The world of business, like life, is incredibly hard to predict.
There are times when we can feel like we have done everything right, while taking every possible precaution. But still, out of nowhere we suddenly encounter the one thing that it impossible to expect, the unexpected.
Just because the unexpected exists, it is usually the timing and the details of it rather than the fact that at some point, something will happen that will have a negative impact on your business – this much is inevitable.
So what you can do is accept that the unexpected will happen, and prepare for it. So whether it is a recession, a natural disaster, roadworks that eliminates the foot traffic passing your shop, or something so entirely out of the blue that we cannot yet imagine it, let’s take a look a four ways you can begin preparing your business for the unexpected.
Have Your Finances in Order
The time to prepare for a downturn in the economy, or in your particular sector, is before it happens.
Putting yourself in a position where you can react appropriately and ultimately recover from hard times is one of the most important things a business owner can do.
There are three simple ways you can do this. Firstly, even if you have a consistent customer base, you should establish a rainy day fund for those things that are completely unexpected.
If possible, aim to have a cash reserve that will keep you covered for 6-12 months.
Secondly, make sure that you have a list of all your financial obligations, meaning those expenses and payments that you have to pay at certain times. Knowing what these are will put you one step of the crisis, whatever and whenever it is.
For a streamlined approach, consider outsourced accounting to maintain accurate financial records and keep track of your financial commitments efficiently. It will give you a clear financial picture, enhancing your preparedness for unforeseen challenges.
Finally, while an emergency fund should be your first line of defence, it is impossible to fully predict the future. So ensuring that you have a line of credit or credit card available will give you the peace of mind required to react in a calm and calculated fashion.
Manage Your Inventory
An organized inventory is crucial, as it means that you will neither be wasteful nor run out of the things that keep your business ticking over.
It is important to accurately track your inventory to fulfill orders in a timely and efficient manner.
Many businesses who plan ahead have turned to rough cut capacity planning. It allows you to understand how much supply you’re going to need to meet demand, but also gives you a schedule that is flexible, or in other words, be fully prepared for the unexpected!
Know Your Employees
Your employees are the heart of your business. If you treat them with dignity and respect, and ensure that they receive their pay-checks on time, they will stick with you when you need them most.
The sooner that your employees feel safe and secure when a crisis strikes, the sooner they will be able to do everything they can to follow your lead and get the business back on track.
Customer Relations
If you treat your customers well, they will understand when you are working through tough times and do their best to support you.
This is when an open and honest line of communication will pay off.
If you have been upfront with your clients in the past, then they will be more willing to trust you when you explain the status of your company and offer alternative agreements until it’s back to business as usual.