Originally published on March 24, 2016 @ 5:07 pm
The business world is filled with uncertainties and risks which can rock the boat at any point in time. It is the duty of any entrepreneur to prepare for such circumstances which may threaten the existence or the future of the business. In the business plan, it is expected that the challenges which can limit the success of the business be identified as well as proffering the mitigating factors.
An effective theory is the adoption of a model in business continuity management. Business continuity management is a plan in place which ensures the continuity of a business in the short run and on the long run. Some big enterprises have a dedicated unit of experts overseeing the management of the continuity of their business.
Some of the factors to be considered for effective continuity management are anticipated risks such as:
1. Burglary incidence: Due to the poor security of the current realities, armed robbery incidence have become a recurrent evil. Some business folded up in just one incident because there was no continuity plan in place. In drawing up a business continuity strategy, this factor should be considered and factor in a way to lessen its effects and ensure the continuity of the business.
2. Fire outbreak: In the event of a fire incidence what will happen to the business? Does it mean it is over? A good business continuity strategy will mitigate the damaging effect of fire outbreak to ensure the business does not die.
3. Low patronage: Business is filled with ups and downs, there are times of high patronage and there are also a time when the patronage will be very low. A good business continuity plan will prepare for any of these occurrence and manage the available resources with an open mind. Low patronage can lead to inability to meet up with operational cost and paying of workers’ salaries which may threaten the existence and future of the business.
4. Organizational conflicts: Conflicts can happen at any time. It is part of human
relationships and if not managed properly can mark the end of a great business empire. It takes a great leadership skill to manage human resources and care should be taken on policy making to avoid conflicts that could threaten the continuity of the business. What happens if all your workers decide to resign same day? It is not necessarily the end of a business, sometimes it is good to anticipate the worst case scenario.
5. Government legislation and policies: Sometimes government policies and legislations can be a threat to the continuity of a business. Do you have to close shop because an adverse law was enacted? What makes a great business continue to thrive is the ability to anticipate a challenge and prepare a way out; that is what good business continuity strategy does.
6. Accidents and infrastructure decay: Accidents can occur at any time, although some can be prevented but in the event of one happening a business does not have to end. It is very crucial to factor this into the business continuity plan.
7. Death of principal owner: Is your business all about you? Do you build all operations and decisions around yourself? What happens when you are not available? These are some of the questions that should be asked when making a plan for business continuity. Some great businesses ended with the death of the principal owner. Except you want your business to go down with you, replicate yourself and expertise in your workers to ensure a smooth transition and continuity in the event of eventuality.
The above potential risks are by no means exhaustive, as there are many more challenges that can be anticipated. The existence of these risks should not discourage any entrepreneur from business, after all one of the characteristics of an entrepreneur is the ability to take calculated risk in business.
But what are the possible continuity strategy that can effectively ensure a business continues to go on in the event of the above challenges. Below are some remedies great business men take to ensure the future of their enterprise:
1. Insurance policy: The insurance industry was created for the sole reason of managing uncertainties, a good entrepreneur who is determined to keep his business afloat will take advantage of the insurance policies in order to stand strong in the day of disaster. There are many insurance policies that can be undertaken such as the fire insurance, burglary insurance, car insurance, and even the entire business can be insured.
2. Lobbying: Big corporations and multinationals sometimes sponsor bills in the national assembly that will create enabling environment for their business to thrive. In some situations they lobby their way through some amendments of existing laws. An average entrepreneur can sponsor or lobby a bill through their senators or representatives. Although this may be a long shot, but it is also a possibility.
3. Staff motivation: Organizational conflicts can be very devastating whenever it erupts, and the most cause of it is working with aggrieved staff. This is why motivation is very key in getting the best out from your workers. There are various ways of staff motivation such as rewarding outstanding staff, periodic promotion through objective appraisal, continuous training of staff etc. working with people that build their future in your business will equally ensure the longevity of your enterprise, but the reverse may be the case when your company is just a means to an end.
4. Back up business plan and strategy: What will happen if a legislation banning your product is enacted? Or there is a zero patronage. This have ended a lot of businesses, but with a good back up plan anticipating these uncertainties, you can continue to be in business no matter what happens.
5. Cutting cost and maximizing profit: Extravagance can ruin a business faster than natural disaster. In the time of boom, have it in mind that it does not always last forever. While reaping your profits in the time of many, save for the rainy day to avoid being cut unawares with low patronage.
6. Good corporate social responsibility: How do you relate with your host communities? Do you consider their opinion in your services? Perhaps you may have to go a step further in giving back to the people through corporate social responsibility. No matter the size of your enterprise, a sign post on the high way directing traffic will cost little but will be appreciated. People’s opinion about your corporate existence and your goods or services means a lot.
7. Replicating your expertise in your staff: No matter how good an entrepreneur or any businessman is, without replicating your expertise and abilities in your workers your business may die with your exit. A good entrepreneur who wants his business to continue after him will create a workforce or a manager that can handle the business in his absence.
8. Setting up a BCM unit: Some big companies have a business continuity management unit that will be in charge of monitoring trends, risk management, hazard management, emergency response team and the overall long term plan of the business. As a budding entrepreneur that may not afford a separate unit, it is important to have an action plan in place that will ensure the successful continuity of your business.
These points above can be viable for any business model. Having a continuity plan for your business is very important. Feel free to add more ways an entrepreneur can implement a business continuity plan in the comment box below.