The Game with Alex Hormozi Critical Advice for Businesses Making Less Than $10M | Ep 824
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Jan 13, 2025 Discover the critical impact of key man risk on small businesses and how to mitigate it through effective redundancy strategies. Learn about the strategic shift from simply owning a job to managing assets, and the importance of diversifying customer acquisition. The podcast dives deep into navigating customer risk and the need for reliable internal resources. It also provides essential advice on vendor dependency, emphasizing the importance of clear agreements and partnerships for resilience.
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Key Man Risk
- Key man risk exists when a single person is vital to a business's operations.
- This risk increases if the key person is the owner or someone likely to leave after a sale.
Mitigating Key Man Risk
- Create an R&D department to systematize innovation and reduce reliance on a single person.
- Document the innovation process, dedicate resources, test solutions, and hand off winners.
Business vs. Job
- If you are the key man, your business is a job, not an asset.
- Transferring valuable skills is crucial for building a sellable and scalable company.
