As I’m creeping up in years, and the business grows, I keep coming back to this question. Do I need Keyman Insurance?
I have a sickness plan. I took it out over ten years ago and it’s with a company called CETA. The renewal comes every year. The money goes out of the account and I don’t even look at it.
I started the policy when I was worried about paying the mortgage, fifteen years ago but I think I’ve out grown it. This leads me to ask, do I need Keyman Insurance?
I’m not a financial advisor, I have no qualifications in this area. So don’t do anything without talking to a professional
However, I am a real person, in a real business that has real worries about what happens if I was taken out of the business. So now it’s time to look at the big picture.
Simon my employee working away
My employee is a good guy. he runs the show when I’m away and does a good job.
This arrangement works well, however, long-term, I realise I need a plan. Keyman insurance may well be part of this plan.
What is Keyman Insurance?
According to some internet reasearch, (and we all know how that can be) forty six percent of businesses stop trading if the key person in the business dies, or becomes terminally ill. That’s not good.
So Keyman insurance pays out a lump sum to the business upon death of the insured person, and this is supposed to comfort the blow of losing the most important person in the business. But does this help me?
If I’m taken out of the equation, the business would be sold and my wife would get a payout for what it’s worth.
It’s never been our plan for her to keep running it, so is there any benefit to a cash injection into the business once I’ve gone?
I’ll be researching this over the next few week. I have a meeting with a professional and will report back.
I know I need something more to help Caron and the kids, but despite the hype, I’m not sure that this is it. The main thing is deciding what is right for you. There will be lots of people, trying to sell you lots of stuff. Do you really need it?
Look out for updates over the coming weeks and months and
Thanks for reading
I watched the paramedic scan the room. He knew the poor gent had died many hours before, so instead of saving a life. Now he had to step into his other role of breaking bad news. But before he could do that, he needed to ask this poor gent, who are you?
Days earlier, I’d visited this house to replace lost car keys. The gent was very old and looked poorly, but he was up and about with the aid of a stick and opened the door to me. His breathing was heavy, but when I asked if he was ok, he told me ’it’s just me chest laddie, been like it years’.
Who are you?
There’d been a problem ordering the key. The car dealers needed ID before I could order the key for him and explained the dealer needed proof of ‘Who are you and is it your car’.
‘No problem’, as he struggled to stand and sort through his mountain of documents.
Eventually I left him, photos taken, and I assured him I’d be back the next day with a key. ‘No problem laddie, I’m not going anywhere’.
Thursday came and there was a problem getting the key. One of the documents I’d photographed was too old, so I dropped back in and knocked the door, but this time there was no reply. It was midmorning, maybe he was having a lie-in. Looking through the window, he gestured to me from the sofa, come on in. He was on the sofa, his breathing heavier.
‘I’m back but no key yet, I need a newer document, sorry.’
‘No problem laddie just find it yourself, in the kitchen dresser. ‘
I knew where they were from the previous day. Searching years of bills and bank statements, I finally found something relevant.
‘I’ll be back tomorrow with your keys. Are you sure you’re ok? ‘
The television was loud, the fire was on full and although the winter day was chilly, the living room was an oven.
‘I’m ok laddie, do you need money, there’s some in the dresser. ‘
There certainly was, there were hundreds in notes, and as a self-employed person working with the elderly, this position of trust we’ll discuss in another blog post.’
‘No money today, I’ll be back tomorrow’
‘No bother, I’m not going anywhere’
The ‘Who are You?’ Day
A cold, dark gloomy Friday came, and time was running away with me, but I had a key and I’d promised the gent I’d be back. So late afternoon, at dusk, I arrived at a house in darkness. I could see the television on, so to save him being disturbed twice, I went into the open garage, programmed the key, and got him mobile again. All that was left, was to give him the key, but when I knocked on the door, there was no reply.
I peered through the glass, deciding whether to come back the next day, but then saw him laid in the darkness and feared the worse. I went in to try and help him, and I’ll spare the details, but this poor gent had fallen and died. Ten minutes earlier I was programming my last car of the week, now an ambulance screamed to a halt and suddenly I was part of his last days.
Back in the room
So now were back in the living room and the paramedic is Sherlock Holmes, piecing together clues, searching for address books, bills, recent mail. All the while asking, ok, so who are you? He’s calling people asking for information, tracking down who he’s allowed to give the news to. All this time, he should be out saving lives, but instead he’s playing detective. I’m struck by how wrong this seems, how difficult it’s all proving.
Then the police arrive and they’re asking me now, who are you? what are you doing here? Finally, once my statements made, I’m free to go. Then the paramedics stand down, they’ve finally found a relative, but it hasn’t been easy.
So, this has ran around in my head for a while, and I realised how much easier it would’ve been if there’d been a ‘break glass in emergency’ book or card. It just needed a few details, who he was, who to call and that would have made everything so simple.
