When we chat with our clients, we often find a Key Person isn’t always the CEO, the top sales person or the ‘bread winner’. It can be a wide range of staff. Sometimes a technical member, an example being a software developer who has coded the company’s software product, line by line.
We also often uncover that the business hasn’t fully thought through their contingency plan.
Typical plans we have seen cover fail-safes such as IT disaster recovery strategies, back up plans, duplicate machinery. But often there’s a gap when it comes to thinking about a key person not being in the business for a period of time, or worse.
As your business grows, your client list may expand, you may offer an increased range of products and services, this question of “who is key to the business” should also be on your mind.What would the consequences be if a director or employee with specialist skills died or became seriously ill?
What would the consequences be if a director or employee with specialist skills died or became seriously ill?
I know, I get it. This isn’t something the mind naturally considers. But trust me, take a piece of paper and begin by asking yourself these questions; –
- Who is responsible for the following key business areas?
- Production of goods or services
- Financial control
- Sales and Marketing
- What impact would their loss have on the business financially?
- Could anyone else in the business do their work?
- Would the business need to train and recruit a replacement?
- Does the business have the money needed to find a replacement?
- If a key person was diagnosed with a critical illness (such as cancer) and needed time off work for treatment and to recover, could the business afford to pay their salary and a replacement’s salary?
- Would you be in danger of losing a contract or important contacts if you lost a key person?
If your business thinks about contingency plans but doesn’t have this kind of cover in mind, or doesn’t know where to start, feel free to reach out and ask me what’s available.
It’s one of those situations where you can say to yourself “It’s unlikely”, “I’ll look at this after the financial year ends”, “Let’s get through this sticky period”.
Unfortunately, I’ve got way too many stories when “later” has been too late.
Industry research has found that one third of businesses have not considered this protection and the main reason why is… “it’s too complicated” and “I don’t have a trusted advisor to help me”
Ensuring you understand the impact, instils confidence in your staff, customers and helps you sleep better at night, due to positive action being taken and financial obligations being met.
The right protection gives our clients breathing space to make the right decisions, not rushed ones.
There are various options to choose from and I’m here to give you my help.