Managing Key Business Issues
Tue 11th Dec, 2012
A wide range of potential risks exist for all business but good management & contingency/disaster recovery planning can significantly reduce them. Following are some actions you can take to minimize the risk you face.
Insurance Cover
Check that your business has adequate insurance cover, such as public liability, professional indemnity & director's insurance. Any claims to your business could severely impact on its financial survival.
Asset protection & business disruption insurance can also be critical to protecting assets & revenue if your business is hit by a disaster such as a fire, flood, virus or earthquake. Make sure your insurance payments will be made on time so no loss of cover.
Premises Protection
Major problems with your premises can be both disruptive & expensive, so take steps to secure your premises. Common problems include failing to act soon enough when a lease is due to expire, or being caught out by large increases in rent & rates. If location is vital to your business, consider buying the premises to secure your position.
Cash Flow Management
Monitor your cash flow closely & use a cash flow forecast to manage your business. The more you are aware of cash flow peaks & troughs, the more time you have to deal with them. If additional funds are required then your cash flow analysis will assist your application.
IT Systems
Make sure your computer systems and the data stored on them are secure. Make regular backups so you can restore data if your system crashes, & store at least one set of backups off site. Have you thought of storage 'in the cloud'. Check from time to time that you can restore data without disruption. Develop 'Plan B' systems that will allow you to carry on working if an IT issue occurs.
Customers
Your customers are your business. The following steps can help reduce risks to your revenue:
- Diversify your customer base to avoid excessive reliance on one or two key customers.
- Concentrate on winning & keeping 'the right' customers.
- Continually improve your understanding of your customers and the competitive environment so you can refine your marketing plans and take advantage of new opportunities.
- A mix of both loyal and new customers significantly reduces your risk.
- Reduce the likelihood of disputes and litigation by using contracts and agreements, and follow correct procedures. Clear, concise communication.
- When disputes do occur, seek expert help.
- Manage international risks if you plan to export or import. Get expert advice about international markets and trade finance.
Your Employees
Do you have one key employee? Share knowledge and skills to avoid relying only on that one key employee. Train your staff in key areas of your business. Procedures, in clearly written operating manuals can improve quality, speed up training & allow staff to cover for others on leave. Make sure staff know your Disaster recovery Plans e.g.who is responsible to grab the backups as they leave.
