Key Management
The “Key Man”
Every company has at least one person that is key to the company’s ongoing operations. Definitely more of a consideration in a smaller business than a large corporation, it is probably the person that keeps the business rolling and without whom key aspects of the business might grind to a halt, or be severely impeded.
It might be you.
While it is typical to expect that business will keep rolling along with the same people in charge and making sure things happen, reality tends to include the unexpected.
And the unexpected can either add or detract from the value of your aviation business.
Just a Little Planning
The unexpected can have either a positive or a negative effect on the value of your aviation business. If you have planned ahead for the unexpected-whether it is temporary or permanent-the worst can be avoided or at least alleviated. Having a back-up plan for how the responsibilities of key positions in the company can be handled if the unexpected happens is the first part of the plan.
The second part of the plan is key man insurance. Key man insurance is payable to the company and is specifically designed to provide funding to cover the additional expenses that can incur if the “key man” unexpectedly dies.
- Recruiting and retaining a replacement person
- Paying for overtime incurred by staff that might need to work extra hours to ensure that things keep flowing smoothly
- Paying off debts
- Or to cover any other expenses that might arise.
Key man insurance provides an extra layer of security to the banker considering extending a line of credit to your business, or a potential investor or business partner. It means the business can weather the loss of that key person and value can be maintained in the business.