The ’Bad News Book’
So, I’ve created the ’Bad News Book’, a simple, helpful document that tells everyone what to do in a disaster. How to break the bad news, who to tell. Then how life carries on in the short term, and what happens to the business afterwards. This week is my first stage and it’s breaking the bad news.
The van now has a sticker on the glovebox. Imagine a crash, a heart attack, a stroke, and a paramedic finding myself or Simon. How much easier would it be, if they could open the glovebox and have all those questions answered? So, this is our weeks project. The sticker tells them to open the glovebox and Who are you? ID card including a photo, name, address, who to call. This way the paramedic or police doesn’t dance around on the phone. No more not saying the wrong thing to the wrong people.
It’s my first step, and already I feel better that if something should happen, some of the guesswork is taken care of. It’s the beginning of the Bad News Book that deals with the worst possible outcome, so that when its finished I can get on with the rest of my days without worry.
Next week, who’s going to sort everything out. Well talk about that.
I’m biding my time, stuck behind a slow-moving tractor coming back from a job out of the city. It’s always like this once the farmers start working the fields hard in Lincolnshire, so I’ve got used to it. I’m moving at a steady 45-50 speed on the coast road so there’s no rush anywhere. Then something bizarre happens that scares me to death and gets me thinking about disaster management.
In my mirrors I spot an ambulance. It’s weaving its way through the traffic, back to Lincoln. After a while it’s directly behind me and is clearly in a hurry. We’re on a slow, sweeping left-hand bend and it’s plain to me that the ambulance driver can’t see what’s past me, and I have nowhere to pull over.
Then, unbelievably, it pulls out around me to overtake. There’s a whole procession coming the other way the driver couldn’t have seen. Into the mix is a traffic island, and a slip road with cars waiting to pull out. I’m waiting for the impact that I’m about to witness and wondering how I’ll avoid it all.
The lead, on-coming car, brakes hard to avoid the crash, and who knows what’s happening in the back of the ambulance. They’re oblivious to what’s about to happen in the outside world, as they battle to save a life, unaware they’re going to need their own treatment soon.
I’m shocked because the picture I’m seeing doesn’t make sense. It’s an ambulance, they’re supposed to be helping. It’s like seeing a fire engine ablaze, or a foul-mouthed vicar.
Unbelievably, the ambulance gets past me and the tractor, and miss the oncoming traffic and continues its life-saving journey. How would I have acted as the oncoming car? What would have happened at home, had there been an impact because I was in the mix? I’m close enough to the action and know I’ve dodged a bullet today. Immediately I’m thinking about disaster management. How would this have changed all our lives forever and practically, what happens next after a crash like this?
Time for disaster management
I drive a lot, I know this sort of thing is rare, and maybe it only felt like this too me. Maybe the ambulance driver knew what was happening, it was over in a flash. However, as a business owner, it got me thinking again about life after near-death. In the past I’ve worried alot about how things would unfold, should anything cause me to be out of the picture. I’d go through weeks of worry, but then months of ignorant bliss. As a young under-fifty-year-old, I should be confident of another ten years fit and healthy, but then something like this happens. Or, maybe a famous sub-fifty year old star dies suddenly, and it feels like those we grew up with have gone too early and were vulnerable again. After my recent ambulance near miss, I’ve started on my most ambitious disaster planning exercise yet.
Tim Ferris, the writer of the hugely successful ‘Four Hour’ series of books, talks about exploring the very worst that can happen, he calls it ‘Fear setting’. It involves writing our worst fears down, with a clear set of actions on how to manage the events. These actions would be either for myself, if I was still conscious, or my family if I wasn’t. So, over the next few weeks and months I’m going to take a weekly look at how I put a plan in place that would look everything, should anything happen.
Time to make a plan
This seems quite depressing, but, now that I’m finally serious about it, I feel so much more alive and prepared. There must be hundreds and thousands of business owners who have this similar fear. A life changing event can easily screw everything up, especially if our business relies on us for it to work.
So welcome to my journey for the next few months. From allowing access to bank accounts, to life insurance and practically, how to pay Simon and suppliers. Then long-term, what happens to the business once I’ve gone? At the end of the journey we’ll have a ‘Bad News Book’. It’s a book that we all hope isn’t opened for a very long time.
Do you have one of these books?
Do you have a disaster management plan?
Here we go.
This week I planned Friday off. It’s not easy when you own the business, but I had a train to catch with family, to see my daughter in London. It’s a big deal and so instead of doing half a day and stressing about making the train, I booked my day off.
But I still had to nip in to work to do the banking, and do a handover to Simon my employee. Five mins max. Then I get my day off
- But phone rang
- Then a walk-in, a delivery, another walk-in and a problem.
- The car key won’t programme.
- The computer password is locked.
- The parts are wrong.
- Another walk-in!
This is my day off!
Then a customer who knows my wife (so I should give them some special attention) arrives (even though I’m not at work). So now I can’t dash off, and I’m struggling because the car is faulty, and the key won’t programme. This should be a simple job.
