Key-person risk is the #1 killer of Australian small businesses. In this article, 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. 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. 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.’
You are 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 then all of that comes to a grinding halt, and your business stops.
To be an effective entrepreneur, you have to be 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 be 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! We’ll see you there.