Five ways to improve business resilience

Builders’ merchants and hardware stores often count on bountiful periods to see them through quieter times. While this approach is effective in many sectors, a single external shock or internal crisis during a busy period can be lethal for a small business. Unexpected events can slash sales or leave you with critical supply shortages that leave your business on its knees.

It’s impossible to plan for every eventuality, but taking steps to improve your company’s resilience to shocks is pure common sense. A business continuity plan (BCP) is what many larger companies create and use to understand risks and mitigate their effects. Most small businesses won’t want (or need) to create such formal plans on such a huge scale, but even the smallest retailer should consider how they’d react to business disasters. These might include:

No employees being able to get to work for one day, or several days (due to flooding, wintry weather, etc.)
A data breach or theft of PCs/hard drives
Persistent power outages
Reputation hit in press/on social media
Severe structural damage to store or warehouse

How can you seek to increase business resilience and reduce the impact these disasters might have?

#1 Diversify your supply chain

If you rely on only a handful of suppliers for the majority of your goods, consider assembling a list of back-up suppliers who you can count on if something goes wrong at one of your main suppliers. Take your time to research your options – look at price, quality and delivery times. If one of your suppliers shuts down with no warning or unexpectedly runs out of stock, you don’t want to be looking for new suppliers while you’re panicking. Plan ahead, and all you need do is call the relevant backup supplier when a problem arises.

#2 Train staff

If one of your most valuable staff members decides to move on, you’ll probably only have their notice period to figure out how to replace them. Finding an employee with the experience and skills of the departing staff member can seem an impossible challenge. However, if you make the effort to train your staff and expand their skillsets, they’ll be able to help fill in and give you a little more time to secure a permanent replacement.

#3 The cloud

Consider moving business data to the cloud, where it’s almost certainly going to be more secure than if you stored it on a hard drive at your premises. Alternatively, carry out regular backups so that company data is safe even if your hard drive becomes damaged or corrupted.

#4 Have contingency plans in place

It’s best to have written plans in place for some of the most damaging crises. For example, if you lose electricity, how will you process transactions? Will you have a generator in place or will you have to revert to old-fashioned methods? Who will take steps to contact the supplier to find out when the issue will be resolved?

#5 Consider worst case and best case scenarios

Don’t just plan for negative shocks, but also the best case scenario. What will you do if there’s a sudden demand for a certain product or brand? Figure out the quickest way of contacting suppliers and how you might fast-track any deliveries. Again, a list of back-up suppliers will come in handy here.

Ultimately, responding to a crisis effectively requires good quality information. If your records aren’t up to scratch, consider upgrading your retail software. Your new software should make it quicker and easier to manage your business and prepare for unexpected events.