Ina Opperman

By Ina Opperman

Business Journalist


Who will run your small business once you are gone?

Nobody wants to work or live forever and if you are a small business owner, you have to think about who will take over from you.


Who will run your small business once you retire, become critically ill or disabled or pass away? This is an important question to answer for a small business owner to ensure you plan for the continuity of the business.

For many small business owners, running a small business is a labour of love, filled with dedication, hard work and countless challenges. According to a 2019 study by the Small Business Institute, only around 30% of small businesses in South Africa survive beyond their first year.

The success of any business requires some skill, a bit of luck and a lot of dedication and hard work and therefore, if a small business does ‘make it’, it is worth looking after, says Sharon Hamman, senior legal adviser at Momentum.

“As the saying goes, the difficult part is not making the money but rather keeping it and the same rings true for small businesses.”

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According to a survey conducted by the Small Business Institute in South Africa in 2018, only 33% of small businesses have a formal business continuity plan in place and 41% of small business owners do not have a clear idea of who will take over their business one day.

Business continuity plan for small business owner

Hamman says a business continuity plan is the key to ensuring your business can continue to thrive if anything happens to you. “Just as each individual should have a personal financial plan and a will to protect them and their loved ones against major life events and its associated financial risks, so too is it necessary for a business.”

As a business owner, it should be high up on your to-do list to consult with your financial adviser to get this plan in place. “Continuity planning is not only a business strategy, but also a responsibility to the legacy you leave behind. While it is not complicated, there is a lot to keep track of and put in place.”

Hamman says a business continuity plan sounds simple enough to make sure that the business continues, but the devil is definitely in the detail. Business continuity is the core of any business continuity plan and it entails many facets. It is concerned with the future existence of the business during your lifetime and beyond and entails:

  • Ensuring that there is a practical plan to address the future ownership structure of the business if you become disabled or in the event of your death. The aim is to protect all parties that depend on the business for their livelihood, including the business owners, their dependants and the employees that helped to build it.
  • Considering the funding structures of the business and securing its financial future by protecting its balance sheet when life events happen. The key is to ensure sufficient funds are available to service or settle debts to creditors. As most business owners literally sign their lives away to procure funding for their businesses, it is vital that debts can be settled to protect your personal estate. You do not want your business to leave your personal estate insolvent.
  • Protecting one of the most valuable assets of any business: its people. It weighs up the risks associated with losing key employees and what the costs would be to replace them. It focuses on the retention of staff by implementing simple, yet effective incentive schemes. It helps you to take care of them in the same way that you want them to take care of your business.
  • Not only focusing on business continuity associated with your life events, but also considering the future expansion and growth of the business and making sure the business is geared to meet those future milestones.
  • Considering your retirement plan and how it interplays with your business’ future plans and how to secure your financial future beyond retirement while protecting the interests of all stakeholders. “Not a simple exercise, but necessary,” Hamman says.

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Get advice about small business continuity

“As a small business owner, your vision and dedication drive the success of your venture. Protecting your business against life-related risks is a responsibility that should not be overlooked. It is good for you, your family and your employees and therefore good for your business.”

She says with the plethora of options floating around the market it is vital that small business owners seek professional advice from a financial adviser to guide them through the planning process. A financial adviser with the necessary business planning expertise can help assess the risks and opportunities and recommend the most appropriate financial products to make sure those risks, needs and goals are addressed.

“Engage with your financial adviser as part of taking proactive steps to secure your business’ future. With a solid plan in place, you can leave a lasting legacy and empower your business on its journey to success.”