What is a business crisis?
Business crises can come in many forms. From simple things like an important member of staff stepping down, to major global events, here are the sorts of scenarios that every business should be planning for:
Natural crises create the most obvious need for an emergency response. You’ll firstly need a plan to ensure everyone’s safety, before considering who’s in charge of what, what to do if your premises become unusable, and how you’re going to communicate. Other important considerations are things like backing up important data off-site, and of course, insurance.
Did you know that UK small enterprises are targeted by around 65,000 cyber attacks every day? Fall foul of one of these crises, and you won’t just have the cost of downtime to deal with. The reputational damage of keeping customers waiting can be catastrophic for SMEs. There may be regulatory fines to deal with, too, if customer data is exposed. Strong security, company-wide training, and business disruption planning are your key defences here.
This type of problem is often overlooked in a crisis management strategy, but can be just as detrimental to business continuity as a flooded warehouse or IT failure. The key to a smooth transition is a good company culture. One where transparency, shared responsibility, cross-training and trust ensure your people want to, and are able to, step up and plug the gap while a longer-term response is sorted out.
A business financial crisis can also take a few different forms. Perhaps an investment in an asset or new premises hasn’t paid off – consider selling or downsizing. Maybe you’ve got tangled up in bad debt – better credit control or a legal response could help here. Or perhaps there’s a load of obsolete stock you can’t sell – if you’ve tried a few different pricing strategies, it’s probably best to dispose of, recycle, or donate the stock, and write off the balance sheet instead. However, tread carefully. In avoiding one financial crisis, you might accidentally cause a PR crisis instead – as Burberry did in 2018.