Key-person risk is the #1 killer of Australian small businesses. Today, we’ll run you through what it is and the strategies you can use to reduce it.
For many business owners, you are the key person in your business, and there’s a tremendous amount of risk on the line if something happens to you.
The biggest killer of small businesses is the fact that the business owner is often a bottleneck. Think about the areas in your business where, if you weren’t there, would come to a grinding halt. There are a few strategies that you can use to give you more flexibility, and in the event of the unforeseen, not have your pride and joy come tumbling down.
Strategy #1: Outsource your low-value tasks
As the key person in your business, you’re probably doing everything yourself, but if something happens to you, where does that leave the business? Consider all the tasks that you’re currently completing yourself. What are the low-value tasks that you can give to someone else? Doing this lets you focus on the high-value tasks that allow you to progress your business.
Strategy #2: Work on a transition from technician to manager
The high-value tasks in your business are typically based around being a ‘technician,’ the person that is delivering value to your customers or clients. If something happens to you or you aren’t able to be involved in the business, for example, you go on holidays or you get really ill, then all of that comes to a grinding halt, and your business stops.
To be an effective entrepreneur, you have to create a plan that will enable you to go from a ‘technician’ to being a ‘manager’ that oversees other technicians. Remember, even if you can do things at 100% capacity with 100% success, two people working at 70% capacity, still works out better than doing it on your own.
Strategy #3: Write down your intellectual property
Get all the knowledge that you have in your head into technology that allows you to record videos, write out processes, or have a central hub/intranet. This means that other people have access to that information and can pick up where you left off. One of the reasons that key people are the most significant risk in a business is that nobody else knows what you know. By getting this information written down, you’ll not only be able to document it and have it accessible, which reduces risk, but you’ll also be able to improve on them and have them accessible in the event of the unforeseen.
Stop being the key person in your business and start working towards being a manager, a leader or an entrepreneur in your business and start pushing your business forward.
Grow your business with more strategies and tips like this! Join us at Your Lifestyle Business Community (https://www.facebook.com/groups/thewealthmentorcommunity/)! We’ll see you there.
If you would like to meet with Sam Panetta to discuss further please contact him via the details below.
Suite 114/117 Old Pittwater Rd Brookvale NSW 2100
M: 0422 525 313
P: 1300 763 894