Emergency kit for solopreneurs: 4 steps to keep your business running when you are absent

In this article, Kerstin Brunner, finance ambassador, will explain how solopreneurs can keep their businesses running in the most predictable and unpredictable situations.

Solopreneurs love what they do. They made the crucial decision to be self-employed; to be free and make decisions on every company aspect. They give 100 percent for their clients and partners. But what happens when something happens to them? How can their business still run when they are absent and not able to work?

In just four steps, you will learn what you can do to be prepared for scheduled and unscheduled absences.

Solopreneurs in Germany

There are around 3,5 million companies with different corporate names (GmbH, AG, KG) in Germany. Of these, around 2 million are solopreneurs; people who run a business on their own. Solopreneurs tend to give everything for their clients and partners, every single day. Their business is their passion, their life. But what happens if they themselves suddenly fall ill? Who takes care of the business then?

Typical reasons for an absence

To create an emergency plan that will work in any situation, it’s really important to think about all the different scenarios that can happen. Typically, you can divide these into two categories: scheduled and unscheduled.

Scheduled absence

Perhaps you have a holiday planned or maybe you need to go to the hospital for a planned surgery. When it comes to scheduled absences like these, you have the possibility to make plans and prepare everything for your absence beforehand.

Unscheduled absence

Unscheduled scenarios are much harder to handle. What if you get into an accident and need a long, unexpected stay at the hospital or you suddenly need to care for someone in your family? In these cases, you most likely won’t have time to make plans, you will just need to deal with the circumstances as they are.

Your representative

It’s a good idea to include a trusted person in your emergency plan. Someone who is able to take over tasks and knows what to do. Ask yourself the following question: Who can take responsibility for your business? Your partner, a friend or a business partner might be that someone. Think about who you trust and who can take over the steering wheel of your company.

This person doesn’t need to be an expert in your field. What they do need to do is keep your business alive. They need to be able to take a look at the numbers, communicate with stakeholders and find solutions to potential problems which will suit all people involved.

Make sure that you prepare this representative adequately for an emergency case. Having an open conversation in which you share possible occurring topics, timelines and financial insights makes it much easier for this person to take responsibility for your company if needed.

Step-by-step plan (Stufenplan)

The tasks that need to be taken care of depend on the length of your absence, ongoing projects and finances. Therefore, it is important to define time periods and tasks that need to be done till you come back, or the company needs to be liquidated if you can’t return. Keep in mind: Tasks for a six-week absence will be very different than liquidating the business.

Communication is key! Your emergency business partner should know about open projects and needs a list of contact persons. It is important to let a business partner know if an appointment can’t take place or if project tasks need to be rescheduled. To keep business relationships healthy, partners need to know about an absence and what it means for their projects or orders.

Documents to help your representative

For an emergency plan, you need to be able to provide the necessary information and documents. Here are four important documents that your representative may need:

Entrepreneur and bank proxy

Most people think that a private healthcare proxy includes the company. In most cases, this is not true. It is highly recommended to set up an entrepreneur proxy and an extra bank proxy to enable a quick and easy way to handle payments, for example. Learn more about private proxy, will and care in this article. 

A list of earnings and spending

It is important to have an overview of all earnings and spending: Liquidity is one important part of keeping a company alive. Create a plan that includes what should happen if the liquidity declines or falls under a defined value.

A list of insurance and existing contracts

One part of your spending is having to pay your monthly bills. Office rent, insurance, a company car and many other payments can affect your financial situation. Make sure that you have a minimum financial buffer of three to six months of the money needed to pay all your monthly bills.

A list of ongoing projects

Create a list with all project partners and clients including open projects, offers and orders. Provide contact details such as names, email addresses, phone numbers, addresses and positions. Describe tasks and to-dos and note deadlines and appointments.

Be prepared

As you can see, creating an emergency plan that can be effective in every situation requires time and effort. But, when you are done with the planning and you have everything sorted, you will feel much more comfortable because you know that your business will keep running, even when you are absent. This is extremely important because your business is your only income!

If you need help to build your business emergency kit, Kerstin Brunner is happy to support you. In multiple personal 1:1 sessions, you will define the specifics of an emergency kit that works in every situation. Get more information on Kerstin Brunner’s website or on her LinkedIn.