Losing a Key person

Losing a key person can affect a company in at least the following ways

• Loss of focus
• Loss of time from morale adjustment
• Loss of money from morale adjustment
• Loss of time and money completing administrative adjustment
• Loss of time training replacement
• Loss of time finding replacement
• Loss of money training replacement
• Loss of money due to a lesser earning power of a replacement (marginal, over time)
• Loss of money on taxes of new key person
• Loss of money exercising stock options and buy-backs for decedent's family
• Loss of credibility from lenders
• Loss of market share to competitions

When you think about the loss of someone irreplaceable, consider the above problems that can all be covered from your present income instead of liquidated principal if that key person shouldn't show to work tomorrow. Will all of these costs sink your business? Would you rather pay for them out of pocket in full overnight or would you want to pay over years and for pennies on the dollar?