Snowtree
Get the POA done at once! Before his scan next week if you can, and certainly before you get the results. If your dad is still mentally capable of understanding it, get a solicitor to draw it up. A small local solicitor should be ideal. It is only a four-page document. You just need to find witnesses to the signatures.
You need to tell him that you are getting him to sign to say that if he becomes incapable of managing his affairs you will be able to do it for him. Don't mention "taking over" or anything like that. I believe there are new types of POA available, including something called a Lifetime (or Living?) POA, I can't advise cos we did ours a couple of years ago. The EPA might have a different title now. It doesn't matter that he has dementia as long as it doesn't prevent him from understanding what he is signing for. You might need to ask the doctor to certify that he understands.
Then you will be able to sort out the business. If you only have an EPA you will only be able to take over financial decisions. If you have one of the new types you will be able to take business decisions which might not be financial, e.g. to take on a new customer or deal with a new supplier. But the constitution of his company might have its own rules as well (probably not!). Sorry, don't take this as expert help, merely personal advice.
I also believe that the new POAs don't take away control from the person as the old ones did. I am not sure, but the old ones meant that once registered the person could not be involved in their affairs at all, but I believe this has changed. Maybe somebody on this forum can advise on that better than me.
The NEXT thing you must do, for his self-esteem and for your peace of mind, is to complain formally about the treatment he has received after his knee op. I would be more worried and angry about that than anything at all. I've never had a good relationship with my mum, but I would kill (not literally I hope!) anybody who said anything against her or made her feel uncomfortable. NOBODY would get away with scoffing at my mother. Apart from Alzheimers, she has never been the brightest in the bunch, but if anyone other than me ever intimated so, I would be down on them like a ton of bricks.
Contact the PALS people at the hospital your dad had is Op at. They will advise.
Good luck with it all, and keep us informed of how things go.
Much love
Margaret