Happy Haunting Month!
As ITKL’s resident Halloween maven and in the spirit of the GREATEST holiday of the year (in my humble opinion), I am going to tell you a very scary tale about what can happen if you don’t have the right documents for your business. So, grab some candy, snuggle up in a cozy blanket, dim the lights, and prepare for some spine-tingling scares!
A business owner client (let’s call her Sally in honor of the quintessential Halloween movie, A Nightmare Before Christmas), was an avid traveler and loved to explore remote areas of the globe. She and her spouse, Jack, loved to hike, explore, and be immersed in nature – the further off grid, the better! On one such trip, they were exploring the rain forest of Costa Rica for a little over a week.
Sally was a savvy business owner and had key employees in place in her company that she trusted to handle the business of the business whenever she was away. She was a team-oriented boss and excellent at empowering employees to tackle the responsibilities she delegated. The company ran like a well-oiled machine, which is what allowed her to travel confidently, knowing the business would run and survive, even thrive, while she was away.
Sounds lovely, right? The kind of company all business owners strive for. But with any good horror story, the pleasant prelude is a set up for the scare. So, brace yourself.
While blissfully traversing the Costa Rican jungle, Sally had no idea trouble was bubbling and brewing at home. A hacker had managed to get into her business’ bank account, unbeknownst to her. Small withdrawals started to happen. When no action was taken by Sally or the bank, larger withdrawals started popping up and the account was draining. Finally, the bank noticed, but since Sally was off grid, she couldn’t be reached. Despite having trustworthy employees manning the helm, none were authorized to handle high level matters like banking and finance issues, and the bank couldn’t accept directions from the employees as they weren’t on the account.
By the time Sally was reached, the account had been nearly depleted. Sally returned from her thrilling vacation to a nightmare of paperwork and tens of thousands of dollars gone – from the very account she paid her employees their wages. What a frightening situation!
I don’t want terrible thoughts keeping you up all night, so I will tell you that Sally did eventually recover the stolen funds through the bank. But not without the hassle and headaches that came along with sorting it out, and some very sleepless nights worrying how she’d pay bills and payroll until the money was back in the account.
What could have been done to prevent this spooky scenario?
Sally could have put a Limited Power of Attorney (PoA) into place, appointing one of her employees as an authorized attorney in fact to make certain decisions and take certain actions on behalf of the business in Sally’s stead. Had an employee been appointed as Attorney in Fact in a PoA with authority to handle banking matters when those little withdrawals happened the authorized employee could have contacted the bank and frozen the account. The whole horrifying ordeal could have been avoided.
Who can use a Limited Power of Attorney? Any business owner!
Many coaches are a one-woman show in their businesses, so who can they appoint if they have no employees? Anyone she trusts – a colleague, relative, or even her attorney or CPA, if they are willing to take that role. Just don’t appoint someone who is traveling with you to a remote jungle in South America.
What does the Limited Power of Attorney do?
It allows you to temporarily appoint someone to make decisions and take actions that you specifically delineate in the document in the event that you are unable. Once the need for the appointment is done, you revoke the appointment.
Whether you are a business coach, health coach, life coach, or any other type of business owner, a limited power of attorney is an incredibly useful tool for solo entrepreneurs to protect the business they are building. Remember as a solo entrepreneur, if you are off grid, then your business is essentially off grid! Don’t leave things to chance while you are gone! Being scared when it’s make believe and in the spirit of Halloween is fun. But real life horror stories in your business are not, so take the steps now to prevent them and protect yourself and your assets.