If you have managed to keep your business afloat through this pandemic, you have probably learned valuable and critical lessons about adaptation and business resilience along the way. But even businesses that have managed to maintain a consistent cash flow may be wondering how they can prepare more effectively for whatever disaster strikes next.
But the answer isn’t so cut and dry and will differ from one business to the next. With that said, there are some general steps all businesses could take. The following strategies could help you make smart and quick decisions to weather the covid-19 pandemic and beyond more effectively.
Understanding Business Resilience
This refers to a business’s ability to endure unanticipated negative events like natural disasters, pandemics, supply chain interruptions, and economic recessions. Since they plan, resilient businesses could more efficiently adapt and respond to unexpected events and mitigate the imminent harms they may face. Below are crucial steps to take now so you can ensure improved business resiliency.
Create, Implement, and Test Your Business Continuity Plan
A BC or business continuity plan entails creating, implantation, and regular testing of certain business systems. This will help your restaurant franchise resume its core unction quickly after disruptive incidents. In general, your BC plan must include these key elements:
This involves a realistic and in-depth assessment of the business’s external risks and any potential vulnerabilities within your business. Evaluating these risks and their possible outcomes would help you plan your next moves more appropriately and enable you to respond faster when and if negative events occur.
BIA or Business Impact Analysis
Performing a business impact analysis will entail an exhaustive inventory of all business activities. Once done, you’ll need to identify the highest priorities in meeting clients’ requirements and satisfying contractual and legal obligations. You should then determine how disasters could negatively affect your high priority operations so you could craft more effective risk reduction strategies.
Strategies For Business Continuity
With the data you obtained through your BIA and risk analysis activities, you can create a contingency plan for maintaining critical business operations when negative events occur. Your plan must address how you’ll communicate with employees, customers, and suppliers, obtain inventory, provide customer service, and maintain cybersecurity during these various crises.
Build Your Financial Awareness and Resources
Below are crucial ways to help protect your business during times of economic hardship:
Create Your Emergency Savings Fund
In general, your business must have sufficient savings for covering three months or more of your operating expenses. Allotting five to 10% of your business’s income towards your emergency fund would provide a cushion that would enable you to keep your business running.
Research Available Federal, State, and Local Financial Resources
There might be funding sources your business could leverage at the federal, state, and local levels if a national or regional disaster strikes. Knowing about these financial resources and programs in advance would help you feel more empowered to secure funding for your business.
This pandemic will be over someday, but it’s also possible that you’ll be faced with other major crises at some time in the future. Fortunately, any steps you can take in preparation for potential crises will make your business capable of weathering any storm.
To sum up, your business resiliency strategy must include a well-planned business continuity plan, backup funding resources, and a rainy day fund. Armed with these vital tools, you increase your business’s chances of surviving and perhaps even growing throughout any major crises.