Will your business die when you die or fall seriously ill?

If you grew up in a township, you too may have noticed that some township businesses thrive when the owner is well and alive. But as soon as the owner falls sick, the business also appears to fall sick and eventually, when the owner dies, the business dies too. I have seen this with township restaurants, supermarkets, butcheries, medical doctors’ surgeries, etc… The reality is, a business does NOT have to die when the owner dies. If you get proper guidance, you should be able to leave your business to your children or sell it off to interested people. Starting a business is no child’s play. There are times of endless hopelessness, fears, self – doubt, sleepless nights, exhaustion, tears and at times, we as entrepreneurs consider going back to a job a number of times. So if you are one of the lucky ones whose businesses end up successful, you want to make sure that you leave the business to your children or family if they are interested in it or alternatively, you package it and sell it to the next interested entrepreneur. The name, the physical buildings and location, the licences, the goodwill, the furniture & fittings, the employees, the customers, supplier contracts and relationships, etc… all form part of the value of your business and these can be evaluated, packaged and sold off to the next entrepreneur so that upon your illness or death, you / your family can then reap the benefits of your hard work that went into building the business.

So how can we make sure that our businesses do not die when we die? There are a number of instruments that are available to an entrepreneur but today I want to speak about just one of them i.e. about Key-Person- Insurance. Let me illustrate the value of Keyman Insurance by way of an example;

Suppose you are a lawyer and you are in a partnership with another lawyer so you jointly own a legal firm called Lawyers Inc. The success of Lawyers Inc is highly dependent on the health and wellbeing of the lawyers. If one of you falls sick, you cannot consult or represent your clients in court so the income drops. It is for this reason that you as owners are key to the success of the business so you can take keyman insurance. This is true of any other business because the success of most businesses depends upon its key people.

In a nutshell, the insurance is owned by the company to cover the financial losses that the company would incur in the event of death or disability of its most important people in the business. Lawyers Inc. pays the monthly premiums and the insurance proceeds would go to the company in the event of death or disability of one of the partners.

What will the insurance payout be used for?
Lawyers Inc would use the payout to recruit a new partner to replace the one that is sick or has died and to upskill the new partner to perform at the same level that the partners are currently performing at.

What other tools are available to ensure the continued success of a business?
· Estate planning
· Drafting of a Will
· Business assurance
· Partnership agreements
· Buy and sell agreements
· Financial Fitness Analysis

If you would like me to help you with any of the above, drop me an email at

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