Week 6 - Armoring Your Small Business Against the Unexpected

Armoring Your Small Business Against the Unexpected

If your small business is like most others, you're running it very close to the edge. It's just the nature of the small business game. And that means that your small business is potentially just one unexpected problem away from failure. Although you can't foresee the unexpected, if you get started now, you can armor your small business against it, even if you don't have a lot of money to work with.

This is often done on the doorsteps of war, training as you fight. Military leaders go through great lengths to make training as realistic as possible to prepare these warriors on what's to come, going as close to the edge as humanly possible. Even when going through these great lengths, nothing can prepare you for war except war! The battle hardened soldiers are sought out for their experience and training capacity. Those elite few sharing their methods often shed light on topics unknown during the training pipeline. The same thing is true for small businesses, seeking out individuals who have been through the fire are often great council for the unknowing.

Invest in Your Employees

When times get tough, economically speaking, it's more important than ever to do everything you can to stand out from your competitors. The easiest way for a small business to do this is with superior customer service. You need your employees to really go above and beyond, and you might need them to do that with reduced hours or pay cuts. The only possible way they will put up with such circumstances is if you have cultivated a strong, trusting relationship with them.

So you should start working to build trust with your employees now. Keep them in the loop when it comes to changes and developments in the business. Let them know what to expect, and give them time to give you feedback. When they have problems, do what you can to be flexible and help them work through them. In other words, make them feel they have a real stake in your company, a future with it, and they'll be more willing to do more during an emergency.

Read Trade Journals

Another good way of protecting your business from unexpected problems is to try to catch them before they become too big to handle. One of the best ways of doing that is reading the trade journals for your industry. That will give you an idea of problems that other people have spotted, trends that could become problematic in the future, and so forth.

Network

For the same reason, you should have contacts with other professionals in your industry. Talk with them regularly. You could find yourself in possession of advanced warning of a problem you are unaware of.

Hold Contingency Meetings

Hold a contingency meeting once a quarter. Invite everyone in management, an employee representative or two (or all of them, if your business is really small), and your accountant. Use the meetings to make your best guesses at what the near future is likely to bring. Make contingency plans for the likely events. You should even make contingency plans for some unlikely but possible events. These plans will help your company respond more quickly and effectively to problems.

Make an Emergency Fund

You need to make an emergency fund and keep adding to it regularly, no matter how little money you have to work with. At the very least, dump the change from every purchase into it. Even better, deposit some part of your profits every month. It may never contain a huge amount of money, but if problems come up, you may need every little bit you can scrounge together.

The Takeaway

Unexpected problems can sink any small business. However, when you invest in your human resources, save what money you can, and take the time to spot trouble before it starts, you've armored your small business as well as you can against the unexpected.

Here at Proven Valor I spend most of my time talking to small business owners about the other side of problems and how we get through them. Revenue is down, lest brainstorm and alternate methods. Process are bad, let's make some that get the job done and can't be destroyed later on. These are merely conversations about business failures I have already been through and more. Send me an email at [email protected] and lets have a conversation.