Design Thinking: Your Business and Disability | Spring Planning

When you are working on your business plan — or not working on it, as the case may be — the risks that you are usually considering are things like:

What happens if you cannot — physically or mentally — show up for your business?

It’s a bleak consideration. Many of us just toss the idea away, simply seeing it as either impossible or unsolvable. The truth is, however, that’s it’s possible and, if not entirely , it’s manageable.

Why It’s Possible, Even for You

Over 11% of Canadian adults have experienced one of the three most prevalent disability types: pain, mobility, or flexibility. Of those 11%, more than 40% experienced all three at the same time.

After that, the next commonly reported disabilities were mental/psychological at 3.9%, dexterity at 3.5%, hearing at 3.2%, and seeing at 2.7%. Memory and learning disabilities each hit 2.3% of the population¹ .

That’s about 28.9% of Canadians, dealing with a serious setback.

Imagine how well you could run your business if you were in constant pain or struggled with movement. Imagine if you could not see, hear, or were dealing with catastrophic psychological issues.

Most people imagine disabilities as a broken leg, and feel confident they could work through that. But a brain or back injury is going to make your job incredibly difficult, no matter what you do for a living.

Business Resilience

Our sister company, Admin Slayer, has been running a series of productivity articles all throughout 2019 all about , the process of adapting well in the face of adversity, trauma, tragedy, or stress .

The idea is to create a business that is strong enough to not only support and expand your vision, goals, and dreams, but also to run without you , should you need it to. This involves creating financial resilience, delegation, , creating powerful processes, plus:

A Written Business Plan

You may feel that you have things kind of in your head, and that it would be difficult to write things down, and maybe business plans are just for people who want loans, so why do you need one?

A written business plan does a lot more than qualify you for a loan, however. It’s the concretization of your vision and strategy. It’s a reminder not only of where you’ve been, but where you are going. This is useful not only in reminding yourself how far you’ve come — vital in the maintenance of your positive focus — as well as keeping your eye on the target.

It will help you say “no” to the wrong things, so you can say “yes” to the right things.

It will be your North Star, providing direction and guidance on your darkest days.

It will provide clarity for your team and your staff, not only about what you are planning, but also how they play a role in your plans. Muddy expectations are a killer for morale and engagement — clear expectations make it easier for your team to do their jobs well, but also to provide great insight and catapult you beyond your targets.

A written business plan will make it easier for your team members to step in and support you when you can’t be there, whether you are on holiday, parental leave, sick, disabled, or even moving into new ventures. Should you decide to sell your business, a solid business plan makes your business much more interesting to prospective buyers.

Procedure Manuals & Job Descriptions

Argh! Bureaucracy!

Again, setting expectations and clearly outlining where you’re going, why you’re going there, and how you’re going to get there — no matter how big or small “there” is — makes it so much easier for your team to do their jobs well. How can they meet your expectations if they don’t know what they are?

Don’t feel you have to write and maintain these procedure manuals and job descriptions, though² . We’ve found that having the person who is learning the job write the procedures, and outline their job descriptions, communicates clearly what they do and do not understand, and where communications are being garbled. This means of course that your staff be wrong about how they wrote these procedure manuals and job descriptions, but simply misinformed .

If you ever can’t be there, whether for great or terrible reasons, knowing that these tools are in place, and that you and your team members can access them from anywhere, will ensure that your business is able to run no matter who happens to be holding the wheel.

Empower Your Team

It is absolutely fair to feel nervous about handing off these decisions — you should. At the end of the day, everything is still in the eyes of your customers. To manage for this, create a communication system that allows you to the decision making and understand what decisions are being made, why, and when. As you provide ongoing feedback, your team will get better at making decisions, and you’ll become freer to not only be away, but to focus on things that get you excited.

Create Skills Overlap

Whether you are working with partners or staff, you need to ensure there is some redundancy on your team. Ideally, more than one person understands how to complete a particular task, process, or strategy, and is involved in its continuous evolution. This goes for not only your work and decision-making but also for those of your team members. You’re not the only one who may be away — unexpectedly or not — and building resilience into your team means enough redundancy that your business doesn’t come to a screeching halt when any one person can’t be there.

