Chairman, Federation of Small Businesses
Over the last six months, the Federation of Small Businesses (FSB) has helped businesses through challenging times. Here’s how to protect your firm.
COVID-19 has turned the world on its head, hitting the economy the hardest. Many small businesses, which spent years building up a brand, saw trade ebb, dip then crumble overnight, leaving them in a fragile state. These are unprecedented times that nobody saw coming. But they have highlighted the importance of future-proofing your business.
There is no one-size fits all approach to risk management because every business is different. Small businesses are resilient, but resilience means nothing without a business continuity plan (BCP), which could help mitigate some of the effects of business disruption, even in a global emergency. Creating a BCP will allow entrepreneurs to identify any potential risks and can help a business recover from uninsurable threats.
What can I do? Points to consider:
· Building timescales to ensure IT software gets back on track quickly.
· Ensuring facilities can be relocated or rebuilt quickly, should a crisis mean office working is no longer viable. This sends a powerful message to customers, reassuring them they will never be left uncertain or under-supplied.
· Secure business insurance to help cover the costs of property damage and liability claims.
Some of the most common causes of business failure are bad debts caused by negative cash flow, late payments, business rates, taxation and access to finance. Businesses should always ensure invoices go out on time and are correct. Check the date and time payment is expected and know who to contact should it be missed.
Many small firms have developed a new social media presence and marketing campaigns to attract customers during the lockdown.
Think outside the box
Many businesses mitigate risks instinctively by thinking outside of the box. During lockdown, FSB research shows that 16% of small firms began offering, or increased their existing, online services. Having a social media plan also allows businesses to reach a new spectrum of customers. Many small firms have developed a new social media presence and marketing campaigns to attract customers during the lockdown.
In addition to increased digital engagement, many businesses started offering completely new products or services. Pubs started offering takeaway meals, factories created PPE, gin distilleries made hand sanitisers and greengrocers started doorstep deliveries.
It was that kind of spirit that gave many a source of income at a time where hope was low and fear for the future was high. And, with local lockdowns now a new reality for the UK, it is precisely this kind of ingenuity that will help keep businesses afloat should another pandemic arise, alongside targeted government support.
Build a network
Finally, the importance of having a solid network of support to fall back on during a global crisis cannot be overstated. Joining an organisation designed to help businesses mitigate these risks, speaking to experts and others in similar shoes is one of the most valuable ways a business can arm itself against whatever the future holds.