What is a Key Person?
A Key Person is someone with a proven skill and/or critical knowledge behind that skill, in a particular area of a business who is relied on heavily.
This person is seen as the ‘go to’ person but doesn’t necessarily need to be in a leadership position.
In a lot of cases when owners start their small business they become the key person for every aspect of the business by default, often completing their bookkeeping and other tasks at night and on the weekend.
A key person can also be a member of your team whom you rely on heavily to take care of certain parts of your business, whose skills/knowledge is not known or known well by others in your team.
The risks of relying heavily on a Key Person
There is a significant risk to operations, especially in small to medium businesses, where a key person is absent for unplanned reasons or worse, unexpectedly leaves the business.
The Main Risks are significant and costly, including:
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- Loss of profit due to delays in operations or prolonged outages
- Impact on the morale among other employees, especially if work is distributed to others.
- Slump in productivity and backlogs in tasks
- The reputation of the business can be damaged from operational challenges
- Time taken to recruit, replace and train a suitable replacement
If the key person’s role is finance related, the risks are many and should be avoided at all costs.
Minimising key person risk is increasingly being recognised as a standard management practice.
How can Beam Bookkeeping help in this area?
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- Identifying bookkeeping tasks that would disrupt your customers/clients, your team members, or your compliance obligations if your key person was no longer at the reigns.
- Capturing the essential knowledge of the key person and document procedures/training material from it.
- Act as an extension of your team by outsourcing the role at risk to our Team.
What are the benefits of outsourcing to Beam?
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- Peace of mind that no matter what comes up, your work will get done in a regular and timely fashion. All bases are covered.
- Although you would be allocated your own specific Account Manager in our team, the role is fully documented in procedures capable of being followed by others in the team.
- Recruitment, training, supervision and equipment costs are eliminated.
- Acces to a team with a wide range of skills and knowledge, minimising exposure to skills gaps that may exist in your team.
- Elimination of bottlenecks and backlogs in work.
- You’ll find yourself with more time to focus on why you went into business in the first place and areas that can improve your bottom line.
- A reduction in your stress levels and those of your team.
If you are your business’s Key Person or you feel your business is exposed to Key Person Risk, it’s time you talked to Beam.
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