Small Business Resilience: Questions Business Owners Must Answer
The past two years have been filled with uncertainty and doubt. Business owners were left steering their business into the unknown without even having a simple glimpse of what lies ahead of them. Even the small businesses that laid out a resilience plan were blindsided by the spontaneity, severity, and length of the pandemic that halted global commerce.
Even though big companies also suffered a considerable amount of damage, small businesses suffered the greatest impact of disruption because their small business resilience plan was non-existent.
But there is always a rainbow after the rain. The past two years have left us a few important questions that will help us prepare for future crises instead of scrambling for solutions when the time comes.
Here are 3 questions designed to help your small business become resilient in times of disasters:
What are your priorities?
When the going gets rough, your priorities are the key to keep yourself and your business focused. Small businesses are known for their extremely tight profit margins so setting your priorities straight when a disaster arrive, it is vital for your business resilience.
To properly set your priorities in times of uncertainty, you should start mapping out the operational factors of your business. This includes your employees, assets, processes, and payable. You should categorise which functions are critical to keep your business running. Having your priorities identified beforehand can help you avoid making hasty and uninformed decisions in the heat of the moment.
Crises will threaten your bottom line; do everything you can to protect it!
What makes your business vulnerable?
As you map out your priorities, you will stumble upon a few vulnerabilities within your business. Your vulnerability might stem from your inventory, it being exceedingly high or potentially lower than you first realised. The vulnerability might also come out of your business’ internal process, it being too reliant on certain people to operate on a daily basis.
It is a good and sound practice to look at every aspect of your business that is draining your profits or not producing an optimal return on investment. When times are rough, every cent counts! Keep your business lean and agile.
Certain crises may make one business more vulnerable than others. For example, during the pandemic an invisible line was placed. Differentiating the “essential” and “non-essential” businesses from each other. Businesses tagged as non-essential were extremely vulnerable to the crises as compared to businesses tagged as essential.
Even though no one predicted being defined that way, it is valuable to consider the capacity in which your small business can be resilient and operate in different crisis situations.
What are the strengths of your business?
The strengths of your business will keep it afloat during turbulent times. Whether it is unmatchable prices, a personalised service, or the best slice of pizza in town, recognises what keeps your customers coming back to your storefront! Your ability as the business owner to keep up with industry trends is another important strength. When a crisis hits, you should not be in a position where are caught flat-footed. You should always be agile and be able to adapt and innovate to provide what your customers need.
For example, during the pandemic, plenty of businesses shifted their presence online. Digitalization and an understanding of your customers’ behavior can make all the difference in preparing your business for any storm.
Once you have answered the three questions posted above, it is now time for you to get creative with your business. Creativity and ingenuity are essential for small business resilience.
When the pandemic hits, plenty of small business owners stepped up their game and got creative with what they had. There once was a local general store owner reached customers via FaceTime to take their orders. Local apparel stores started sewing masks for health care workers and community members. Distilleries turned their alcohol production into the highly sought-after hand sanitizer.
In times of uncertainty, creativity goes a long way. Whether it is repurposing your production line, shifting digitally, or completely changing the way you offer your services. It is important to keep an open mind to whatever may come tomorrow and how you can help your community in times of need.
For small business owners, wading through the pandemic has been no easy feat. The best way to brave ahead? Lay the groundwork for a strong and sound financial model that will serve as the foundation of your small business’ resiliency! Preparing means protecting so get in touch with us to see how we can help you lay a strong financial foundation for your business through the use of your business financials!