Tips on resilience and preparing your business for the unexpected
Help with navigating economic uncertainty and supply chain issues.
Small businesses are set to face more economic uncertainty and supply chain issues this year. Rising costs, limited resources and unexpected delays can strain operations and your business's resources. It’s common for businesses to fail in the early days as they haven’t built enough resilience to survive these unexpected hiccups.
Here are some things you can do to help your business to beat the failure rate.
1. Diversify your supply chains
Relying on a single supplier is risky. If there are delays, your business will feel the impact. You can reduce this risk by working with multiple suppliers across different regions. Build connections with backup suppliers, even if you don’t use them often, so you can react quickly.
Use local suppliers. They might cost more, but you can cut down on shipping times and avoid global transport issues. Many companies use a dual-sourcing model. This will keep operations running smoothly if one source is disrupted.
2. Keep a close eye on costs
Good cost control is key in uncertain times. Regular budget check-ins will help you to spot where you can save or adjust spending. You should aim to have 3 to 6 months’ worth of business costs put to one side as a buffer. Small tweaks, like shifting to a smaller office or renting equipment instead of buying, can free up cash for your business.
Tools like QuickBooks and Xero help with budgeting by tracking income and expenses. This can come in handy if prices rise unexpectedly.
3. Build strong contingency plans
Think of contingency plans as a safety net for the biggest risks in your business. These include external risks, like economic downturns or supply delays. There are internal risks too, like cash flow issues. It’s good to have a plan for each risk and clear steps for your team. Who’s in charge if there’s a supply problem? What’s the plan for cash shortages?
Tools like Corporater can help with risk assessment, letting you see which areas to focus on. For example, map out a cash flow plan that includes a scenario with a 20% revenue drop. If business slows, you’ll know where to tighten up your expenses or get help through a loan or another line of credit.
4. Use technology to boost risk management
Today’s technology can help you to track potential risks in real-time. Supply chain software like SAP Ariba or Oracle SCM can track shipments and flag any delays. Tools like QuickBooks can help you to track cash flow, reducing the risk of surprise costs.
Cybersecurity is critical for small and medium-sized enterprises (SMEs). They often need more advanced protection. To avoid security breaches, invest in antivirus software, regular data backups and employee training. These steps can help to keep sensitive data safe and build customer trust.
5. Build clear communication streams
Good communication keeps everyone on the same page in tough times. Cross-department meetings help to keep your team clear on goals and risks. For example, your logistics team may be aware of supply issues, while finance can share cash flow insights. Regular updates keep everyone in the loop.
You’ll need to work out emergency channels and protocols. If there are disruptions, everyone must know who to contact and where to find updates. Tools like Slack and Microsoft Teams help remote teams to keep conversations open and organised.
6. Review strategies regularly
Market conditions shift often, so regular reviews of how your business is doing are important. You should schedule quarterly strategy check-ins with your team across departments, to see current risks and take the necessary action. You should track metrics like cash flow, supply costs and demand trends in these sessions.
Resilience is progress
Resilience doesn’t mean avoiding every risk, it’s about planning for change. Have a pool of suppliers, keep an eye on costs and have a plan B. A culture of communication and flexibility will strengthen your business for the future. Resilience is progress, not perfection, so start with small steps and adapt as you go.
Try out one of the tools we’ve shared below, or keep exploring our Future Skills articles to gear up for business growth.
Try out some of these tools: