What happens to your business if you get hit by a bus?
If you were hit by a bus, what would happen to your business?
Did that startle you? Admittedly, it’s a frightening question; but as an agency owner, it’s one you should be familiar with. In the past, the bus question has likely come up in regards to your team. When one team member has a unique skill or knowledge that no one else has, it can pose problems. For example, let’s say everyone on your team is nervous because Jackie is the only one who knows how to traffic projects. With the bus question, you’re really saying to your team that we need to better document our processes (in case someone doesn’t show up to work tomorrow).
But in this article, I'm not talking about your team members. My question is for you. What happens to your business if you get hit by a bus? Of course, "hit by a bus" is simply a metaphor for an unexpected catastrophe. This could be an extended illness, caring for a family member, or even property damage caused by mother nature. If you needed to take time away from your business unexpectedly, could your business survive without you?
Business Continuity Plan
A business continuity plan should contain your immediate answer. This is a plan that outlines how a business will continue operating after an unplanned disruption. In other words, it’s scenario planning to protect you from any "what if" situations. Your business continuity plan becomes a reference guide for everyone else in your agency if you get hit by the proverbial bus. Someone on your team must know how to access critical information (such as logins and passwords), view financial account information (so payroll still happens), or simply have the authority to sign checks (so vendors will still do business with you).
Here's a good way to think about this. If you think your business would cease to exist without you in the picture, then we need to put a plan in place today. Below, I've created a helpful checklist to get you started. If you're interested in customizing a plan specifically for you and your agency, then check out my Agency Coaching advisory service.
Business Continuity Plan Checklist
As I think through this checklist, I'm reminded of a quote from Dwight D. Eisenhower: "Plans are useless, but planning is indispensable." There are so many possible scenarios that may invalidate this checklist. But even so, planning for the "what if" prepares you and your team to think about how to survive (and thrive) if you're not around.
Step #1: Update your buy-sell agreement.
A buy-sell agreement is more commonly known as a “buyout agreement” or “shareholder agreement.” If you are not familiar, it’s helpful to think of it as the business equivalent of a prenuptial agreement between you and your business partners. The buyout agreement instructs and reminds everyone how to handle the sale or buyback of an ownership interest if a partner gets “hit by a bus” (and will not be returning to the agency).
Your assignment: If you have a business partner, then work with your lawyer to establish, update, or fund your buy-sell agreement.
Step #2: Look into 'key person' life insurance.
Key person insurance is a life insurance policy that works much like a regular one. Your business purchases the policy, owns the policy, and will also be named as the beneficiary. This is useful and important in those “what if” scenarios.
Proceeds from the insurance policy can be used to keep the business active while your partner(s) finds someone with a similar skillset. While you're talking to your insurance company, you might also want to look into critical illness insurance. This covers the cost of replacing indispensable people who are out of work for extended periods on medical or disability leave.
Your assignment: Find out more about 'key person' life insurance and see whether it makes sense for your business.
Step #3: Develop redundancy.
We need to limit you as a single point of failure. If you don't have a business partner, then you need to identify your #2. This person will be your backup, and is responsible for taking over critical tasks while you are unavailable. I have outlined a few questions below to help you think through building redundancy in your organization. As a heads up, these questions are not easy to answer. Your answers will require a punchy cocktail of humility, creativity, and vulnerability.
What is your role? I'm not asking for your title; instead, I'm asking what role you play in your business. Write the job description you would give to a headhunter looking for your replacement.
In your role, what decisions do you make?
What does your team depend on you for?
When you are on vacation, what tasks go undone because only you know how to do them?
If you are hit by a bus, who is authorized to make decisions on your behalf? Do they know this?
What information do you use to make those decisions? (I'd be remiss if I didn't mention to think about passwords and financial information here.)
What is the best way to transfer information to your #2 so they can make those crucial decisions?
Your assignment: Identify your #2, and make sure they have visibility on the answers to these questions.
Step #4: Hold knowledge transfer sessions.
As the owner, you hold a lot of what I call "agency memory": collective learning built up by being with your business from the beginning. You might cringe when folks on your team miss an important step in your delivery process; after all, you are able to execute client projects based on muscle memory. But if that knowledge is not seamlessly transferred to your team, then you remain a bottleneck in your business. Let's remove you as the bottleneck and open up knowledge to the right people.
First, let's look at how you answered the question above—what tasks go undone when you are on vacation? We now have a list of the tasks only you know how to do.
Second, we need to choose a method for communicating this information to your team. There are multiple approaches you can take here: writing, telling, or showing. The method you use depends both on how you communicate and how the other person receives information.
The easiest way I've seen to transfer information has been through job shadowing, where someone learns what you do through observation. However, to ensure that your shadow is really learning, you need to have them do the task so you can observe and coach.
Your assignment: Identity the top 5 things on your list of tasks that go undone when you're on vacation, and commit to knowledge transfer sessions with the appropriate folks on your team.
Step #5: Document. Document. Document.
Important information cannot only exist in your head. Instead, we want this information to live where its constantly being updated and accessed by those you deem important. This information has to be a single source of truth. Word documents on a shared file do not pass this test, because they usually don't get updated. Your best bet is to leverage your internal project management system e.g., Basecamp, Asana, ClickUp, etc.
All the tasks that you are responsible for should be documented so you can pass the baton if necessary.
Your assignment: Begin documenting the top 5 tasks that go undone when you're on vacation.
Key Takeaway
Ultimately, this is a discussion on succession planning. How will you ensure that your business remains a valuable asset if you get “hit by a bus”? Although there are several factors that influence the value of your agency business, the most important driver of business value for agency owners is decision quality. I get that many of you simply want to make sure your business will succeed today. Thus, planning for tomorrow is a task that often gets kicked down the road. This thinking is completely rational. However, the point of this article is to serve as a counterpoint to that type of thinking. I want you to make strategic decisions today, so that people aren't forced into a corner if you get hit by the metaphorical bus. The decisions you put into place right now could prevent your business from bankruptcy proceedings or being sold at a fire-sale price. Preserve your legacy and stay one step ahead.