If there’s one thing the coronavirus has taught us, it’s that unexpected challenges can arise at any time. If we’re unprepared, it can be hard to navigate these surprises. Even if we can’t predict the future, thankfully there are strategies we can put in place to help us manage the unexpected.
Some challenges can never be predicted but a good proportion of them can be planned for, even if you don’t know the exact details. How? By knowing the areas where your business is vulnerable and then working towards strengthening and protecting them. Regular risk management should be part of every business.
Start with analysing each department of your business for any weaknesses that could lead to a crisis. If you can deal with any straight away, do so. Next, develop plans and responses to deal with potential crises. If this happens, how will we protect that? Lastly, create a recovery plan. If we suffer this loss, how will we recover?
Robust financial planning will often see businesses through some of the toughest challenges. Regularly review your records to see how you can increase incoming money and decrease unnecessary expenses. This will help you spot vulnerabilities and make the right changes to strengthen your business.
Improving your invoicing, diversifying your income and adjusting your pricing are all strategies that can help improve cash flow. The better condition your cash flow is in, the better off you’ll be when the unexpected happens.
One of the best ways to prepare for the unexpected is to build up your cash reserve. This is an emergency fund that you can use for all those unplanned, short-term needs without borrowing money. By doing regular cash flow forecasts, you can predict if you’ll have enough cash to run your business – even if the unexpected pops up.
When things are going well, take the opportunity to save up for the surprises. Although the ideal amount varies from business to business, a good target to aim for is 3-6 months of business expenses in your cash reserve.
Whether it’s social distancing or advancements in technology, every business will run up against unexpected changes. It’s the businesses that can adapt and change strategies that tend to survive and stay strong. Adaptability is something you actually have to plan for and practice.
Key elements of adaptable businesses include:
Even though the coronavirus has affected us all, the impact has been different from business to business. There is no one-size-fits-all approach to protecting your business from the unexpected and sometimes it can be hard to see your vulnerabilities from the inside.
When you seek professional help, you can create tailored plans and strategies to safeguard and strengthen your business when the unexpected crops up. If you’re in need of assistance, don’t hesitate to reach out.
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