Passwords, Authorizations, and Financial Management

If you’re entirely unavailable, will your bills be paid? Will your communications go out? Will your out-of-office message be placed on your email? Will your appointments be rescheduled?

Ensure that someone (or a few someones) have access to your passwords, authorization to make basic financial decisions like bill payments and payroll, and that anything you’re working on is handled and well communicated.

A fully operational team, whether in-house or virtual, can ensure that all of the above is managed and in place long before a hiatus occurs.

Financial Resilience

What if the money just…stops?

If you, your family, and your business, rely on your ability to get to work each day and produce, a sudden illness or disability is going to impact a large number of people.

There are several ways to mitigate this impact:

Cash Flow and Debt Management

A cash flow management system will ensure that you know exactly what it costs to run your life and your business successfully. It can also help you pinpoint areas where you can make sacrifices, if you need.

A debt management strategy will also ensure that your debt is structured such that you can make appropriate adjustments to any debt you may have, and roll with the punches as they arrive.

Emergency Funding

An emergency strategy is also important, and part of your cash flow plan. Your emergency fund could manage for that flat tire on a Sunday in rural, snowy Canada in the dead of winter. It can manage for the variations of income that are typical for many businesses. Finally (and: of course) your emergency fund can help you manage through the short-term and unexpected loss of income.

Insurance on your ability to work is just like insurance on your house or your car: you pay for it, but you sure hope that you never have to use it. If it’s a no-brainer to protect your property in case of fire, theft, or damage, surely protecting your MoneyMaker (YOU) requires even less grey matter.

It’s worth noting that if you’re a health care professional, you’ll often qualify for extra-special bells and whistles on your disability policies, including protection in case of occupational HIV and additional benefits if you perform invasive procedures.

Personal Disability Insurance

This is the insurance that is intended to replace your personal income if you are disabled. There are a few different ways to get this insurance:

Group Disability Insurance

This is the kind that you might provide, as an employer, to your employees. You can also pick it up through your industry association, alumni association, or local chamber of commerce. It’s generally the least expensive option, as the risk is spread across all the people in the group, reducing the risk for the insurance company.

A few key things to remember:

• Max Benefit vs Non-Evidence Max Benefit: All group policies will have a “maximum benefit” that’s usually a dollar figure, say $5,000 per month. But check the fine print — there’s another “maximum benefit”, called the “non-evidence maximum benefit”. This means that if you haven’t submitted medical evidence (which they don’t generally ask for), this is the maximum amount you’ll receive. It could be as little as 50% of the maximum benefit, say $2,500 per month. That’s a big difference in your pocket. Check for both and ask your supplier or group administrator for the necessary forms to submit medical evidence.
• Own Occupation vs Any Occupation: You are considered “fully disabled” if you qualify under the terms of the contract. If your contract has an “own occupation” definition, this means that if you are not able to perform the duties of your , then you are considered fully disabled and eligible for benefits. If your contract has an “any occupation” definition, this means that if you are not able to perform the duties of any job for which you are reasonably qualified by experience and education , then you qualify. This means if you’re a professional lawyer, doctor, accountant, or financial planner and can’t do job, but you could teach it, you could be kicked off benefits. All contracts, whether group or personal, will have these descriptions. Many group contracts will give you an “own occupation” definition for the first 24 months of disability, with an “any occupation” definition thereafter. This can get really complex. Just know that “own occupation” is the one you want, and that if you have an “any occupation” definition either right away or after 24 months, your benefit may be on shaky ground.
• Elimination or Waiting Period: This is the length of time you must be totally disabled before your benefit starts to pay, and it changes from plan to plan so look for the number. It can be anywhere from 30 to 240 days, but 90 days is pretty standard. Some organizations will have short-term disability plans in place to manage for this waiting period, and others will simply pay this out as “sick pay” out of their own pockets, choosing to self-insure. Remember that your emergency fund — both personal and business — is available for this.
• Benefit Period: This is the length of time you’ll receive a benefit if you are disabled. Your options are usually 2 years, 5 years, and to Age 65. Obviously, the longer the term, the more expensive the product. If you have the option to choose, choose the longest.
• Premium Payment: You can choose to have your business pay the premium but it’s much more tax-efficient to pay this personally. Why? Because it’s taxed differently depending on who pays the premium. If your business pays the premium, and deducts it as an expense, then any future benefit you receive is taxable income to you personally. If you pay the premium with after-tax dollars, then any future benefit you receive is tax-free to you personally. Given that disability benefits are limited to a percentage of your pre-disability income, you will want to keep as much of that benefit in your pocket as humanly possible. Pay for it personally.

