As a small business owner, you know that things don’t always go as planned, and many challenges are outside of your control. It’s important to take steps to prepare yourself and your employees to not only endure but also thrive during and after a crisis.
In this post, we’ll outline five types of crises that your company could face so you can be prepared for the unexpected and maintain small business continuity.
If an employee or individual associated with your business is involved in unethical activities or misconduct, your business may face a personnel crisis. Whether this involves misconduct in the workplace or in the individual’s personal life, this can cause backlash against your business.
If a personnel crisis occurs, you should first identify the severity of the situation and understand to what extent the individual violated your business’s values. This can help you determine how to act. From there, you can outline disciplinary action and if necessary, draft a statement to communicate to your internal and external stakeholders. If this situation has gained attention from media outlets, make sure to be transparent and communicate the actions you’re taking to address and learn from the situation.
Organization crisis occurs if your business has significantly wronged or misled your customers. This may include withholding information about your products or services. These types of crises are often caused when employees neglect the needs of your customers.
The best way to address an organizational crisis is to assess your company culture and implement changes to ensure your team is prioritizing customer success above all else. Aligning your business and culture to these values will help ensure that your current and future employees don’t neglect your customers’ needs.
In today’s digital age, businesses of all sizes rely on technology for most day-to-day operations. If you experience an outage or fail to maintain internet continuity, you’ll likely have much more to worry about than missing a few calls or emails. You could lose potential leads, miss out on sales opportunities, and even harm your company’s reputation.
If you face a technological crisis, you should first work with your tech provider to resolve the problem as fast as possible. Once your software or technology is back online, you can regroup with your internal team to better understand what caused the issue and set up procedures to prevent a similar issue from occurring again in the future.
A financial crisis can occur when a small business loses values in assets or can’t pay off its debt. This is typically caused by a drastic drop in demand for your business’s products or services. If your business faces a financial crisis, you should move around your funds to cover the immediate costs in the short-term. Once this has been done, you can then reassess your business’s revenue sources to determine different ways to create long-term income and increase your overall margins.
Natural disasters like hurricanes, earthquakes, and tornados can also severely impact your business. According to FEMA, 40-60% of businesses never reopen their doors following a disaster, often due to the lack of emergency preparedness. This is especially true if your business is located in an area exposed to extreme weather.
To prepare for the worst, you should take time to create an emergency action plan. This includes actions you should take when faced with different natural disasters, contact information for stakeholders and support services, and evacuation protocols. This plan also includes steps to take following the event to help your business recover and stabilize. By taking this proactive step, you’ll be setup to handle a natural crisis while maintaining small business continuity.
Once you understand the different types of crises that your business may face, you can put a proactive crisis management and small business continuity plan in place. A crisis can bring a lot of uncertainty to the table, but you can have peace of mind knowing that you’ve taken the time to prepare for the worst. Even if you don’t plan out every contingency, being proactive will go a long way in keeping your business safe.