Just recently I had a telephone call I didn’t expect nor ever wanted to get – a call saying a colleague had been killed in an accident. How shocking and sobering it was to contemplate a vibrant life abruptly halted; and to consider the impact sudden death has on family, friends, colleagues, workmates and workplaces. And it reminded me of hearing someone describe the difficulties they had experienced some years back, when a close relative and small business owner suddenly died and they needed to tie up all the loose ends and physically close down the business.

I remember their description of just how difficult a job it was, not just emotionally, but practically, as the business’s inner workings were known only by the person who had died. There were no instructions to follow and the process took the relative months to complete. In thinking about the potential for unexpected death or incapacitation of small business owners, it definitely is a risk management issue that needs to be addressed. So what steps could be taken, to prepare for this event?

A good beginning point is to have in one document and specific, physical location, the contact details of the people involved in the business i.e. the accountant, lawyers, bank managers, IRD contact person and insurance people. Notes should also be made as to the nature and extent of their involvement in the business.

Another step is to document the business’s financial management systems, so that important information can be quickly found. Include the location and processes used for accounts payable/receivable; the location of the previous year’s financial statements and the current year’s information, for future processing; the location of cheque books, bank statements and deposit slips.

Another action is to document the use, location and format of important databases i.e. the current and clients; suppliers and contacts. Ideally, the databases would have contact details for the named individuals/companies, so that contact could be made with key people, relatively quickly.

If the business is of a size that has one or two individuals who could step into the owner’s role in an emergency, then the “Beginner’s Guide to the Role” is a must-write document. The guide would give an overview and fast reference to such things as where to find important company documents; the important tasks undertaken by the owner alone and how some tasks are done. Timelines and schedules for paying GST, PAYE and ACC fees; the review date for the overdraft facility and loan repayments, should be included.

Preparing media statements that can be used in the event of your demise, is also useful. A list of individuals and organisations that would need to receive them i.e. existing clients, suppliers, specific sector groups, informal networks and specific memberships, is also recommended.

Talk to your accountant, lawyer and bank manager as soon as possible, to see what actions they recommend you take now, to prepare your business, in the event of your sudden death.

A parallel process – looking at your personal affairs – is also needed. If you haven’t already done so, do get your personal affairs in order. This means looking at your insurances, wills and so on. Do whatever you need to do to safeguard your business and your loved ones. Get all your personal paperwork up to date and ordered in such a way that important information can be easily found. File documents in a clearly labelled filing system and have key documents together i.e. birth and marriage certificates; bank accounts and investment information. Make your wishes known. Whether you want a private funeral or a public affair and jazz or heavy metal played, ensure you tell key people and write down your wishes.

It’s been said there are two certainties in life – death and taxes. The schedule for tax payments isn’t a mystery, it’s easily sourced. Death, however, is another story. We know it’s going to happen, we just don’t know when or how. So, are you ready for this? And when you’re gone, what will you leave behind you? ©

June 2005