A lot of people who start a business do so alone, or they may start it with a very small number of others. That can be a great way to begin because it helps keep overhead costs like wages low, leaving more money to be spent on growing the company.
When things are small, each person may have particular information that they have not yet shared with others. Each person concentrates on their own role, and together they form a solid team. However, every business owner needs to think about what would happen if something were to happen to one of them.
Unshared information could prove disruptive and costly
Let’s say you run a small construction firm that, while still young, is doing well. Maybe you fall from a height tomorrow while on site and are left in a coma for a few weeks. If you had already given someone else the authority to sign contracts or make payments for the company in case you were ever unable to. Then you may wake from the coma to find business has carried on, bringing in money without you. If you had not prepared for such a scenario, you may find everything has ground to a halt as no one could sign contracts to take on new projects or make payments to workers or suppliers.
Perhaps you run a small enterprise based around an app you developed with a friend and co-founder. You had the idea, they did all the programming, and you took care of finding clients while they took care of the tech side. If something happens to them, and you have no idea how to access or adapt the app to clients, you could be left with a business that quickly flounders.
Learning more about how best to document such choices early on is wise, as you can never predict what tomorrow might bring. The future of your business and the income that it provides to you and your family could quite literally depend on it.
