Is your business vulnerable?
There are obvious times when a business is vulnerable, when it’s new or when there’s a catastrophic incident like a fire or a cyber attack. Have you ever considered your business to be vulnerable when things are going really really well? When sales are climbing through the roof, staff are all performing well and the bank manager is smiling?
Now I really don’t want to rain on anyone’s parade, and most of time there is no need to get over anxious, but there are times, I like to call them hidden or concealed vulnerabilities, when it’s well worth checking and then checking again, why are sales are doing so well, and why is that previously troublesome employee suddenly calming down and performing out of their skin?
Of course you do need to protect yourself from the very real threat of cyber attack, have a look at the Welsh Government’s advice on avoiding cyber attack. http://businesswales.gov.wales/blog/news/information-communication-technology-ict/your-business-vulnerable-cyber-attack there’s also some excellent advice available of the risks of fire, have a look at this risk assessment document provided by the London Fire Brigade, http://www.london-fire.gov.uk/FireRiskAssessment.asp
Getting back to the problem of hidden vulnerability, let’s take one scenario, your monthly sales have tripled over the last 12 months, you’ve noticed that several clients have started to use you a lot more than previously, of course you’ve been out and talked to the clients, all good there no problems, you’ve asked your Ops team, they’re very pleased with the new marketing campaign that’s obviously paying dividends, so you relax and enjoy the increased turnover!
It slowly becomes apparent that one of your competitors has made a strategic decision not to supply certain companies due to their poor payment record, they’ve played you along for a few months with regular payments, but one of them has placed a large order and they’re paying scant regard to your payment terms.
You may have taken on extra staff to deal with the increased business, or leased expensive machinery to cope with the demand, now you have to go to your bank manager and explain why you need to extend your overdraft, not a conversation anyone really wants to have. CiMA is the Chartered Institute of Management Accountants, they have some excellent advice on surviving a cash flow crisis, check it out here http://www.cimaglobal.com/Thought-leadership/Newsletters/Insight-e-magazine/Insight-Archive/Surviving-the-liquidity-crisis---managing-your-cash/
Then there’s the situation when one of the senior team leaves unexpectedly, or worse case, scenario passes away suddenly. It’s only at this point that you realise the amount of knowledge they carried around with them in their head! No amount of ‘key man/woman insurance is going to be able to replace that!
Two things are vitally important in both of the scenarios mentioned above, firstly don’t panic, panic is a result of fear, and fear paralyses you, so try to stay calm throughout these situations, nothing lasts forever, it’s the sign of a healthy growing business that new problems will be encountered at regular intervals.
The second thing is to immediately take stock of the situation, write a situation report, this basically details everything that’s happening at that very moment, you need to make a list of the problems, the issues, the people involved and the potential solutions, basically ask yourself, who what when where and how am I going to get my business back on track, from this document you can form a recovery plan
You should also remember that this document will need to be flexible, the situation, no matter what’s caused your problem, it will change and your plan needs to be able to change with it.
Finally, it’s worth repeating, don’t panic, with some careful thought and planning there’s always a solution!