The Game with Alex Hormozi Critical Advice for Businesses Making Less Than $10M | Ep 824
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Jan 13, 2025 Discover the hidden dangers of key man risk and how to build operational redundancy to safeguard your business. Learn effective delegation strategies to transform from an owner to an asset holder for sustainable growth. Dive into the importance of diversifying customer acquisition to mitigate risks tied to single clients. Explore essential strategies to secure vendor relationships and maintain resilience in your operations. Strategies shared are aimed at helping businesses thrive even in challenging environments.
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Key Man Risk
- Key man risk occurs when a single person is vital to a business's operations.
- This risk increases if that key person is the owner or someone who would leave after a sale.
Mitigating Key Man Risk in Product Development
- Create an R&D department to systematize innovation.
- Document the innovation process, dedicate resources, test solutions, and hand off winners.
Key Man Risk as a Job
- If you have key man risk, you don’t own an asset, you have a high-paying job.
- Transfer valuable skills to others to gain leverage and focus on higher-value tasks.