Business planning for uncertainty
Running a business in normal times, especially a small business or start-up is the perfect preparation for times of wider market crisis. Uncertainty, lack of cash flow, loss of clients, new business hunting, striving for efficiencies, creating separate revenue opportunities, collaboration. These are all areas that could easily be action points in normal operating conditions. Regardless, business planning for uncertainty gives you an immediate action checklist and operational parameters to follow will provide some relief.
…business planning for uncertainty gives you an immediate action checklist and operational parameters to follow…
The size of your business is also key. Is it just you or do you operate as a partnership? Is one of you the creative and the other the business mind? What if you fell ill for a lengthy period, unable to work or your business partner did? Do you or they know how to run their side of the business? If you are on your own can the business run without you and can someone come in to help easily?
These issues above are not market-driven like the current crisis in front of us all BUT they do highlight the need to plan accordingly and face up to weaknesses that may exist in the business. It will also highlight the strengths. Call it a disaster recovery plan and set it in stone.
- Systems check
- Are all the IT, finance and reporting processes you have in place ready for a business pause or for you to work remotely away from your office? If you are stuck at home can all these be accessed easily without interruption to you running your business?
- In the world of the cloud, are you able to access your important documents remotely?
- Contact lists
- Do you have the contacts for all these systems above, should they fail or perhaps you are unable to pay for them in the short term?Can you negotiate their terms given a business cash flow issue?
- Can your employees access this information should you become incapacitated?
- Are your suppliers’ information details available for a ‘somebody’ to access in case you become unavailable?
- Financial assistance
- Is insurance in place against losing business or clients which are out of your control?
- Are you able to get government help?
- If you have an accountant, seek advice.
This last point is important because things such as this, like your first aid training, get forgotten and left to gather dust. When you really need it, in an emergency, the regret that actions were not kept updated will further accentuate the pain. Especially if they end up being critical to keeping the business going.
Big businesses tend to have cash reserves in place for crisis situations and small businesses cannot really have the same approach, purely because of scale. By having a plan in place, it makes it clear in a crisis. What needs to be focused on and which parts of the business can be put on ice without affecting the overall operation? It also gives the owner some element of peace of mind even if the money may not be flowing – at least there is a process to follow and some structure in the chaos.
By business planning for this slightly extreme circumstance, it is also a very cathartic process. Analysing the business, something which perhaps does not happen very often as most owner-operators are too busy trying to deliver a customer experience, gives a complete picture of the concern you set up and grew. Look at all the strengths and weaknesses, as a by-product you will gain an appreciation of things you would like to do differently, directions to go in or things to stop altogether. It can and should be a very healthy process. Business planning for uncertainty is a hard but necessary task.