How to Manage a Business Crisis
The UK is facing its longest recession on record. With this crisis looming, uncertainties about business safety are rife, and industries such as real estate are being hit the hardest. As such, business owners are looking for new ways to handle financial troubles and keep consumer engagement high.
Identify your key areas
Business crises often occur unexpectedly, throwing your business into turmoil. However, this doesn’t mean you cannot have in place methods which reduce the negative affect this will have on your business in the long term. Identifying key problem areas during a crisis can also help you prioritise actions to ensure the safety of your business.
Identification of your business weakness can – and probably should – come before you experience a moment of crisis. This will not only help resolve potentially catastrophic pitfalls, but it can also identify opportunities for improvement during prosperous business periods. Perhaps your data management is poor, leading to clients and customers not receiving the best customer service or you might have staff who lack key training, leading to increased overtime to correct mistakes. Though you can’t always predict when a crisis will impact your business, identification of key areas will give you the ability to be more dynamic in your response to sudden issues, so you can react decisively when necessary.
Focusing on your company’s finances is important as you undergo a business crisis. Consistent financial reporting will give you an oversight of your company’s spending and profits. With analysis of this data, you’ll be better equipped to see where you can rein in expenditures and which money-saving strategies might work best for your business. This will not only save you from costly business risks, but it can reassure investors even during difficult periods.
By saving money on risky deals, you can reserve your money. According to Starling Bank, a company should have three months of working capital in reserve. This will cover negative cashflow problems which might come about through a period of sudden business crisis and low customer interaction. The more you have in reserve, the more protection you put in place for your company. This is particularly crucial during slower months, such as during the winter period or during an energy shortage, as some industries struggle to operate efficiently.
Efficient training is crucial for the recovery of your business after a crisis. This can be anything from pre-planned business continuity training to industry-specific safety training, for example, bolt tensioning training within construction. Having these training schemes in place before a business crisis means that your company is more robust in the face of difficulties and can get back to work as soon as possible. You can trust your staff to work efficiently, including without supervision, in the case that senior staff within the company are needed elsewhere.
This also means that you don’t have to worry about the issue of onboarding new staff in the event of a business crisis. Instead, your well-trained staff can get operations up and running, focusing your company on future growth and recovery, rather than re-establishing itself. Senior leadership will also have training in place to help support junior staff, meaning that they can handle the crisis with as little disruption as possible, allowing operations to start again efficiently.
During a business crisis, you should take ownership of what is happening. While not every business crisis can be under your control, your attitude towards it must be maintained. Positivity and responsibility are key to getting through troubling times. If you can take accountability for any issues that have arisen, you will be able to address them properly
By embracing the challenges, and positively looking for corrective measures, you will stand a better chance of coming through it. And this will help your reputation with your customers too. Consumers are now looking for honest branding, with 88% wanting to purchase from brands which promote authenticity.
Managing a business crisis can often be difficult, but prevention measures can prepare you for the worst from the offset. By understanding your business inside-out, including your financial position and areas of weakness, you will be able to establish a stronger foundation for your company. Ensuring strong cash reserves, thorough training and safety procedures, and an honest approach to business matters can help when a business crisis strikes.