Part 2 of our series on protecting your business if you can’t work.
This post is for educational purposes only and is not legal or financial advice. Please work with a licensed attorney and financial professional for guidance specific to your situation.
Quick Recap
In Part 1, we covered two tools every business owner should know about:
- A Buy-Sell Agreement — a legal contract that spells out what happens to your business share if you become disabled and can’t work
- Disability Insurance — the money that actually funds that plan when the time comes
They’re two different things, but you often need both. If you missed Part 1, you can read it here.
Here in Part 2, we’re getting practical.
We’re going to walk through real-life scenarios that show exactly what can go wrong without a plan, and then talk about how to have the conversation with your business partner before it’s too late.
Why Real Scenarios Matter
It’s easy to read about legal agreements and insurance policies and think, “That’s not going to happen to me.”
But disability doesn’t care how hard you’ve worked or how much your business means to you. It doesn’t care how old you are, or how in shape you are.
The stories below are not to scare you. I’m posting them to help you see clearly what’s at stake. And what you can do about it right now.
Real-Life Scenarios: What Can Go Wrong
Scenario 1: The Partner Who Got Stuck
Marcus and Denise had been running their marketing agency together for six years. No formal agreement, just trust and a handshake.
Then Denise had a stroke. She survived, but her recovery was long. After eight months, it was clear she wouldn’t be coming back to work anytime soon.
Marcus was now doing the work of two people. But legally? Denise still owned 50% of the business. He couldn’t make major decisions alone. He couldn’t bring in a new partner without her agreement. And he couldn’t afford to pay her out because there was no insurance policy to fund it.
Denise needed income. Marcus needed help. But they were stuck, because there was no plan.
What would have helped: A buy-sell agreement with a disability trigger, funded by a disability buy-sell insurance policy. The policy would have given Marcus the money to buy Denise’s share. She’d get paid. He’d get full control. Everyone moves forward.
Scenario 2: The Solo Freelancer Who Lost Everything She Built
Keisha ran a successful graphic design business from home. She had steady clients, a great reputation, and a growing income. No business partner, just her.
Then she was diagnosed with an autoimmune condition that made it impossible to sit at a computer for more than an hour a day.
She had no disability income insurance. So when the work stopped, the income stopped too. Within three months, she had burned through her savings. She had to reach out to clients and let them go — one by one — watching the business she spent years building disappear.
She couldn’t even sell the business because there was nothing left to sell by the time she realized how serious things were.
What would have helped: An individual disability income insurance policy. It would have replaced a portion of her income while she was unable to work, giving her time to either recover, pivot, or sell the business on her own terms instead of in a panic.
Scenario 3: The Family Left Holding the Bag
Raymond owned a small construction company with his longtime friend and business partner, David. They had a buy-sell agreement, but they never funded it with insurance.
Raymond was injured on a job site, and needed care for months afterwards. Eventually, he passed away from his injuries. The agreement said David should buy out Raymond’s share from his family within 90 days.
But David didn’t have $200,000 sitting in a bank account. He scrambled for loans. The process dragged on for nearly a year. Raymond’s wife — who needed that money — was stuck waiting. Meanwhile, the business slowed down because David was distracted trying to figure out the finances.
This story is about both disability and death. The lesson applies to both: an agreement without funding is just a piece of paper.
What would have helped: A funded buy-sell agreement. Disability buy-sell insurance (for disability) and life insurance (for death) would have given Raymond’s family the money to care for him, and given David the cash to follow through on the plan quickly, without stress, loans, or delay.
Scenario 4: The Business That Couldn’t Be Sold in Time
Tanya ran a boutique events planning company. No partner. When she was in a serious car accident, she was unable to work for nearly two years.
She had some savings, but not enough. She tried to sell the business, but without her actively working it, the revenue had dropped significantly. Potential buyers lowballed her. She eventually sold for a fraction of what it was worth.
