COVID-19 has shut businesses down, and if you don’t properly manage your cash flow, you might be the next one to close shop. Your ability to maintain a positive cash flow can make a huge difference in whether your business will persevere or not and survive this pandemic. It can help you adapt to the changes in the unpredictable economy, while the opposite can severely limit what you can do, increasing your risks.
They say that while resources, workforce, and skills will get you far in any field, they can only do so much. At the end of the day, those that get far are those who can utilize whatever resources are available and adapt to the vicissitudes and changes in the business climate. This ability to quickly adjust to situations and mobilize solutions to survive potential threats, calamity, and other unforeseen events is called Business Resilience.
A significant aspect of adaptability is understanding the scale of your business and its weaknesses and vulnerabilities. No one business is alike, and each industry comes with its own risks. Things like your geographical location, customer profile, and even the nature of the industry itself may pose a threat to your business.
Threats come in all shapes, and they weigh on your business differently. It may be as small as a power outage for an internet cafe, typhoons on farmlands, and even economic collapse resulting from a change in policy, pandemics, etc.With that being said, you don’t have to remain helpless against potential dangers that threaten your company. All you need is one thing: preparation. The following segment of practical business measures will help build your business resilience.
If you’re feeling lost, here’s what you can do to ensure that your company remains resilient even in the face of adversity. Take a look at these crucial tips:
If you’re feeling lost, here’s what you can do to ensure that your company remains resilient even in the face of adversity. Take a look at these crucial tips:
All planning begins with an assessment. Conduct a detailed and timely analysis of your business’s potential risks, as well as the flaws in your business itself. For example, if your business is operating on a lowland without proper drainage, develop a needed evacuation plan, waterproofing, etc. If your business is an online start-up, assess the dangers of cyber-attacks and hacking.
These assessments will ensure that you are well-equipped for different unfavorable situations if they arise. Just make sure that these thorough evaluations are conducted regularly and honestly to allow you to create a solution or plan that fits your business needs at the time discussed.
This type of analysis will require that you and your team conduct an inventory of your company. It also involves analyzing daily business operations and assessing which activities are the most profitable, the most essential, and the most preferred by customers.
Events such as supply chain disruption or an economic recession can significantly affect your sales. Understanding what product or service brings in the most revenue will help you decide what to do in times of economic downturn. This procedure also enables you to cut losses as it shows what services are underperforming and are no longer worth the investment. A thorough discussion with your accountant is in order!
As previously mentioned, your ability to remain resilient in a time of hardship will depend on your skill in allocating resources efficiently. Part of utilizing resources is preparing them in advance. Ensure that you have a separate emergency fund account that can cover structural damages in case of natural calamity, utilities, wages, etc. Overall, you should secure a budget that can last 5-12 months of business operations.
To ensure business longevity, it is vital that you diversify. It is always better to have five thriving small businesses tied to a mother company instead of one single business where all your money is tied to. When you have various businesses across different industries, it means that no two business models are alike. Thus, they do not possess the same risks and hazards. If one industry is down, surely, your other businesses will compensate. However, if you put all your eggs in one basket, and if that one business is caught in a predicament, it will be difficult to compensate for the losses.
The most surefire way to secure your business is to get insurance. If it is within your means, secure an insurance policy that protects all assets, including – inventories, property, equipment, and cash on hand. Doing so saves you from all kinds of misfortune, from theft to earthquakes. Secure added insurance to cover business loans and debts. Insurance is protection for you, your company, and your staff!
Business resilience is an essential aspect of the longevity and continuity of any company. By following these steps, you will be better equipped to face any kind of trouble. Remember, life is not perfect, and facing problems is not a matter of if but when. Thus, it would help if you prepared because failing to do so means you will fail quickly when issues strike. Take the first step to secure your future and that of your company by taking the needed measures to withstand anything and everything. Give us a call for a free 30-minute consultation.
