What happens if your world explodes?
Exploring how good planning can protect your small business.
Small businesses are sensitive little souls. They are often dependent on a single hard working person, sitting at the heart. There may be support and tools, but that one person is often the lifeblood of the business.
So, what happens if their world explodes?
What happens to your business if you break your leg, drop your iPad or a loved one falls seriously ill and needs your support?
What happens if one of your children can’t go to school, and you have a client meeting or a deadline that day?
Your solution is that scary (and often considered boring) word – planning.
In the corporate world, it’s standard practice to carry out a risk analysis of what can impact the business, and create actions that reduce the risk or the impact on the business.
In March 2020, on the first day of lockdown, my friend opened her front door to a delivery of a laptop and printer. All ready for her to plug in and work from home. She just had to provide the Wi-Fi and find somewhere to sit (a few weeks later she got a desk chair!).
Her employer was ready with a plan to reduce the impact of the pandemic on the business.
Let’s look at this from the perspective of a small business.
STEP 1
Write a list of all the things that can go wrong. Get creative, after all in 2019 I doubt many of us expected a worldwide pandemic, a war in Europe or the huge increase in energy costs, we have seen in the last year.
Susan runs a jewellery making business. She buys materials from overseas and sells products online, often to overseas customers. In 2016, she had no awareness that Brexit would impact on her business, after all a lot of her customers and suppliers were outside Europe. Over time she realised there was an impact and had to quickly rethink her whole business model. Brexit turns out to have been a huge challenge to her business.
STEP 2
Take each item in turn and work out the following - based on current working practice.
· How likely it is to happen.
· The potential impact on your business.
This gives you some idea of how much effort and money it is worth investing in, to manage the risk.
By way of example, I am going to take the risk of my iPad smashing, as I assessed it when I first set up my business.
I’ve never damaged an iPad, but I have dropped my iPhone and cracked the screen (oops). My iPad is used every day and I am fairly robust with it. So, this felts like a real possibility and I scored the likelihood as medium.
Before setting up the business I tended to save documents and images on the iPad itself, this meant if it smashed all that would be lost. Without some risk mitigation I would either have to redo the work or could find myself unable to meet client deadlines. There was also the reputational risk. I scored the impact on my business as high.
STEP 3
The next step is to look at what can be done to, either:
· Prevent (or reduce the risk of) the event happening.
· Remove (or reduce) the impact on the business.
Some events we can never do anything to prevent – pandemics and war are outside our personal sphere of influence – but there is plenty we can do for a lot of issues that impact our business. Why do you think many corporate employers provide staff with private medical insurance? It’s not just a staff benefit, it also gets you back to work quicker! Sadly, this doesn’t mean your gym membership is a business expense – even though it keeps you healthier and working.
Taking my iPad example. I bought a more robust protective case – a small investment but this started to push the risk of it getting damaged, closer to low.
The area I could do more to improve, was the impact on my business. Given this was medium possibility and high impact – it needed some serious thought and justified spending some money.
The obvious solution was cloud storage. I decided to buy cloud storage that I could access using an app on my iPad and also from my laptop. The added benefit of this was that this meant I could more easily work on different devices. I had originally set up the business on the basis I would work entirely from my iPad, as I didn’t want to have documents flying between devices. Cloud storage meant I could view and access a single (and I know correct) version of a document from any device.
That one change reduced the impact on my business to low.
Risk is an essential part of our life
We cannot expect our life to be entirely risk free. Every parent wants to protect their children from danger but knows they enjoy it and must experience it to understand how they can live with it.
Running your own business is no different. It’s full of risk and that’s why many of us do it. We love the challenges and variety – it’s exciting to think on the hoof, but I’m glad I won’t have that sick feeling of dread if I drop my iPad or my laptop. Yes they may be damaged but all my business documents are stored elsewhere.
The big risk I see many are talking about
The risk I see many small businesses stress about at the moment, is the risk of a social media platform collapse. If all your marketing and customer engagements are on one platform and it closes (or shuts down your account) tomorrow – how will you cope?
It’s a tricky one and I know for many small businesses the solution is to set up a mailing list and write blogs or issue newsletters. The problem with that is that you need to be sharing something people want to read. Social media is a passive read where people read the odd post here and there – whatever catches their eye. It’s a social platform full of conversations. A newsletter hits your inbox and you need good reason to press that scroll button.
But that’s my plan.
If you’ve scrolled down to this, then maybe you enjoyed this piece. If so, please keep following and reading and let me have your thoughts. I’m planning more interesting content and look forward to chat about the world of running a small business.
Love this, so much to think about for small business owners who are often the key and only person in the business. Managing your risk!