Another phone call.
Time is ticking and I can’t sort this flipping key out.
Eventually my calm exterior must be cracking when I’m asked ‘you struggling?’
‘Well I’m not supposed to be here, it’s my day off..’maybe unprofessional but there, I said it.
‘If it were my day off, I’d just switch the phone off mate’….
Great advice (bearing in mind I’m trying to actually fix your car)
Did I think that, or say it aloud?
It’s not easy when you’re the boss. It’s hard to say no, when, you want it all to go right. Sometimes the pull from home and customers feels like it will split me in two. How much easier just to have a clone of me!
So I deal with the walk-ins
and I deal with problems
and then a couple of hours later it’s all quiet.
I know Simon can cope
The backlog is clear.
So now I can go home now.
After all, this is my day off.
Solving problems is good business. This might be an emergency (Help…I put a nail through a pipe and water is pouring through roof). Or it’s normally a basic, routine problem, such as a car key battery needs changing. Just this week, our plumber problem was solved, and the water was fixed, let me explain.
We’ve been in our house for ten years, and it’s seen its fair share of plumbers. There was Dave, the family friend. I’ll do it cheap (but not show up). Then there was Bill, who came to sort out the problem Dave had caused. He insisted in showing us every part of the toilet system, very much into his work.Next please.
Then to sort this plumber problem came John. We did some locks for him, so it only seemed fair to offer him our next job that needed fixing. Well, it was still the job that Dave did at the very beginning, still not right and he told us all about it…
‘Blimey mate, who’s been in here? This should be a five- minute job.They done it all wrong. This isn’t meant to be here, it’s supposed to go there. Left handed, it should be right handed. What size pipe? No-one uses that for this job.
It went on and on. Like we’d failed to vet Dave, interview him, to check on his plumbing skills first, silly us. By the time he left the toilet flushed, but we still had a plumber problem. John had made us feel thoroughly stupid.
So, it’s no wonder that, when our hot water started to play up, I put off getting it fixed. Just the thought of another plumber in the house filled me with dread. This is a problem.
We need a another plumber.
Fortunately, my website man is part of a networking group and they’re always after tradesmen that leave a good impression, so here goes. I booked someone from his company to come out.
For a start, this smart, young man turned up, on time. Firstly, he listened to the problem, asked a few simple questions, and then just got on. He didn’t moan about the pipework, or the cowboy who’d been there before him.
He didn’t even scratch his backside, moan about the last job and how much work he had on.
‘You’re lucky to get me here mate’ wasn’t spoken.
He just fixed it, drunk his tea quick and was gone. It wouldn’t have mattered on the price, I was so impressed that he’s now in my phonebook.
This is what we should all strive for, this is the impression we all need to leave when people call us to solve their problem.
So impressed, I can leak water with confidence. We no longer have a plumber problem.
When we’re at work, we shouldn’t be scared, it’s not a healthy way to earn a living. However yesterday, for twenty minutes, my pounding heart was racing away. I was fearful of what was happening.
It goes back to my first ever, key programming job, fourteen years ago. I had only just recieved the shiney computer, cutting edge technology that was going to take my business forward. I had staked my whole new career on this hand held programmer but at first try, I’d had a problem.
The van I plugged into, on that fateful day in 2005, was doomed before I even plugged into it. I didn’t know that as it ran perfectly, being just six years old. It had a cutting edge fly-by-wire technology fitted, that Ford had tried out a few years earlier. Well ahead of its time, it has a serious bug which caused a problem when anyone programmed a new key. Even the Ford dealers had problems programming them.
Once I’d attempted to programme that van, all those years ago, it was dead, on the customers drive. My heart was pounding as the customer watched me struggle. It must have been obvious I didn’t have a clue what was going on. Technical help drove 100 miles immediately to help me, but it was all for nothing, the van was dead.
Two weeks, much stress, and £800 later, the van ran again, but I was never the same. For many years, I would sweat about programming keys, not the start you want in a new career.
So yesterday I took a trip back to the bad old days as I programmed a new vehicle, with new cutting edge software (that cost us £2500). The money isn’t important, it’s part of what we do. However, the only way to programme the van is to put into a disabled state, change some settings and then reload its operating system. The whole van is fly-by-wire now, so for twenty minutes, with my pounding heart and my customer nearby, I watched the progress bar move along, bit by bit. All I could think about was that Ford Transit, all those years ago.
It was fine, it worked perfectly and we added a new vehicle to the long list that we can programme. Now relieved and elated, because the unprogrammable van, that we kept turning down, is now one we can say yes to (even if it is with some trepidation).
I’m hoping my pounding heart will slow down abit next time. Business is full of firsts, the first time you pick up the phone, gain a special new customer, come across a new problem and deal with that business crisis. As long as we plan for them, expect them and accept we can’t change them, they help us grow. In fact if were not feeling this sometimes, we’re not growing at all.