What and who is your key?
what is the key to your business success? Some may attribute to their great product, some will say timing as they are able to take advantage of the market condition to enter the market. Then there are others that will give credit to the people, there will be this person who is epitome of the company itself, for example...
Steve Job is inarguably the key person of Apple, the man who pushed the company to come out with products that we as consumers didn’t know we needed, such as iPod, iPhone etc…
He was a man of vision that brought the company to where it is today, and how did his passing affected the company? First thing that we notice is the shares price dropping immediately after, some also feel that the company is no longer the innovator that Apple was once known for.
"you will need time and money to headhunt and find the right person to take over the keyman as well."
For other business, loss of keyman may lead to loss in sales, loss of credit as suppliers can demand for payment immediately though they may had extended 60 days of credit term and other creditors. Some customers may even go to competitors as they may relate the loss of keyman to the loss of service guarantee and not to forget, you will need time and money to headhunt and find the right person to take over the keyman as well. What if it was your company? will it be able to withstand the loss of a keyman? To help you better identify a keyman here some are points:
i) They are responsible for company growth
ii) Generate revenue for the company, usually a big part of their revenue
iii) Not easily replaceble
iv) They have specialized skill or function
They don’t have to fulfil all the criteria above but you get the idea. Most of the time to withstand the loss of a keyman, some company has in place some form of Business Continuity plan. It includes, 1. Having a standard SOP in a manner other employee can access, 2. Regular review or meeting with employees to getting them ready for management role as well. 3. Getting an insurance to payout upon the death of Keyman to counter the drop in cashflow.
With that being said, there are many ways and method to structure a business continuity plan and the process and solutions is as unique as your business itself. At the end of the day, if you have a key to your business and you want to safeguard the key, you can drop us a message via rayvern.forlife@gmail.com and +65 83823194 for casual conversation.
Rayvern
Your Business Risk Consultant
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