What would your business do if it suffered a cyber-attack tomorrow, or perhaps lost its biggest client or an emergency?
We often have an implicit belief that the exceptional will not happen to us, that we can devote our energy and time elsewhere, such as in investing in your business’s success. However, the reality is no business is an exception to the exceptional, so its good to be prepared!
For example, 60% of small businesses shut down within 6 months of a cyber-attack. This, alongside many other disasters can force a business to close its doors. With preventative measures that can assure business continuity even when the exceptional does occur, a business can enjoy peace of mind. In this piece, we will give you a 10 tips to prepare your business for anything.
Tip 1: Create Contingency Plans
A key step is to create contingency plans for events that will force your business to operate outside of its usual circumstances. For example, if a fire or global pandemic occurs, having a contingency plan for working without on-premises infrastructure can help your organization to land on its feet.
These plan s should outline the steps your business will take during an emergency. Which can include who will be responsible for what tasks, and how communicationss will be managed with employees, customers and suppliers.
Tip 2: Maintain Adequate Insurance Coverage
Insurance becomes assurance when the exceptional happens to a business. By ensuring there is an adequate coverage of insurance, your business will be financially protected from exceptional events that are covered within the insurance policies.
Insurance policies should include aspects such as:
- Liability coverage
- Property damage coverage
- Business interruption coverage
- Data breach costs
Business interruption coverage is particularly important. It can help cover lost income and expenses during a disruption. Such as a natural disaster or supply chain disruption.
One of the newer types of policies is cybersecurity liability insurance amidst the rise of cyber threats. This type of insurance covers costs such as those undertaken to remediate a breach and legal expenses.
Tip 3: Diversify Your Revenue Streams
Small businesses may rely on a single product or service which can present a great risk. As the saying goes, we should be careful to put all (or most) of our eggs in one basket. A stream of income can be compromised from a range of angles, including events effecting supply chains, disruptive innovations in the market, or in certain cases, changes in laws and regulations.
Diversifying your revenue streams can help reduce this risk by ensuring that your business has several sources of income. For example, a restaurant can offer catering services. A clothing store can sell merchandise online as well as at its physical location.
Tip 4: Build Strong Relationships with Suppliers
A strong, communicative and responsive relationship with suppliers can help a business to upkeep a reliable supply chain. This can be especially important for businesses that rely on just one or a couple of suppliers for their products.
In the event of a disruption, a strong supplier relationship can be leveraged to mitigate the disruption and provide enhanced continuity. It may help as a preventative measure, as with a strong link to a supplier, your business may be forewarned of potential impacts on the supply chain that may cause disruption.
Tip 5: Keep Cash Reserves
Small businesses should keep cash reserves to help them weather unexpected events. Cash reserves can help cover unexpected expenses. Such as repairs, legal fees, or loss of income. As a general rule of thumb, businesses should keep at least six months’ worth of expenses in cash reserves.
Tip 6: Build Strong Outsourcing Relationships
The more functions that a business runs in-house, the more there are certain risks (despite the benefits on offer). For example, if a key member of the IT team quits, this can increase the risk of security issues. Outsourced relationships, such as one with an IT support provider can guarantee a more continuous supply of key services and needs for the business.
In general, outsourcing functions will give more options and flexibility for the business should they need to change their suppliers.
Tip 7: Review Your Financials Regularly
Small business owners should review their finances regularly to track the progress towards their goals but also to identify any issues or patterns before they have the chance to make an impact. For example, examine your revenue streams carefully and profitability to ensure that your financials are heading in a healthy and sustainable direction.
This can be done by making sure that income and expenses are fully tracked, regularly reviewing financial statements, and working closely with financial advisors.
Tip 8: Invest in Technology
Investing in technology can help small businesses to prepare for unexpected events. For example, cloud-based software can help businesses store their data off-site should they ever need to operate away from the office.
Technology can also help businesses to automate processes which frees up time and capacity to drive higher forms of value across the business, while driving efficiency.
Tip 9: Train Employees for Emergencies
Small businesses should train their employees for emergencies. This helps to ensure that your people will know what to do and expect in case of an unexpected event.
This includes training for natural disasters, cyber-attacks, and other emergencies. Businesses should also have a plan for communicating with employees during an emergency.
Tip 10: Stay Up to Date on Regulatory Requirements
As technology is ever-rapidly changing how the world operates, regulatory bodies and governments are also trying to speed up to keep pace with these changes. For businesses today, keeping track of regulatory requirements will help them to remain compliant and safe.
This aspect includes tax laws, labor laws, and industry-specific regulations. Non-compliance can result in fines, legal fees, and damage to your business’s reputation.
Overall, small businesses face many risks and large-scale tides that can sweep them off course. However, by taking preventative measures, they can remain prepared, secure and seamlessly sail to success through the ups and downs of the journey.
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This Article has been Republished with Permission from The Technology Press.