Wednesday, October 21, 2020
Subscribe to Small Business Monthly
Small Business Monthly on Facebook Small Business Monthly on Twitter Small Business Monthly on LinkedIn

SBM Articles

 Search

How Do You Plan For The Unexpected In Business

by Dave Driscoll
Remember when we naively believed that “life as usual” would more or less continue indefinitely? That innocence has evaporated as the year 2020 has reminded us not to take even the most basic things for granted. So, how are you supposed to plan for situations that you never would have imagined as a business owner?
A well-thought-out crisis plan provides guidance for crucial aspects in an emergency situation when thinking clearly is difficult. As company leaders are managing the most immediate needs of the situation, a crisis plan provides confidence that important details are not being overlooked and helps everyone know how to proceed. 
Risk assessment is the first step in creating a crisis plan. Consider the worst-case scenarios that could potentially impact your business. Some are obvious, like product failures or recalls, a workers’ strike, death of an owner or key personnel, loss of your physical location, loss of your largest customer or vendor, or a data breach. Don’t forget to consider public relations disasters due to unflattering social media posts, bad reviews, disgruntled employees, and illegal or unethical activities. Not to be morbid, but you also need to use your imagination and identify less-likely scenarios such as natural disasters, an active shooter situation, and customer or employee injury or death(s) due to product or equipment malfunctions…or a pandemic. Discuss such scenarios with key personnel and advisors to identify your company’s internal and external vulnerabilities.
Analyze how your business would be impacted by potential crises, including 
• shutdown due to facility damage or health concerns
• damaged reputation (of a leader OR the company)
• misuse of your products (think: children eating laundry detergent pods)
• loss of company leaders through death or leaving the company
• customer dissatisfaction
• employee grievances
• key materials/supplier interruption
• technology or social changes making your product or service obsolete
• revenue reduction
• drastic increases in demand (e.g., for grocery stores and delivery services during the pandemic)
• increase in expenses to address challenges
Determine what you can do now to minimize possible impacts. Take proactive steps that are reasonable, including training, education, maintenance, insurance, sound financial management, secure IT procedures, and strong human resources and customer relations policies. Develop contingency plans to address various circumstances. 
How could your company quickly move operations to another location?
What creative options do you have to shift your business model?
Could you repurpose your offerings or equipment? 
Do your employees know whom they should contact in case of illegal, unethical, dangerous, or unhealthy behavior on the part of a co-worker?
What resources could you tap for assistance in a financial or public relations crisis?
Who will fulfill crucial roles during an emergency?
Risk management is essential to protecting business value. Now is not the time to procrastinate. 
In the event of an urgent situation, your crisis plan should also include a contact list of people to be notified, including the order in which they should be contacted. Establish a short list naming who is permitted to discuss the situation with the media on the company’s behalf. Don’t assume you, as the owner, will be available to speak. Drafting sample messages for likely scenarios will help you share relevant information coherently, convey confidence and compassion, and reflect your company’s core values. 
Share your written crisis plan with your employees, advisors, and even family members. Then train everyone for their roles and revise the crisis plan at least every two years, brainstorming for threats and updating for relevance. Following a solid crisis plan cannot prevent every setback, but anticipating and preparing will minimize the negative impact on business value, employees, and the community. The unpredictability of 2020 can be a catalyst for strengthening your business against future risks. 
Dave Driscoll is president of Metro Business Advisors, a business brokerage, valuation and exit planning firm helping owners of companies with revenue up to $20 million sell their most valuable asset. Reach Dave at DDriscoll@MetroBusinessAdvisors.com or 314-303-5600. For more information, visit www.MetroBusinessAdvisors.com.

Submitted 22 days ago
Tags:
Categories: categoryValue Proposition
Views: 139
Print