Building Resilience is About Preparing for the Unexpected

Even with careful planning, challenges can, and often will, come out of nowhere. Anything can happen, from losing a major client to illness or even cybersecurity threats.

Resilience is about preparing for the unexpected. It is about having plans in place so your business can survive and recover quickly if something untoward happens.

In your first year of business, you are considerably less likely to be able to recover from a disaster. In fact, in those first few fragile months, an incident that a more mature business could take in its stride could be a major issue, and sometimes even enough to push you into insolvency.

So, resilience really is your safety net. That means planning for disruption.

1. Diversify Your Income

Relying on one client or one product line is risky for any business, but in the first year, it is capable of pushing one to the brink of financial disaster.

Spreading your customer base and revenue streams reduces vulnerability, but that isn’t always easy with the limited resources a new business often has to work with. So you may need to look to diversify your income over a range of reliable customers as part of your business-building process. It’s not easy, but you should look to avoid the single-source income or one main customer traps.

 
Tip: Aim for no single client to represent more than 25% of your total income and to always have second supplier options.

2. Plan for Disruption

We all know you can't expect every potential problem, but you can try and foresee as many as possible and know what to do if they happen. Often, when a crisis arrives, speed of response is key to your survival as a business.

• Identify potential risks and have a plan in place should they happen.
• Think about areas such as supplier failure, IT issues, illness and anything that would affect a crucial system for your business.
• Once you have identified the dangers, create contingency plans for each.

While you can’t always be ready for every possibility, if you plan for most of them, the chances are that you will have at least a partial response for something similar. For example, nobody expected the COVID-19 lockdowns, but certainly, initially, the resilience plan for another potential issue, for example, a temporary shutdown due to a problem with uninhabitable premises, would have readied you for working from home to some extent. One resilience plan often supports another by having the same general response. 

Tip: Document carefully what to do and how to continue serving customers during a range disruption. It needn’t be complex, in fact, the simpler the solution, the better.

3. Protect Your Data and Systems

Cybersecurity isn’t just for large firms, and 100s of thousands of SMEs are hit throughout the UK each year. You should always use strong passwords, backups, and antivirus software to protect your systems and make sure you keep them up to date.

Most importantly, regularly train yourself and your team on data safety. There are all sorts of courses available, often free or for a small charge, which will help keep you in the loop. This is a fast-moving and often seemingly incomprehensible area, so you will need to trust the experts and avoid trying to go it alone.

Tip: A cloud backup can save your business if your systems fail. You will need to be able to get things running again as soon as possible and also have a plan to cope while the system is down.

4. Keep Communication Open

If problems arise, be honest with customers, suppliers, and staff. Most people appreciate transparency and will work with you to find solutions. Remember to deal with any compliance issues as well.

Tip: Communicating early can preserve relationships even during setbacks.

Disasters do happen. In fact, it’s quite rare to see a mature business that hasn’t gone through some sort of major issue at some point. The more you are ready for a problem, the closer you will be to offsetting the flood of issues it could cause.

Sometimes, just the act of being prepared is halfway to keeping your business running in adversity.