With the Christmas holidays approaching, for those who have the opportunity, it is a good time during the holiday season to step out of business and have look at your business. Take a step back, review how the business is working (review how you work in the business!), what are your goals/ambitions for 2026 and look at some common problems/issues that arise. One common area we discuss with our business clients on a regular basis is the resiliency of business owners and building a resilient business.
Business owners have had a lot to cope with over the last few years with the Covid pandemic, cost of living, change of Government, difficulties with finding employees etc. The ability to anticipate, adapt and respond effectively in these changing times, means being resilient has become an essential part of being a business owner, particularly in the early stages.
With the Christmas holidays approaching, for those who have the opportunity, it is a good time during the holiday season to step out of day-to-day business and look at practical ways to prepare your business for whatever the next issue/crisis is. We have set out a few areas that should be covered in this review.
Look forward and plan for what risk/issues there are to the business - Regularly run “what if” sessions with your senior team and/or advisers to explore different possibilities for example – what if a key supplier starts to fail, a major customer pauses orders, or a cyber breach of your own, potentially locking you out of critical systems or data.
For each scenario, identify where your business is most exposed, how you would respond and what early warning signs to watch out for, or if any defence mechanism can be set up.
CRISIS MANAGEMENT & COMMUNICATIONS PLAN
If you have a disaster strike, you don’t want to be delaying or improvising at this time. The situation will need clear leadership and calm communication will be vital.
A written crisis plan should outline a chain of command, internal and external communication procedures and pre-aged emergency actions. This could include shutting down systems, switching to manual processes, alternative means of communication and even relocation of staff. Having a structure ready protects reputation and confidence with staff, clients and suppliers when the pressure is on.
STRESS-TEST YOUR CASH FLOW
Many businesses collapse because they run out of cash partway through a crisis. Maintain a rolling cashflow forecast and running stress tests - for example, what happens if revenue drops by 25% or ou lose a major customer, or raise costs. Would you survive… and for how long?
Negotiate contingent credit lines or flexibility with your bank, ready to draw when needed, and build a reserve to provide breathing space. A strong cash position buys you time and options when you need them most, but it easier to borrow when the business is doing well, as opposed to when in the middle of the problem.
DIVERSIFY YOUR BUSINESS
Over-reliance on one customer or supplier can leave a business exposed, if the key customer, or supplier falls into difficulties, then this will have a “knock on” effect. Develop new client relationships, use multiple suppliers (where applicable and explore new markets. Even modest diversification can make a big difference.
CYBER & IT SECURITY
Recent cyber-attacks on larger businesses like JLR show that cyber resilience is now fundamental to business continuity. Use multi-factor authentication, keep systems updated, restrict internal access and back up data both in the cloud and offsite. Make sure you train staff to recognise cyber/security risk , and other IT risks.
REVIEW CONTRACTS
Contracts often go unread until a problem arises. Ensure key agreements include fair force majeure and renegotiation clauses and that liability and risk are clearly defined. Employee contracts should also allow flexibility in emergencies such as remote working or temporary role changes.
BUILD AN AGILE CULTURE
Resilience is as much about people and mindset as processes. Encourage open communication, empower quick decision-making and review performance after every disruption - however small.
