We first talked about business continuity planning in earnest back in 2020, when we were all facing the worry and uncertainty of the global pandemic. Three years on and much has changed, except perhaps feelings of business uncertainty.
Even though lockdowns are no longer an issue and international borders are opening, the re-emergence of Covid remains in the back our minds along with a bunch of other concerns including inflation and interest rates.
Whether it’s a pandemic, war in the Ukraine, political tension with China, inflation and rising interest rates, there’s always something that’s going to throw a spanner in the works for business owners.
External matters such as these create unexpected challenges and generally threaten to derail even the best laid business plans.
Recent examples of very challenging circumstances include data breaches, attacks and hacks that have left some of our best known institutions and corporations red-faced and the personal details of hundreds of thousands of individuals exposed.
Inflation is another, the highest it’s been in over 30 years and at the time of writing, interest rates are at a level last experienced in 2012.
All these issues are beyond a business owner’s control, but regardless they must be addressed and the impacts managed.
Successful business owners understand that to succeed, they must consider uncertainty part of everyday business life. It’s better to expect and plan for it, than to be caught off-guard and fall victim to it.
Proactive financial management (budgets, forecasts and cashflow) is a business staple necessary for understanding your financial viability and opportunities in the good times and even more importantly, in the bad.
However, the real test of a successful business continuity planning is implementing it and taking action in advance that includes safeguarding your assets – business AND personal.
You’ll also need to ensure your business processes pass muster, particularly regarding data security.
While small and medium sized businesses may not hold the headlines for as long as Optus or Medicare, there will still be adverse publicity and reputational damage which will need prepared answers and actions for your customers as well as the local media.
A carefully considered crisis management plan is an investment that will pay dividends when the proverbial hits the fan.
Issues that affect businesses naturally flow on to impact employees. Having a good grasp on human resources and industrial relations will enable better and legally compliant decision making in what can be very difficult situations.
Maintaining strong relationships with your clients, contractors and suppliers as well, will likely grant you the slack you’ll need on occasions when you’re in a tight spot.
The nature of small and medium sized business is such that they often have a number of small and mid-level clients and one or two major clients who represent a significant percentage of revenue.
Business continuity planning should also factor in what happens when a major client is lost causing a sudden absence of income and the inevitable cashflow fallout.
Next steps
Make it your priority to implement your business continuity plan and make it enduring.
Consider it a ‘live’ document that provides the must-haves for what-if situations now and whatever happens next.
We’ve said it before, and we’re saying it again now… business continuity planning won’t prevent difficult business circumstances happening, but it will help alleviate some of the stress associated with uncertainty and provide options following setbacks that will enable a rapid recovery and return to profitability.
Everyone is time poor, so set yourself a realistic goal by starting with the basics which will include planning to protect assets, cashflow, ensuring access to finance, clear HR and IR policies and sound client/stakeholder communication.
Importantly, get help. Enlist the help of others in your business leadership team or advice network. In addition to sharing the load, it will provide perspectives and insights different from your own.
May we also invite you to take advantage of our ‘professional sounding board’ service which provides opportunity to talk through various options, and access to qualified advice and our more than 30 years experience guiding business owners through the highs and lows of business.
Core Business Accountants specialise in business advice for growing and mature family-owned and small and medium-sized businesses. Please contact with us on (07) 5438 8088, email mail@corebusiness.com.au or visit www.corebusiness.com.au.
