Covid-19 was an especially abrupt and poignant reminder that most crises come without warning. The pandemic forced nearly every business, organization or group of people doing anything at all to learn how to adapt, creating new solutions that were previously unthinkable. The lessons we learned centered largely around the need to be nimble in the face of uncertainty.
There is no doubt, there will be more crises and the best thing small businesses can do is make sure they are ready for whatever comes their way so they can continue to operate. Here are five steps that businesses can take to prepare for the unknown.
1. Do not be complacent: Assess your business and determine areas of vulnerability and where improvements could be made if you or the broader economy were to face a sudden downturn. Make sure you are “shoring up your defenses”, even in good times, as you never know when things might take a turn for the worse. Think about the worst case scenario and how you would develop a plan to handle it.
2. Take a look at your budget: Financial resilience is the key to making it through a crisis. The average small business has only enough cash to keep things running for 27 days. Make sure you’ve set aside an emergency fund and have identified areas where you can make improvements, cut costs, and shift funds to what’s most important in keeping your employees and business afloat. To go a step further, you might even consider building an emergency fund into your operating budget.
3. Secure access to extra cash: Speak to your financial advisor, lender, or accountant about securing an extra line of credit, or determining what steps you need to take to ensure you have access to extra cash when you might need it the most.
4. Create a crisis handbook: Detailed plans and actions that you and your staff will take in the event of a crisis, along with the actions you’ll need to take when the crisis has ended. Stock up on basic supplies and things you’ll need for a safe return to work for yourself, your employees, and your customers.
5. Revisit your digital and marketing plan: Ensure your business is able to quickly pivot and move to functioning solely online. Do you have an online shop that needs dusting up, or have been meaning to get electronic gift cards set up for your business? Now’s the time to get these types of options ready.
Wealth manager and author Christopher Manske said, “It’s impossible for anyone keeping up with current events to believe that the future will be completely free of problems.” While one cannot predict the future, the ability for small businesses to be able to quickly adapt to it will be invaluable.