If the pandemic taught us anything, it’s to expect the unexpected.
No-one could have foreseen the huge impact that COVID-19 would have on our lives and livelihoods, and the many ripple effects that have followed.
Now, facing labour shortages, rising costs, and a shrinking economy, small businesses are faced with yet another set of challenges.
It’s certainly been a dramatic few years but the truth is that in business, it’s never going to be plain sailing. There’s always going to be some new twist or problem on the horizon. Your job is to ensure that your organisation is prepared for whatever comes your way.
With that in mind, here are five key steps to take to ensure that your small business is ready for anything.
1. Review your business continuity plans
Business continuity plans lay out how your business will function in the event of an interruption or disaster – for example, a cybersecurity attack, a pandemic lockdown, or a power outage.
If you don’t already have a business continuity plan, now is the time to create one. And if you do have a plan, it’s time to dust it off and see if it still meets your needs.
Your business continuity plans should address three key areas:
- What are your critical business functions and how will they be maintained during an interruption?
- Who are the key personnel who will keep the business running and how will they be contacted?
- What are the suppliers and other external partners who are critical to your business and how will you maintain communication with them?
2. Make sure your insurance is up to date
Your business insurance is there to protect you in the event of an unexpected setback. Make sure you have the right coverage for your business by regularly reviewing your policy.
And don’t forget, as your business grows, so does the need for insurance. If you’ve added new employees, equipment, or premises, be sure to let your insurer know.
3. Build up your cash reserves
Cash is king in business, and that’s especially true during tough times. Make sure you have enough cash on hand to cover your costs for at least three months.
If you don’t have the cash reserves you need, now is the time to start building them up. One way to do this is by invoicing your customers promptly and collecting payments as soon as possible.
You might also want to consider taking out a business loan or line of credit, which can provide you with the cash infusion you need to weather an unexpected storm.
4. Review your supply chain
Your business is only as strong as your weakest link, and that includes your supply chain.
Now is a good time to check in with your suppliers and make sure they’re still able to meet your needs. If they’re not, it might be time to start looking for new suppliers who can provide the products and services you need.
5. Focus on flexibility
In today’s business environment, the ability to be flexible is more important than ever.
Think about ways you can make your business more nimble so you can adapt quickly to changes in the market. For example, are you able to scale your software subscriptions up and down as needed? Is your business capital light? Do you have lots of full-time staff, or a lean team of contractors who can be quickly brought on board as needed?
When you make your business leaner and more flexible, you are putting it in a stronger position to adapt to whatever challenges come your way.
The bottom line is that you need to be prepared for the unexpected. By taking these steps, you can make sure your business is ready for anything.
What other steps have you taken to prepare your small business for tough times?