When Bill Kenney got the news: “You’ve got prostate cancer,” he was caught by surprise.
The 44-year-old avid athlete and West Hartford entrepreneur never felt so fit and well. But a routine blood test tipped his physician off that something was not right. A biopsy confirmed the diagnosis in January and surgery is planned for this month.
Kenney is a small business owner, and co-owns PositiveChanges Hypnosis Center in West Hartford with his wife, Kelly Kenney. Together, they also run three networking groups.
Facing major surgery and a serious illness is the kind of news no one welcomes. But for many small business owners like the Kenneys, it’s news that threatens not just their health, but their livelihood.
The Kenneys are fortunate. Not only does Bill Kenney have a promising diagnosis because his cancer was detected early, but their business plan doesn’t require Bill’s day-to-day presence at work in order for them to generate income. They also have premium health care insurance to cover hefty medical bills.
But for many small business owners, there are no sick days with pay. Many entrepreneurs work hard just to eke out a living, said Bernard Sweeney, director of the U.S. Small Business Administration Connecticut District Office.
For those operating on a tight margin, health care insurance isn’t an option, he said, and high medical bills combined with a lack of revenue can spell bankruptcy.
Prepared For Disaster
Sweeney advises all small business owners to develop a “Plan B” in the event they face a serious illness. Having an emergency plan is especially critical for family businesses whose only income is dependent upon their business.
Without such a plan, the results can be devastating, Sweeney warns.
Unfortunately, most small businesses do not have a plan and a high percentage of small businesses can’t afford health care insurance or business continuation insurance, he said.
“It is a major problem,” Sweeney said. “Baby boomers are getting older and they have never experienced a catastrophic illness. They’ve never been sick. They aren’t prepared.”
Sweeney sees the consequences. He refers those without health care insurance to social service agencies for financial assistance with their medical expenses. Some lose their homes and their cars, he added.
“We always make sure that [clients] have home base covered first — their bank loan and mortgage payment. That is why they need to figure out what they need each and every month,” Sweeney said.
Fortunately for Kenney, who is facing at least two weeks out of work after his prostate surgery this month, he and his wife already had a “plan B.”
Kenney readily admits that the plan was developed as a long-range strategy for business growth to help them add five new hypnosis centers in five years. It wasn’t supposed to be emergency planning.
Yet, their experience strikes home the importance of having such a plan. Without the health care insurance and an emergency preparedness plan, a serious illness “could take away the business,” Kenney said.
With the Kenneys’ management strategy intended to allow each center to be a stand-alone facility with autonomous operations, it became a good solution for what the couple now faces.
Fortunately, Kelly Kenney and the staff of 10 can operate their enterprises without Bill Kenney’s day-to-day involvement temporarily.
But he will help out remotely while convalescing at home. “I will still be able to use e-mail and do business at home,” he said.
When Kenney returns to work about two weeks after surgery, he expects to work half days for a few more weeks.
“Ultimately, your first choice is to hand off what you can internally,” he advised. If need be, they will temporally outsource some of the work that they do themselves, such as their bookkeeping.
Good friends and family members have offered to fill in a variety of roles. So far, the Kenney’s haven’t taken any of them up on their offers. “But it is nice to have that option,” he said.
Kenney doesn’t anticipate that the momentum experienced at the hypnosis center, which has grown by 50 percent since he and his wife acquired it 18 months ago, will take a hit because of his absence.
He advises other small business owners to make sure they have the best health insurance they can afford.
“It’s pay me now or pay me later,” he added. “It certainly is expensive and an investment. … Other people have a lot more issues and are debilitated for a significant amount of time.”
Avoiding Devastation
Having an arrangement with a third party to run the business and keep it stabilized in the event of a principal’s major illness or even death should be part of a contingency plan, said Lawrence Marziale, an accountant with Kostin, Ruffkess & Co. in Hartford.
Marziale sees first hand the kinds of issues small businesses face when a principal is unable to work.
“We try to plug all the holes,” he said. Often, in professional groups, such as a dentist or accountant, a deal is struck with another professional who is not in direct geographical competition, but obviously works in the same profession in the region, Marziale said. For service business, such as a repair shop, a continuation arrangement may be struck with the second-in-command at the business.
“The small business owner has unique circumstances,” Marziale added. Having an action plan, and making sure the spouses know where all the important documents are located, is critical. When key people in a business die, without a continuation plan, it’s not unusual for employees to leave, worried they may lose their job in the near future, and for key customers to also leave, he warned.
Business owners need to have a plan in place, including updated life insurance policies and wills, to ensure that their company is taken care of in their absence, he advised.
