Big Stick

Small businesses help keep our country going. But a small business needs help to keep going after the loss of someone vital to the company. There are options available you need to know about.

KEY PERSON IS ANYONE WHO IS IMPORTANT

In small to medium size businesses, the key person may be the business owner, a top sales rep or the person who does the financing. What would happen to that company if one of these key people were to suddenly die? There may be a rough period of transition until a replacement is found. If the owner was the one to die, that could mean the resulting death of the company. Losing the top sales person may mean losing some of those accounts that kept the business running.

YOU NEED LIFE INSURANCE ON THE KEY PERSON

The key person is someone who is vital to the company; someone who cannot be easily replaced and whose knowledge is key to the company. By not recognizing the affect the death of this person may have on the organization, a business may be setting itself up for failure. A few simple steps can be taken that will help ensure the business will be prepared for the unexpected.

KEY PERSON LIFE INSURANCE FOR THE COMPANY

Key person life insurance can do several things for a company. It can give them the means to establish a business continuation plan. It can provide the economic means to find a replacement and give them the training needed to fulfill the duties of the person that was lost.

In situations where the death of the owner otherwise means the death of the company, key person life insurance can be used to pay existing debt and allow for an orderly transition to take place.

IS KEY PERSON LIFE INSURANCE IMPORTANT FOR YOU?

The need for key person life insurance depends on your circumstances; maybe you haven’t thought about the need or even considered it. If your business relies on you or key associates, you need to think about what exactly it is that you need to protect.

The very terms “software leasing” and “software financing” are confusing to many businesspeople. This is due to the fact that software is typically not seen as something that is purchased over time.

This view is shared by both end-users, and the developers of software. Companies who think nothing of financing a vehicle or a new computer system will stress over how they will pay for expensive new business software. And the producers of software see no need for offering a software leasing or a software financing option.

But times are changing.

Third party equipment finance companies – companies who offer small and medium size businesses equipment financing and working capital – have responded to a need for software financing and software leasing. Thus, they are starting to include software amongst the equipment they finance or lease. There is one big overriding reason for this shift:

The High Cost of Buying Software

The simple fact is this: Software can be very, very expensive. Oftentimes more expensive than the hardware that runs it.

Now, keep in mind that when we are talking about software in this way, we are generally talking about “vertical software”. Vertical software is software that is written for a specific, narrow industry (this can include industry-specific point-of-sale software, ERP systems, specialized databases, etc). It is not software that’s available on the shelf at your local office supply store (the software you see there, even the business programs and operating systems, are “horizontal software” – they can be used across a variety of industries, and are relatively affordable.)

A good, clear example of vertical software is an auto parts store – they use software that’s specifically written for the auto parts industry. Another example is your local jewelry retailer – they likely use a point-of-sale system specifically made for the jewelry industry.

To understand how software financing and software leasing can positively affect a business, it is important to understand the advantages of vertical software first.

For most businesses, Vertical Software usually means far more efficient business processes. In the case of an auto parts store, for example, the software will already anticipate the thousands of automobile makes and models. And will almost certainly be updated every year. The jewelry store’s software will differentiate the subtle differences between two diamonds by any number of categories. And so on.