How to Build a Safety Net as a Sole Proprietor

As a sole proprietor, your business relies heavily on you and your decisions. But what happens if you can’t be there because of an unforeseen problem? If you struggle to fulfill orders or meet deadlines, the loss of income you incur could be a critical blow to you and to any workers you employ or contract with.

From sickness, to disasters, to other unforeseen events, it’s imperative to be prepared for every situation so that you can keep your business running smoothly and on track to your goals.

Reasons you may not be able to work

While we don’t want to sound like Chicken Little, constantly afraid of the sky falling, there is a wide range of common and uncommon scenarios that would require a contingency plan in order for your business to stay afloat.

In the short term:

  1. Brief illness
  2. Unexpected flight delays
  3. School closures or child illness
  4. Home or family emergency
  5. Storms or extreme weather


  1. Severe sickness or injury
  2. Becoming a full-time caregiver for a family member
  3. Natural disasters
  4. Life-changing situations

While some of these situations are rare, once they pop up it’s too late to keep your business running without a hiccup unless you have a safety plan in place. And over the course of years, you’re extremely likely to experience one or more of these work stoppages. Consider this level of advance planning as another form of business “insurance.”

What is a safety plan?

A safety plan is a strategy that outlines what actions need to be taken, by you and by others, in response to a business interruption or unforeseen event. Safety plans are crucial in order to prepare you, your business, and your employees to carry on (as normally as possible) and continue serving your customers and clients in the event that an unexpected problem arises. Without one, your business may not be able to run or function properly.

When your business can’t function, a safety plan allows you to cover your losses so that you have a financial cushion in the case of total work shutdown.

Six steps to a solid safety plan

Feeling overwhelmed about where to start? Follow the checklist below to cover all your bases.

1. List potential risks that could threaten your business 
Compile a list of the risks that could threaten or derail your business. While every risk list will include events like personal sickness, much of your list will be unique to your business, geography, family makeup, and life circumstances. It may include natural disasters particular to your area, likely family obligations, or risks related to your own age and health, as well as making space for unforeseen events that are universal in nature.

2. Create a communication plan 
First, you need to establish a chain of command. Who will be responsible when you can’t be in charge? Depending on your company structure, this could be a trusted employee, business partner, or even a spouse or attorney.

Be sure to communicate with customers as well. If you need to cancel appointments, or you aren’t able to fulfill orders, your customers need to know as soon as possible.

3. Speak with the supply chain 
Your suppliers need to know where to go or what to do with upcoming deliveries and ongoing orders. Reach out to let them know the situation, particularly if there is a disruption like a natural disaster. If a key supplier suddenly isn’t available, you also need to figure out if they have their own recovery plan or an alternative supplier you could get in contact with.

4. Carry sufficient insurance 
Your insurance policies should cover the biggest risks that your business faces. If you live in a disaster prone area, be sure that your policy covers any damages or compensates you for lost income if your business isn’t operational due to a disaster.

5. Keep data and information safe 
Don’t keep all the information to yourself! What happens if you need to contact employees or vendors but their information is not accessible to you? Or if those in charge of your business in your absence can’t access crucial records? One way to prevent this problem is to store all important data and information on a reliable cloud backup provider that you can access from anywhere, and share access to when necessary. This helps ensure your records are safe and available to those who need them, no matter how far away you may be from the office.

6. Test the plan 
Once you’ve solidified your safety plan, educate your employees and stakeholders so that they’re aware of what steps they need to take in case of a short-term or long-term issue. Revisit this plan annually or biannually to update it with new information, roles, data, or procedures if the old ones have been superseded. Don’t forget to share any changes or updates with your team as well.

Proactively protecting your business

RISBDC business counselors are available to help small businesses like yours create the ideal plan to keep your business safe, no matter what may happen. We’re a free, confidential resource, here to help you minimize risks and protect your hard work. Schedule an appointment today.