10 Tips to Avoid Business Disaster
Got a business plan in place for disaster striking tomorrow? What would you do if your company suffered a ransomware attack? Did anyone draw up a contingency plan in case of a tornado, hurricane, or earthquake? The unexpected can happen anytime, and small businesses usually get hit particularly hard.
Small businesses represent the backbone of many economies. They remain critical for job creation, innovation, and community development. That being said, running a small business comes with significant risks, including financial uncertainty, market volatility, and natural disasters.
60% of small businesses fail within 6 months of falling victim to a cyber-attack.
Small business owners must prepare for the unexpected to ensure their longevity and success. We at NoContractVoIP serve the small and medium business community, so let’s discuss some tips to help small businesses get ready for anything.
Tip 1: Create a Contingency Plan
Preparing for the unexpected means creating a contingency plan. A contingency plan offers a set of procedures to help a business respond to unforeseen events. These include natural disasters, supply chain disruptions, or unexpected financial setbacks.
The plan outlines the steps the business will take in the event of an emergency, including who will be responsible for what tasks. In addition, it covers communication methods and channels with employees, customers, and suppliers.
Tip 2: Maintain Adequate Insurance Coverage
Small businesses must maintain adequate insurance coverage. Just consider it one of the costs of doing business. Business insurance protects them from unexpected events. Insurance policies must include things like:
- Liability coverage
- Property damage coverage
- Business interruption coverage
- Data breach costs
Business interruption coverage represents a particularly important piece of the puzzle. It can help cover lost income and expenses during a disruption such as a natural disaster or supply chain disruption.
One of the newer types of policies offered today is cybersecurity liability insurance. In today’s threat landscape, cybersecurity has become an important consideration. Cybersecurity insurance covers things like costs to remediate a breach and legal expenses. In addition, the requirements for the policy ensure that your cybersecurity measures remain reasonable.
Tip 3: Diversify Your Revenue Streams
Small businesses that rely on a single product or service run greater risk. Unexpected events cause them significant harm. Something like a raw material shortage cripples an organization without alternatives.
Diversifying your revenue streams helps reduce this risk. This diversification ensures that your business has several sources of income. For example, a restaurant might offer catering services. A clothing store could sell merchandise online as well as its physical location.
Tip 4: Build Strong Relationships with Suppliers
Small businesses must build strong relationships with their suppliers. These strong relationships ensure that they have a reliable supply chain. This social work is particularly important for businesses relying on one supplier for their products.
In the event of a disruption, having strong relationships matters. It mitigates the risk of a supplier bankruptcy or supply chain issue. Having supplier options also helps reduce the impact on your business.
Tip 5: Keep Cash Reserves
Smart small businesses keep cash reserves to help them weather unexpected events. Cash reserves help cover unexpected expenses such as repairs, legal fees, or loss of income. As a general rule of thumb, businesses should keep at least six months’ worth of expenses in cash reserves.
Tip 6: Build Strong Outsourcing Relationships
If business owners try to do everything in house, they put themselves at higher risk. For example, if a key IT team member quits, everything might grind to a halt because the company faces major security issues.
Build strong outsourcing relationships with an IT provider and other critical support services. If something happens to a company’s staff or systems, they have a safety net.
Tip 7: Check Your Financials Regularly
Small business owners should check their finances regularly. This is to ensure that they are on track to meet their goals and to identify any potential issues early on.
This includes:
- Tracking income and expenses
- Creating and reviewing financial statements
- Regularly meeting with a financial advisor
Tip 8: Invest in Technology
Investing in technology helps small businesses prepare for unexpected events. For example, cloud-based software allows businesses store their data off-site. This geographic distance ensures that it is safe in the event of a natural disaster or cyber-attack. Technology also helps businesses automate processes. Automation reduces the risk of errors and improves efficiency wherever applicable.
Tip 9: Train Employees for Emergencies
Small businesses must train their employees for emergencies. This training helps ensure that everyone knows what to do in the event of an unexpected event.
This includes training for natural disasters, cyber-attacks, and other emergencies. Businesses must also have a plan for communicating with employees during an emergency, in addtion to ensuring that everyone has access to the plan.
Tip 10: Stay Up to Date on Regulatory Requirements
Small businesses have to stay up to date on regulatory requirements. Keeping up with those regulations ensures that the company remains compliant. These include tax laws, labor laws, and industry-specific regulations. Non-compliance can often result in fines, legal fees, and damage to your business’s reputation.
In conclusion, small businesses face many risks. But by following these tips, they can prepare themselves for the unexpected.
Why Is This Published By A Business Phone Company?
Here at NoContractVoIP, we believe that your success creates our success. And, since we specialize in business communication, we work to help you communicate better while staying safe. We create the cutting edge communication systems that modern companies need. And we geek out on tech stuff, so we study it for you.
To talk to a business phone system specialist and never worry about any of this again, call 866-550-0005 or contact us today.
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