What is your most important asset?
Many people in small business have an amazing machine that generates a consistent $100,000 to $200,000 income each year. The machine would be very hard to replace quickly, and its failure causes all sorts of flow-on effects in the business.
We'd therefore recommend a robust maintenance plan for the machine, and a back-up plan to cover the machine's revenue.
You are the machine
As you'd probably guess, you are the machine in question. If something happens to you, your business will suffer an immediate set-back, turnover will decrease, work won't get done, and pressures will rise.
In line with my risk management philosophy, there are multiple ways and trade-offs to consider in protecting this money-making machine.
- Documented systems and processes, so you can hire temporary staff.
- Mutual aid agreements with competitors, so one will step in to help another in catastrophe.
- Legal contracts and agreements with customers and suppliers to reduce pressure in a force majeure event.
- Key man or income protection insurance to cover income during illness or major accident.
Machines do break down
There's no right or wrong answer here - I'd probably suggest a combination of all four methods at once. But the important thing is to consider these risks ahead of time, so you're prepared for the eventual wear-and-tear or breakdown.
Get expert advice
Using decades of experience in insurance and risk management, I can help protect your business and the human being machine against financial loss. The answer isn't always insurance - sometimes the best insurance is the one you didn't need to buy because you planned ahead and addressed the risk another way.