When the Covid-19 pandemic hit in 2020 and shut down the entire world, most businesses were not prepared for a crisis of this magnitude. Some businesses went into a holding pattern they are still working to come out of; some businesses went under, and some businesses thrived. We don’t know what the next crisis will be, but as sure as the sun will come up tomorrow, there are going to be major challenges for your business at some point.
What’s The Next Crisis For Your Business?
The pandemic was a wake-up call in many ways. No one was spared from having their business shaken up, and being forced to take a hard look at how we were doing things, and how we should do them going forward. One of the things that every business should be looking at is how to deal with the next “black swan” event—the next major crisis that pops up without warning.
Risk Assessment Is Critical
The next steps (after we’ve all taken a breather for a minute) is doing a risk-assessment of your business, and seeing where your strengths and weaknesses lie. After discovering your business’ weaknesses, the first step is deciding how likely the risk is—is the risk likely, moderately likely, or possible but unlikely?
Now Assign Weight To Your Risks
The weights assigned to risks should give you a good idea about how to deal with them—a small but likely risk should have some effort made to mitigate it, but you shouldn’t lose too much sleep over it. An unlikely but catastrophic risk needs some serious attention—if the event occurs and it will put you out of business, you need to prepare for it.
The intermediate risks will each need to be evaluated on a case-by-case basis. This risk is possible, and if it happens, it would be bad, so we should definitely put some effort into making preparations for it if it does happen.
Here is a good overview of business continuity.
Supply Chains—The Weakest Link
One of the most common issues for businesses during the pandemic were supply issues. Now is a good time to look at your suppliers and assess any risks here—do you have supply chains that are far too long and fragile? Do you get most of your critical supplies from one supplier, and are therefore at risk if they have issues?
Could you source more locally to reduce supply chain breakdowns? Could you create relationships with multiple suppliers? Could you do some product building in-house? Could this even be a new revenue stream for you? There are no wrong answers here—the idea is to get you questioning how you do things, and finding weaknesses before they become critical.
Technology Saved The Day
One of the shining lights of the Covid-19 pandemic was technology. Technology allowed people to rapidly switch to working from home, and enabled us all to stay connected, for business as well as personal uses. If your business isn’t up to speed on technology, now is a good time to get on board and train your staff. Technology isn’t going away—we’re going to be relying more and more on it in the future.
Shaw & Associates do business planning, and we’d love to sit down with you and look at your business risks and work out mitigation plans with you.
Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.