Getting ready for an interim appointment
Look for a number of interim providers, ask for recommendations and speak to interims you already admire – either in your sector or elsewhere.
Establish and build relationships with good quality interim providers and get a feel for what they can offer. The provider needs to understand your business. Once they do you will have the confidence they can find you the interim you need.
Ensure you have a current company policy and procedure for emergency staffing. It is always good to have a contingency plan. You want to be able to minimise damage if you lose a key employee.
Does your company have sufficient insurance, for example key-man insurance? If a key person leaves or is ill such insurance can cover the costs of hiring an interim manager. So it might be worth your while to get this insurance in place.
Now you’ve identified a need get started
An interim manager with up-to-date expertise and good communication skills can help you navigate a stormy period, or introduce changes more smoothly and rapidly than your existing team could do alone.
Before your interim manager leaves, engage in a formal process for transfer of knowledge. Perhaps the person can run some training sessions before departing. You want to make the most of your investment and benefit both short and long-term.
Get this right and hiring an interim manager could be the best business decision you make this year!
As much as you try to share skills, knowledge and information in your company, you probably have some people who are key to your business’ success.
It might be a Director or the CEO, whose vision made it a success in the first place. It might be your star salesperson, or someone in your IT area who knows the system backwards. It could even be someone who doesn’t create any revenue but does a fantastic job of boosting your company’s reputation or perhaps running your admin and back office systems.
Now, what would happen if you suddenly lost one of those key people?
And if you think it would never happen because they love your business so much, think again. Sure they may not resign. But they might decide to start a family and want to leave the workforce. Or what if they suffered a major illness or injury, or even passed away?
In addition to the obvious issue of lost productivity and their contribution to the business, you also have to spend time (and money) to recruit and train a replacement. And losing such a key person in your company could even affect your reputation and credit standing.
Could your business survive until you find someone who can fill their shoes?
Key Person Insurance can help you get back on your feet
Key Person Insurance can give you the financial support you need while you’re getting back on your feet. It can offset both your costs (e.g. hiring temporary help or recruiting and training a replacement) and your losses (e.g. not being able to do as much business until they finish their training).
It can also help with:
And you can take out a policy (which is usually tax-deductible) on anyone you feel is a key person in your company.
How much should I insure them for?
The amount you specify will depend on the size of your company and the person you’re insuring.
The amount can be calculated in a few ways, including:
Protecting your partners (and their partners) with a Buy/Sell agreement
What if the key person happens to be your partner in the company? Yes, the Key Person Insurance may well cover the finances involved in buying your partner’s shares from their family. But do you really want to be negotiating a deal at such an emotionally trying time?
Having a Buy/Sell Agreement in place can save everyone from a lot of anguish. It’s a legally binding agreement that determines what will happen to each stakeholder’s shares if they suffer a major illness or injury, or pass away.
It has two parts:
How do I arrange Key Person Insurance?
Before you take out Key Person Insurance you should first speak with your business advisor about the overall approach and then get into the details with an insurance broker. You need to make sure you get the cover you need without paying for the cover you don’t need. We can guide you in this area.
After all, it may well be the key to your business’ survival.
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