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Steps 5 & 6 for your small business crisis strategy

Steps 5 & 6 for your small business crisis strategy
Recent research by Legal & General indicated that 40% of small businesses would cease trading within a year of losing a key person, and yet few owners understood the risks when asked. In response, we’ve developed a series of critical tests that should help you produce a crisis strategy that covers all your vulnerabilities as a small to medium sized business. We’ve already published tests 1 & 2, 3 & 4, which cover threats from people, and how to protect loved ones and crucial resources. This month we’re moving on to key dependencies, and how to survive if something or someone disappears.

 

[Test 5] What do I depend on?

When you really start to look around you and think about everything that feeds into making your business a success, it’s staggering – and potentially disconcerting – to recognise how many factors are totally out of your control. To help you identify each link in the chain and any potential vulnerabilities, take a look at one business process and think about each step. If a customer places an order, for example, are you reliant on a phone line, electricity and an internet connection to process it? How dependant are you on a single supplier to keep your supply chain operating smoothly?

When you’ve listed the elements of your business that are at risk of disruption if someone else’s business goes wrong, or a utility disappears, think about what the impact to each would be over 24 hours, 48 hours, a week, two weeks; what would you need to put in place to ensure as little disruption as possible? The Government produces a good business continuity plan toolkit that talks you through this process is more detail.

 

[Test 6] Who do I depend on?

Once you’ve covered the ‘what’, it’s time to think about the ‘whom’. Nowadays we don’t expect staff to stay with the same company for their whole working life, but surprisingly few businesses are really prepared for the loss of knowledge and skills should a key player decide it’s time to move on, or if they develop a chronic illness, or the worst happens and they pass away.

It’s good practice in any organisation to ensure that no one person has exclusive access to any particular piece of information – documentation and work manuals can help prevent this, as long as they are kept up to date. This is usually the difficult part – if employees feel they don’t have time to document what they do, they will prioritise their ‘actual’ work and the documentation aspect will slide, so make sure people are given time to write up processes and maintain manuals. Keep all work documents stored and backed up somewhere accessible to everyone, such as a company intranet, shared drive or mutually editable secure wiki pages. If you have staff who work from home or use their own equipment, shared online drives like Dropbox or Google Docs are useful solutions.

It’s crucial to behave sensitively when a key player does become ill or passes away, hence the importance of working out in advance how you will cover the costs of recruiting and training someone new. These costs are actually something you can insure against with key person insurance, which helps your company function independently from any particular individual within it.

Come back next month for the final two tests.

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