There is much talk currently about business resilience but what is it, why is it important and how do you ensure your business is?
In this article, I will try to answer these questions and also give some examples of what you should be thinking about to improve the stability and robustness of your company. Firstly, let’s look at what business resilience is.
Business resilience is ‘the ability of a business to survive unforeseen events that may otherwise have caused the failure of a business’.
There is an irony that in a period when so much has been talked about the importance of ‘Globalisation’ we are now seeing a litany of global issues dominating our economic position; Covid, escalating energy costs, war in Europe, global food price rises, recession and inflation.
In addition, we have the after effects of the B word, even though our politicians seem unable to be straight and admit that Brexit has damaged the economy. There can’t be many people who can remember a time when there have been so many potentially damaging events facing businesses. It is this tidal wave of events that means business must be prepared to adapt, change, be flexible at short notice to ride out each storm as it hits.
If we cast our minds back to the height of the Covid pandemic, businesses had to learn very quickly how to become more resilient to ensure survival through the crisis.
So, as we move further into the 21st century how do businesses continue to develop their resilience to both internal and external factors in these uncertain times?
My own recommendation is that you adopt the ‘what happens if [insert scenario] happens’ thought process; that is looking at key areas of your operation and asking ‘what if’ this or that happened, what is our contingency, what is our plan B?
This is typically more realistic than some more traditional ways of planning such as forecasting your profit and loss for the next twelve months where you might look at preparing several forecasts based on sales growing at X % or maybe falling by Y%. In the world we now find ourselves in we need to be more creative, dare I say it more pessimistic! So, using the forecasting P&L example above we might ask ourselves some of the following questions:
This last one is currently the most pressing issue to consider, consider just how will a recession accompanied by high inflation, higher interest rates and a reduction in living standards for many, affect your customers and their likelihood to buy your products. The answer of course depends on what you sell, how you sell it.
During Covid our mentor for businesses near Manchester, Paul Clarke, shared his top tips for making businesses more resilient during the pandemic, so it’s an article worth reading.
To be truly resilient, an organisation needs to have a business continuity plan/disaster recovery plan that lays out what the staff/business will do in the event of unforeseen circumstances. This can cover anything from a power or IT failure, through flooding of premises to dare I say a global pandemic.
So, what areas would a plan cover to ensure that the business covers all key aspects required? Here are my recommended four key areas that owners of small businesses should give thought to and a few examples of the points to consider:
All of the above ‘what ifs’ are a good example of the kind of questions a Business Mentor would ask, open questions that make you think about your business from a slightly different perspective.
It’s important for owners of small businesses to realise that the type of planning discussed here is no longer just for large businesses or corporates. If events over recent years like Brexit, Covid and war have taught us anything, it is that we need to expect the unexpected. Two years of Covid with lockdowns and restrictions proved that the businesses which survived were more flexible, adaptable and in some instances more creative and therefore more resilient.
This can be quite an in-depth topic so for a more detailed explanation of how to put together your plan the following two articles are well worth reading:
If you would like some help and support making your business more resilient or indeed with any aspect of your business then we offer a complimentary, free mentoring session.
Typically, this is around an hour and a half spent with one of our experienced business mentors covering any aspect of business. There is no obligation to use our services afterwards, but it will allow you to experience how having a mentor can help you and your business.
Managing Director and Founder
UK Business Mentoring Group
0845 680 3634