Having a small business doesn’t mean you can’t dream big. Whether you’re trying to get your small business up and running, or are looking for ways to grow and strengthen it, we want to help. In the Small Business Big Dreams series, we provide a number of articles and videos that give some tips and insight into common problems small business owners face.
It takes an incredible amount of time, money and resources to open a small business. You put together your business plan, found the perfect team to support you in your venture and have established a solid foundation to get it up and running. But in the event that major setbacks occur, do you have a plan in place to help guide you through them?
Budget for the Unexpected
Disasters can come in various forms: a top sales person leaving, a storm knocking out power for days or simply just not being able to turn a profit for a substantial length of time. By establishing an emergency fund that covers all aspects of the business for six months (including employees’ salaries and benefits), you put yourself in a position to keep your business afloat while you search for a solution.
In the event a setback does occur, you’re going to need to make up for lost revenue in the interim to keep operations running. One way of doing this quickly is denoting which items in your budget can be cut at the drop of a hat ahead of time. Review your budget line-by-line; labeling each as “need to have,” “would be nice” or “not vital.” Those labeled “not vital” can be cut promptly during these times. Use your discretion for those labeled “would be nice.”
Sudden loss of revenue is one thing, but what about if your assets are stolen or damaged, or if your business experiences a public relations nightmare? For the former, have a security plan in place to protect your assets. Don’t put yourself in a position to be vulnerable to confidential data breaches or property theft. For the latter, designate a point person to do all the talking with the media. This unifies the company voice. You can even implement a social media policy with all employees so that you’re all on the same page in regards to what type of behavior expected.
As problems arise, you’ll need to decide whether or not it’s an isolated issue with one solution, or part of a network of problems that will require an overhaul in your business strategy. If it’s not obvious, it may be wise to ask the advice of a trusted 3rd party. It’s important to note that at this stage, your business should not become stagnant. Continue welcoming new innovations from your team, keep pursuing new leads and continue to market it.
In the event that a chronic problem becomes evident, you’ll need to review your business strategy and adjust your goals and procedures as necessary. This might mean postponing new hires or the plans to expand your operation, and setting new, attainable goals while you’re in recovery mode. As hard as it is to accept, in order to keep your doors open in this scenario, you’re going to have to operate your business as it exists at that time, not at the pretense of where it ought to be.
Facing disasters is an inevitable part of being a small business owner, but developing a strong contingency plan will put you in a better position to minimize damages when they do strike. With expert advice, a proactive mindset and a 6-month emergency fund, you’ll be equipped to weather most any storm that comes your way.