Personally-Owned Disability Insurance

This is more expensive, and involves more work on your part to qualify. However, there are some great benefits:

1. These policies are hugely customizable and you can take advantage of all kinds of bells and whistles, including partial and recurring disability benefits, automatic benefit increases as your income grows, protection for your specific industry, adjustments to your benefit to meet the increasing cost of living, and even opportunities to have your premiums refunded if you don’t use the policy.
2. Fixed premiums — it’s one of the coolest³ , least discussed things about personal disability insurance. Your group benefits premiums are priced based on your age, and increase as you get older. They could be renegotiated altogether, when the policy renews or your group finds a new provider. Your personal disability plan can be non-cancellable (the insurance company can’t cancel it unless you stop paying — only you can) and often will not increase premiums until your age 65.
3. It sticks around even if you’re on leave, whether that’s maternity, parental, or that sabbatical you always dreamed of. It’s yours and you can do what you want, within reasonable limits, without losing your benefits.
4. Portable — It doesn’t matter where you work, you’ll always have this policy. You can change businesses, jobs, careers, and your policy comes with you.
5. You are less likely to be in a situation where the insurance company is doing their darndest to stop paying you. That’s a thing, and we can tell you stories about it. We’ve run into it several times with group disability insurance providers — once that 24 month “own occupation” period is over, pushback is pretty much standard. If you’d like to read some case law, here’s a link to law firm (that we don’t know, we just googled for case law, so we’re not recommending these folks) who has dealt with some interesting cases.

Business Overhead Insurance

A business overhead insurance plan provides for this. The premium is paid by your business, and the benefits are paid to your business. The premiums are generally significantly cheaper than a similar benefit for a personal plan, and this is because the benefit period is nearly always shorter. The reality is that your existing business will only carry on so long without you — so a year or two of benefit may be all your business needs to either hold steady for when you return, or give you time to close up shop without ruining your credit and the lives of your staff.

Business Buy-Sell Insurance

Got partners? Got a shareholder agreement? Please say “yes” to the second question if you’ve said “yes” to the first! If not, get thee to a corporate lawyer

If you have such an agreement or are in the process of writing one, check for a long-term disability clause. Get one written in if you don’t have one. If you or your partner(s) are disabled for the long-term, you need a plan in place to ensure that all partners are financially taken care of if somebody dies, is sick or disabled, or divorces.

Critical Illness Insurance

Won’t happen to you or anyone you love? The Canadian Cancer society reports that nearly 1 in 2 Canadians have had or are expected to get cancer. Sadly, it will happen. Compounding illness, grief, and pain with financial stress is just not worth it.

Murphy’s Law

“Anything that can go wrong, will.”

Remember, your risk management strategies should be:

Even if Murphy was right, you can use much of the planning in this article to improve your business operations, make it saleable, train your staff, increase your tax deductions, and stop worrying — potentially the biggest win for your life and your business.

¹ Source: Canadian Survey on Disability, Statistics Canada, 2012

² Admin Slayer creates procedure manuals for existing long-term clients. We will consider creating these on a project basis as well, depending on scope and slayer availability.

³ Only finance nerds think things like fixed premiums are “cool.”

Originally published at https://springplans.ca on May 27, 2019.