Rainy Day Finance Tips for Self-Employed Designers

By Robin Callan

At my psychological core, I'm a people pleaser and am simply mortified if I feel like I'm burdening anyone with anything. I'm also a grandmaster at creating imaginative scenarios in my head to try and cover the "what if's" in my life. For instance, when I was recently hospitalized for a scary blood clot in my leg and three pulmonary embolisms, then gasped in horror when I read that famed rapper Heavy D's autopsy revealed he'd died of the very same condition, my mental tangent went something like this:

"Oh my gawd, if I didn't know the symptoms of a blood clot, I could have died like Heavy D! People need to know how I knew I had a blood clot so they can catch it early if it happens to them!" (A little PSA from me to you: my foot was superswollen for three days after I sprained my ankle despite icing and elevating it, and then I noticed an area of my shin on the affected leg that was warm to the touch.)

I'm supposed to still be in the immortal zone, aren't I? I'm only 45! I have a six-year old!

Sheesh, what would happen to Jeb and Phoebe if I kicked? What would happen to Room Fu? Would Jeb know what to do with my business?
After being asked by five—count 'em, five—hospital staff members if I have a living will, it occurs to me that I need one for my company as well. Should Jeb need to sell Room Fu, I'd like to make it easy for him to gain access to the information he would need to determine an accurate value for the business. If it's better for him or someone else to step in and keep things going so that my family can continue to share in the profits, step-by-step instructions on how I manage the business side of my company will make for an easier transition.

Beyond the typical life insurance policy, here are some things I'm planning to put into place this year to protect the best interests of my family and my business:

Bank Accounts: In the nearly nine years we've been married, my husband and I have never shared a bank account, preferring to keep our spending habits to ourselves. I know it may sound weird to a lot of you, but hey, we were in our mid-thirties and each had a death grip on some of our independent ways (still do). Grief and bureaucracy are a combination that could prevent my husband from quick access to my money, so we'll set up whatever signature cards the bank needs to have on file so he can withdraw cash and/or pay vendors.

Treasure Map: Does your partner know how to access your business financial data? If not, they won't be able to figure out which clients owe you money or determine how much your business is worth on the open market. I'm taking a moment to map out where the money is, including contact info for my bookkeeper and accountant, how to download unbilled timesheets, account information, and simple things I've always taken care of, like where our archived tax returns and mortgage paperwork are located. I know it would be helpful to add all of the username and password minutiae for my bank, website, mailing list, blog, and social media accounts, plus the key lock code for my phone, but I also want to keep that kind of information safe. Establishing a joint password that only the two of us can recall and using this as my main password to an encrypted desktop password keeper should do the trick.

Black Box: This is a good time to insure the safety of important documents in case of water and/or fire damage. I'll take original documents like my incorporation filing, and CDs I've burned with digital files I don't want to put on a cloud server and store them in a lockable fire safe box. Most everything can be replaced, but having these things on hand may save some aggravation.

Living Will for Business: It's not uncommon to discuss things like your preferences toward life support and funeral arrangements with your partner, but it's also important to discuss your wishes regarding your business in the case of a catastrophic event. Could your spouse, a family member, or a trusted employee step in and continue the company so that your family continues to profit from the business you've built? If not, do you want it to be sold to the highest bidder? This is a conversation I'd like to have with my husband now, to spare him some difficult decisions later.

Training Manual: You probably juggle a lot as a small business owner and take it for granted that you'll always be able to continue doing what you do. But what if you can't? If you pass along the business to your family, they'll need some sort of training manual to acquaint them with the daily workings of your company. While it's ridiculous to think that I can write a quick how-to that will turn my computer geek husband into an interior designer, what I can do is throw together some information about the routine tasks I perform to keep my business running. As an extension of my treasure map, I plan to include contact information for my employees, contractors I recommend, retailers and resources, as well as the website designer and publicist I've used in the past. Much of this is useful as a resource guide I've wanted to make available to my clients anyway, so this is a great impetus for assembling that information.

Slush Fund: It probably goes without saying that this is a reminder to follow the advice of Suze Orman, Clark Howard, Dave Ramsey and all of those other financial gurus out there. Paying myself first (via savings and an IRA) and paying off debt are great ways to simplify our lives in case of an emergency.

Train a Successor: I have an employee I trust implicitly to sub for me in most situations and she's saved my bacon multiple times over the past two years' worth of various injuries. If you want to take a vacation, or if you're accident-prone like me, having someone who can step in and keep things running smoothly is a security blanket you can't afford to brush off. I don't have to go on Undercover Boss to know that anything I can do to support Claire's education and training benefits both of us. I resolve to be more proactive in that regard this year.

In the same way that carrying an umbrella assures blue skies, these efforts will create a fiscal umbrella where my business is concerned. If you're an interior designer with your own small design business, you may want to consider implementing a few of these ideas yourself.

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Robin Callan is the founder of Room Fu, a Best of Austin award-winning interior design firm and long-time defender of affordable design. Her blog, Fu for Thought, features steals and deals, design-related musings, and interviews with celebrity designers.