Business Planning for the Unexpected

Prepare yourself and your business for life’s twists and turns

No business likes the word “disruption.” Generally speaking, when we hear that word we immediately think about disruption in the form of materials, technology, delivery, service, scheduling, pricing, regulations, etc. 

Business disruptions can happen at any time. These unplanned events can take many different forms – natural disasters, loss of key personnel, data breaches, economic turns, tax reform, tariffs and labor strikes.

But what if you were the disruption? Think about this: If you had to go on leave for a month or longer starting tomorrow, what in your business would suffer? Which part(s) of your business operations would slow down or even cease?

Consider taking these precautions to protect yourself and your business in the event of your unplanned absence:

1. Determine your “number two.” Who is in charge of business operations? Is there a second-in-command who knows what needs to be done each day if you are gone? It’s a good idea to make sure you have a backup who knows your day-to-day business procedures, as well as your plan for long-term operations. You’ll need someone who understands the decision-making process at your dealership, complete with timelines and scheduling, for the parts of your business that you solely handle. This involves something as simple as communicating your process and plan, or writing down a few things that others can rely on.

2. Determine a backup for contract deadlines. Are there others in your business who are familiar with the deadlines you have to keep your business running? Without your history of making decisions in regard to things like tax reporting, OEM inventory ordering, pool fund usage, insurance, and bank covenant reporting, someone might need to “wing it” on your behalf for a multimillion-dollar decision. It is imperative that you make sure you have others in place who can handle those issues if you cannot. 

3. Share your strategic plan and milestone commitments to achieve it. Do you have contracts that must be delivered on in some future month? Do you have relationships that are dependent upon your support? Make someone aware of these issues, or at least make sure a reliable person knows where you keep this type of information. If you have invested a lot of time and money in a strategic plan but have not shared your individual responsibilities for its completion, the plan could fail in your absence. Identify a teammate who will share in accountability for the plan (one benefit of doing this is that you have another person’s buy-in and assistance).

4. Evaluate and secure the appropriate insurance. How much insurance one needs is often a debatable question. But most will agree that you should have at least some minimum amount of life and health insurance. Don’t forget about other pertinent people in your business. You may want to consider “key man” life insurance for yourself or a certain employee, as well as business disruption insurance.

5. Prepare for financial and accounting issues. What would happen with bookkeeping and payroll? What about the stack of bills you were going to pay when you had a moment? Make sure you have some business protocols in place where your accountant and lender can work together if necessary. 

6. Make a list of key contacts. Include a short description of who they are and what your relationship is, so your spouse, business manager, or others can contact them. This could include your OEM contacts, key customers, vendors, bank, accountant, etc.

You may be thinking, “My business has grown to the point that I have moved other people into most of those roles already.” In that case, the abovementioned disruptions might occur if something were to happen to them instead of you. The point is that these kinds of contingencies aren’t what we normally think of when we plan our days, but rather are things we typically put off, intending to plan for them when we have time. If only the luxury of time existed when we’re faced with a sudden disruption.

Acting now will help ensure that you’re prepared for an unexpected business disruption and will go a long way toward protecting you, your family, and your business. 

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