As an independent consultant, I love the fact that I don’t need to depend on anyone else to do my work. Oh sure, sometimes clients put obstacles in their own way, or they rely on a third-party to provide some key ingredient, but as far as what they expect me to produce, it’s all up to me. I don’t have to pay salaries and benefits or deal with employees’ excuses or personal problems, government-imposed employment rules, or hiring and firing. But this freedom comes at a potentially enormous cost.

Since the whole business rests on me alone, it would literally cease to exist if something tragic happened to yours truly. If I experienced an extended illness or disability that prevented me from working, I have nobody who could keep things going until I returned. My clients would just have to wait, or find somebody else, and there’s no guarantee that they would welcome my return by bringing their business back to me.

TechRepublic member reisen55 suggested that I write about this topic because he recently experienced a severe medical emergency that took him out of commission and essentially shut down his business. So in addition to recovering physically, he must also recover the attention of his customers.

How could we independents go about mitigating the consequences of such a contingency? Here are tips about what to consider when you’re creating your contingency plan.

  • Mentor a protégé or train some of the client’s employees: Nobody lives forever, so you want to groom someone to take your place eventually. That person can also fill in for you when you’re out of commission. The only trouble is, how do you retain such a person? If you hire them, then you have all the hassle and expense of being an employer. You could subcontract some work to them, but either you might not have enough to keep them busy or you might go crazy with the project management aspects of the arrangement. I’ve opted instead to try to bring people in my clients’ offices up to speed enough to cover for me until I get back — but your client has to agree to that use of their resources, and the possibility that you could make their employee worth more than the salary your client can pay them.
  • Ask a colleague to cover for you: Some kinds of consulting work can be handed off fairly easily, so if you know someone else in the business who could cover for you for a bit, that can work. If they’re your friend, they won’t try to steal the customer permanently, and you could reciprocate in a converse situation.
  • Keep funds in reserve: For most of my tenure as a consultant, my finances have been right on the edge of insolvency. Month to month, I’d collect the checks and hand them over to my creditors. That strategy is doomed to failure. Besides feeling like you’re getting nowhere, one hiccup in the cash flow could torpedo your whole operation. While I still have nowhere near enough set aside to be able to take a year off (the ideal), I have managed to create enough cushion to get through a short-term disaster. It wasn’t easy though. My good friend and mentor Ken Lidster once told me, “It doesn’t matter how much money you have, it’s never enough.” He was right. You can only save for a rainy day by exercising discipline and going without some of the things that you “need” to have until later.
  • Insure: I resisted buying any insurance for a long time, because it’s obviously a racket. You will likely pay much more over the long term by having insurance than by going without, but insurance eliminates the sudden, devastating expenses from which you might not be able to recover. Health insurance is a must. If you’re down and you can’t generate any revenue, you certainly can’t afford to pay thousands in medical costs. Disability insurance is also worth considering, if a disability could prevent you from working. For me that would be eyes, hands, and brain — though my wife might argue that some or all of those are already compromised.
  • Communicate: Most importantly, if something does interfere with your work, make sure you let your clients know about it. Give them an honest estimate of how long you’ll be unavailable, and work with them to form a plan for how they’ll get along without you. Taking care of their needs when you’re in trouble is the best recipe for getting their business to snap back when you do.

Have you ever experienced this kind of situation? What did you learn from it for the next time? Do you have a contingency plan?