such as accountants, lawyers, bankers and insurance agents is essential in the event there are emergencies that require their input. You should introduce your potential replacement to these key people and provide written permission to them by means of a letter for their files stating that you have authorized this person to act on your behalf in any corporate matter in the event you are unavailable.
When you have chosen your replacement, groom them for their management potential. Provide training in business management and have them work with you when you analyse cash flow needs, establish project costs, etc. so they can supplement theory with experience of how you actually work. It is important that your replacement feels comfortable in your shoes.
Ensure your replacement is not office sheltered. They should get into the field and become familiar with the faces, names, tasks and responsibilities of all employees. Familiarisation prevents any buildup of contempt that some employees may feel for someone taken from the ranks and groomed for the top job. The breadth of experience that comes with field work enables your replacement to understand how the company’s projects are progressing, know who is working where and with what responsibilities. Field experience also gives the new leader an opportunity to learn how costs are controlled in the company.
Contingency planning for the possibility that you suddenly may be unable to take an active role in running the business should be a part of normal long-term planning for anyone who runs their own business. Knowing that your business will continue until you are back on your feet is, in itself, just good business.
Any further questions? Please contact SMART Business Solutions on 0359 11 7000 or email@example.com
Want to grow your business & improve cashﬂow?
You need SMART solutions for YOUR business, not just annual tax compliance! Get the SMART team working with you. Call SMART Business Solutions today on 03 5911 7000
ONLINE Webinar Session
27 July // 1:00PM
There are a few changes earmarked for superannuation commencing 1 July 2021. These changes will impact both employers and employees. Read the details here to know what's expected.
If you have a home loan, there are many reasons you may consider refinancing. That could include wanting to borrow more, access different home loan features or simply to get a better interest rate. We explore the more common reasons for refinancing, including a few you may not have thought of.