The hard truth: the longer you wait to sell a business while disabled, the less it’s worth. Clients leave. Revenue drops. The value disappears fast.
What would have helped: Individual disability income insurance to cover her personal bills while she recovered, buying her time. With income coming in from a policy, she wouldn’t have been forced into a desperate sale.
The Common Thread in Every Scenario
Whether there’s a partner or not, the pattern is the same:
No plan + crisis = loss of control.
And the people who suffer aren’t just the business owner. It’s their families, their partners, their employees, and their clients too.
The good news? Every one of these situations was preventable with the right plan in place.
How to Have the Conversation With Your Business Partner
This is the part most people avoid. They care about the business, and their business partner, but it feels awkward to talk about worst-case scenarios with someone you’re building something with.
But having this conversation is one of the most respectful things you can do for your partner. It says, I care about you, your family, and what we’ve built — enough to plan for the hard stuff.
Here’s how to approach it without making it weird.
Step 1: Frame It as Protection, Not Pessimism
Don’t open with “What if one of us gets sick?” That puts people on the defensive.
Instead, try something like:
“I’ve been thinking about how we protect what we’ve built. I want to make sure that if anything ever happened to either of us, we’d both be taken care of, and so would our families.”
That framing is about care, not fear.
Step 2: Come With a Few Questions, Not All the Answers
You don’t have to have everything figured out before the conversation. In fact, it goes better when you’re both discovering together.
Some good starting questions:
• “If you couldn’t work for a year, what would you want to happen with your share of the business?”
• “Would you want your family to be involved in the business, or would you rather they be bought out?”
• “Do we even know what this business is worth right now?”
These questions open the door. A good attorney and financial professional can help you walk through it.
Step 3: Agree on the “What” Before the “How”
A lot of people get stuck in the details before they’ve agreed on the big picture.
Start simple. Just answer this one question together:
“If one of us became disabled and couldn’t work — what outcome would feel fair to both of us?”
Once you agree on the outcome you want, finding the right legal and financial tools to get there becomes a lot easier.
Step 4: Bring in the Right Professionals
This conversation should lead to action, not just stay as a conversation.
Once you and your partner are aligned, you need:
• A business attorney to draft the buy-sell agreement
• A CPA or business evaluator to help establish what the business is worth
• An insurance professional who understands business planning to set up the right disability policy to fund the agreement
Don’t try to DIY this. The legal and financial pieces need professionals who know what they’re doing.
Step 5: Put It on the Calendar
One of the biggest reasons business owners never get this done? They have the conversation, feel good about it — and then life gets busy.
Before you leave the conversation, agree on a specific next step with a deadline. Something like:
“Let’s both talk to an attorney by the end of next month.”
Put it on the calendar. Treat it like a client meeting. Because honestly, it’s more important than most of them.
If You’re a Solo Owner With No Partner
You don’t have a buy-sell conversation to have. But you still need a plan.
Ask yourself these questions:
• If I couldn’t work for 6 months, do I have income coming in? (If not, individual disability income insurance is your first step.)
• If I had to stop working permanently, could someone buy my business? (Is it set up to run without you, or does everything depend on you personally?)
• Does my family know what to do if something happens to me? (Who do they call? What are the assets? Where are the documents?)
You may not need a buy-sell agreement, but you absolutely need a continuity plan and the right insurance coverage.
The Bottom Line
Nobody wants to think about getting hurt or sick. But the business owners who build something lasting are the ones who plan for the unexpected, before it happens.
Whether you have a partner or you’re running things solo, the question is the same:
If you couldn’t work tomorrow, is your business protected?
If the answer is anything other than a confident yes, it’s time to make a move.
Let’s Figure Out Your Next Step Together
Not sure what you’re missing or where to start? That’s exactly what a quick call is for.
Book a free 20-minute call and we’ll look at your situation together — no pressure, no jargon, just clarity on what makes sense for you and your business.