6/5/2021 Tip: Why KMI Is So Important To Your Business | Growthink

6/5/2021 Tip: Why KMI Is So Important To Your Business

Today’s Quote

“The price of success is hard work, dedication to the job at hand, and the determination that whether we win or lose, we have applied the best of ourselves to the task at hand.”
~Vince Lombardi

 

Today’s Tip

Did you know that venture capital firms nearly always require the companies they fund to get key man insurance (KMI)?

Well, understanding the rationale behind this fact should give you insight into improving your business operations and structure.

To begin, Key Man Insurance or KMI is a life insurance policy covering a business owner, president or a key employee. The business is the beneficiary under the policy.

The fact that most venture capital firms require KMI explicitly shows that venture capital firms provide funding to PEOPLE, not firms or ideas. It is the people who are able to execute on the ideas. Remember that a good person with a mediocre idea is often much more successful than a poor person with a great idea.

What this does NOT mean is that you should rush out to purchase key man insurance if you are seeking venture capital. What it does mean is that you need to make sure that you have a management team that is worthy of KMI. A team that is so capable of achieving success that investors are actually frightened that their investment would be in jeopardy if something happened to them.

What it also means, and this applies even if you are not seeking venture capital, is that you should create systems to minimize the business risk of something happening to a key employee.

These systems can include:

  • Training manuals that document key tasks performed by key personnel, so that someone else could take over their job requirements in the event that they were out of the office temporarily or long-term
  • A hiring plan that allows you to efficiently recruit and train new personnel
  • Constantly networking and telling people the exciting aspects of your business so that there is a pent-up demand to work at your company

You and your management team are the lifeblood of your business. You always need to be thinking about how to improve, protect and grow your team, as this will have the greatest impact on the long-term success, or lack thereof, of your business.

 

Today’s Resource

How to Build a $10 Million+ Company

What’s the difference between successful multi-millionaire entrepreneurs and the typical small business owner just struggling to get by?

Well, there are a LOT of differences, actually…

But I’ve summarized the main differences on this page:

How to Build a $10 Million+ Company <—- 

The really interesting part is that you don’t have to work yourself to death to grow a wildly successful, eight-figure business…

In fact, when you follow this formula, you can make much more by working less…

How to Build a $10 Million+ Company <—- 

 

Trivia

Today’s Question: Many online retailers are adapting their sites to become friendlier to what seemingly ubiquitous electronic device?

Previous Question: What company’s product is still most commonly ordered by making a quick phone call?

Answer: Pizza Hut.

But…Pizza Hut realized it could use its website to help people narrow down what they want before getting on the phone, and/or to order online.  

Lesson: to boost your business find a way to use your website in combination with your other customer contact points like the telephone or walk-in customers. 

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