You might need more than a Plan B

Words of Wisdom – March 12, 2025

Why Your Business Needs More Than Just Plan B

I hope everyone in SE Queensland who was affected by Tropical Cyclone Alfred is safe. It felt COVID-ish with the supermarket shelves empty of essentials and the feeling of the unknown.

I wonder what our friends up North thought of our behaviour because they experience TC’s on a regular basis.

What I did see was humanity coming ahead of commerce as neighbours helped each other prepare for the worst.

So just like in the Pandemic, people were affected differently. As I looked out of my home office window it looked like a windy miserable day. Others were not as fortunate and are now looking to rebuild what was destroyed.

We had plenty of warning to prepare but when I went shopping I was unsure of what to buy (if I could find anything). I didn’t want to go silly and buy 12 months supply of toilet paper, but equally I didn’t want to be left without essentials and food.

So I made a list. Water, things I could eat if there was no power or gas, a few days worth of vegetables and protein, and batteries.

The water and power were on the whole time so the anticipated interruption was averted.

The shops have reopened and are slowly restocking so my weight loss program has also been been averted :-)

The only thing that I can complain about was the internet was sluggish - I know - First world problem.

In non-disaster times, when I talk with businesses their focus is typically on revenue and expenses, which is natural. But the recent ‘business interuption’ got me thinking about the ‘risks’ that are often overlooked or ignored. At least until a disaster highlights the lack of preparation.

So I thought you’d appreciate a series of thoughts and strategies around Risk Mitigation. I have received a lot of positive feedback on the Working ON your Business not IN it series so why not continue in a similar vein.

The one caveat I will put on this series is I am not an insurance advisor or a security expert, so the disclaimer is before you make any changes to your business you ask for specialist help.

Here are the headline topics I’ll be covering over the coming months. If I’ve missed anything let me know.

And the topics will be covered in the traditional thinking and I’ll add a Human-Centric Wealth Innovation bent.

Natural Disasters

Whether it's floods, fires, or cyclones, natural disasters don't generally give you too much notice. Beyond immediate physical damage, these events can disrupt business operations for weeks or months, strain cash reserves, and test client relationships.

Economic Shock-waves

Interest rate and market fluctuations are somewhat predictable as are regulatory changes. These events usually cause planning problems because of the uncertainty. The real life impacts are on margins and increasing costs.

I would add geo-political issues like tariffs have a lag effect on exports and importing supply chains.

The Success Syndrome

Not often considered is the impact rapid growth can have on a business with unintended consequences. That big contract you've been chasing, or hitting pay dirt in a niche, could sink you if you're not prepared.

Here are a few problems that surface from the allure of big profits.

How will the increased volume of product impact quality?

Is there funding available to stem the cash flow drain on the input/output process?

Will your Workforce Plan be able to allocate people to the increased production without burning out staff?

And the one that has disastrous long term reputation impact is neglecting your loyal long term clients over the whale opportunity. Whales come and go. Loyal customers stay because you care.

Digital Disasters

With an increase in AI is an increase in Cyber attacks. You might not be in the firing line of the hackers but you could be collateral damage if one of your customers or more likely, one of your suppliers, is hit.

System failures or data breaches aren't just IT issues anymore. They have the obvious and immediate financial loss.

The reputation damage becomes another emotional stress point for the owner.

Supply Chain Disruptions

I briefly mentioned this earlier. Global shipping delays to local suppliers impact your supply chain. The chain is only as strong as its weakest link.

Consider procurement processes that calculate the impact of production delays on costs and customer satisfaction.

The cheapest supplier may not always be the most appropriate.

Key Person Risk

When key staff leave, depending on the circumstances, it can be a very traumatic time for the owner.

“What did I do wrong?” or “What can I do to make you stay?” These are typically asked when the employee drops their resignation on your table.

The cost of losing a key person adds between 32% and 224% of the FTE total remuneration costs, straight off the bottom line.

I know a lot about this as I worked with large organisations as a Human Resource Business Adviser for 7 years. The cost includes the lost institutional knowledge, disrupted client relationships, diverting management resources, and increased pressure on remaining team members.

Regulatory Blindside

It seems that the regulatory framework in Australia is getting a little out of control.

This is not a political statement, it’s a sign of the times. So whilst the Government, Unions, and Industry duke it out, I suggest you take special care of your employees.

Covering your Statutory obligations is a given. It’s a business cost just like taxes. Ignoring them or trying to game the system requires really clever professionals who work hard to find ways for you to limit your expenses. And you pay handsomely for that clever advice.

Why not invest what you pay these professionals into your staff. In my experience that’s a far greater ROI. Just saying.

Financial Safety Nets

This is probably the most important of all the risks.

Know what benchmarks and metrics to hold in your business seems obvious, but it’s not often done.

If you have a dashboard that gives you readings on all the various aspects of your business, not just financials, then I’d love to have you on my Podcast. It’s rare.

I’ve spent more than half my career working for or with larger institutions, and they have exactly the same issues as smaller businesses. The difference is they have deep pockets and their resource pool is larger.

Ironically when the shite hits the fan, their go to strategy is getting rid of people. It’s quick, easy, and cost effective. It protects the management, but it’s not smart.

Fortunately or unfortunately time is the key here. Plan and start as early as you can.

Over the coming weeks I’ll be focusing one topic per week and putting my spin on how I have handled these situations, or what I have observed as strategies to mitigate the risk.

And I’ll be looking at how a Human-Centric Wealth Innovation strategy can be used to find a better outcome.