Starting a business can be one of the most rewarding endeavours a person can undertake. It goes without saying that it’s going to be a lot of work. When you sink so much time and effort into a business you may not want to think about things going wrong, but they can. That’s why it’s important to try and predict and plan for the unexpected. You won’t always be able to predict everything so you should absolutely have business insurance, and there are business insurance brokers to help you with that. You should also take some time and prepare your business so those unexpected risks are a little less unexpected.
– Decide what matters most
In an emergency, you’re not going to have a lot of time to carefully weigh out your options. You’re going to need to know what aspects of your business are the most important. Your inventory? Staff? Client list? If you answered all of them, we totally understand but knowing where to make cuts in a crisis is important. You’ll need to think through catastrophe scenarios and have a good idea where the dominos are going to fall.
– Consult with stakeholders
If you’re a new business then it’s likely your stakeholders are all still early investors who saw promise in you and your business. If you’ve been around for a while you’re stakeholders have poured over your quarterly reports and some will know your numbers inside and out.
No matter what stage you’re at, getting a second opinion from people who are invested in your success is always a good idea.
– Identify the risks
When it comes to identifying risk’s to your business there are two main types; weaknesses, and threats.
Weaknesses come from inside the business, things like limited cash flow or inexperienced staff. Over time you’ll want to find ways to turn these things into strengths.
Threats come from outside the business, things like weather, and competition. These can be planned for to a certain extent. They’re also good things to check to make sure your current insurance policy doesn’t leave you exposed.
– Analyse the risks
Break the risks down into numbers. How long will it take to hire and train new staff? What’s your thinnest operating margin if you get into a price war with a competitor? Being able to quantify these risks by putting them into terms like time and cost lets you run the numbers on potential problems before they become problems.
– Treat Risks To Your Business
Take those quantified risks and numbers and decide what the most important ones to tackle are. What resources can you sacrifice now so you’ll be more prepared in the future? Do you have handshake agreements with suppliers that you could get in writing? Now’s the time to solidify things like that, before they become a problem down the road
– Commit to reducing risk
The last thing you’re going to do is maybe the most important. Make a commitment to reducing risks to your business. You’ll have all the numbers with you, know what your most pressing concerns are and consult with stakeholders. It’s also a good time to review your business insurance policy to make sure it’s still the right one for you.
With all that in place, you may not know what the future holds, but you can be confident you’re going to face it with a strong foundation. A foundation you’ve built by working hard and smart.