Preparing for uncertain times
Posted 29 Jun '20
Posted 29 Jun '20
While you may never be fully prepared for unexpected circumstances in business, there are ways to soften the impact of a crisis should it arrive.
Of course we’re not suggesting you should hoard toilet paper and Nespresso and start building a bunker in the basement… When we talk about preparing for uncertainty in business, we refer to risk mitigation.
It’s something that isn’t talked about enough when starting up, let alone when planning your goals for the new financial year. This got us thinking, why isn’t it talked about? Is it because it’s the least inspiring goal?
‘Can’t wait to build my extensive policies and procedures manual on how to deal with inappropriate use of work emails’ … said no busy small business owner ever.
However let’s say hypothetically, you don’t have an organisation email policy and as a result of poor email management, you’ve now been hacked, giving access to confidential information to someone outside of your organisation. Do you have a procedure in place to deal with the situation, calmly, strategically and effectively?
Risk mitigation brings awareness to the unexpected and helps you catch the curve balls. We need that in business as the reality is your business could be sued, your staff member could hurt themselves and a global pandemic can happen.
Risk mitigation is the strategy to prepare for threats and reduce the adverse and potentially long-term effects that these threats may have.
We believe you should first start looking at risk management in your business by analysing your organisation structure. *
How does your organisation work? From your product or service, to your team, intellectual property and how do you take care of each component?
When you’re clear on your current framework, you can then identify potential risks within your business.
When your aware of the risks, you can determine the likelihood, cause and consequence.
What impact would the risk have on your business if it were to happen?
Let’s say for example, your production line is outsourced to an international manufacturer and due to the global pandemic, production has been put on hold indefinitely. What is the likelihood, cause and consequence of this risk and what action plan can you put in place to control the damage to the best of your ability?
It might never happen, but is it worth the consideration? We think so.
*Disclaimer we’re not risk management experts and don’t claim to be, but we can connect you to people who are.
While every business will have different needs and priorities, a few places you can start are as follows
– Risk Matrix: a process in which you brainstorm all potential risks, weigh up their likelihood and consequence and then implement ways to mitigate.
– Business Insurances: when was the last time you reviewed these and what are you covered for? Are there other insurances that would benefit your business?
– Employee HR Manual and Contracts: firstly, do you have company policies and procedures? Are they clearly outlined in a manual/contracts that your staff have sighted and understand?
– Workplace Health & Safety: other than paying for WorkCover, do you have procedures in place for potential hazards such as fires, accident reporting, equipment maintenance and instructional use?
– IT Security: do you use cloud based operating systems that are secure? Do you have security policies in place that your staff follow? i.e. use of emails, password storing programs etc.
– Supply Chain if you manufacture internationally; do you have a back up supplier in place if needed?
– Customer Base does your business success rely on one or two main customers to continue operation? Have you considered the impact or action plan if you are to lose these?
It’s that fresh financial year feeling! It’s time to go back, look at your organisation structure, assess what you have in place, what you may need to improve and start working on your goals today.
Whether you’re starting over or improving what you’ve got, you can do it and you should do it. We’re here to help. Call Empire today on 07 3124 0244.
Boost IT works with small businesses as an extension of their own team delivering an IT department on demand. Client’s use our IT solutions and expertise to enhance capability and cyber security, as well as drive innovation and efficiency.
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Cornerstone Advice provides financial planning and mortgage broking services. They specialise in working with busy families and professionals to establish a financial roadmap that maximises their financial opportunities alongside establishing a backup plan to protect against the unexpected.