Is Your Business Heading For The Cliff Edge?

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What exactly is a disaster scenario in business? A disaster scenario occurs when you are no longer able to sell your products or make a profit with your company. At that money, the engines for your business have faltered, and you’re falling fast. In cases like this, the best option would be to start completing damage control procedures. But, if we’re looking at the optimum outcome, you should not be controlling the damage at all. Instead, you should do everything you can to make sure it never happens in the first place.

You need to avert a disaster scenario in your business, and there are a number of ways that you can do this.

Keep Spending Under Control


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One of the most common disaster scenarios is caused by a simple case of overspending. By spending more than you make from your business, you will reach the point where you’re no longer making a profit. Once you get to that stage, you only really have two options. You must be ready to cut back. Of course, if you keep your budget under control from day one, you’ll never reach that point. So, you’ll have to think about how to manage your budget.

Outsourcing is a great way to cut the costs while still delivering a quality service to your customers. You can outsource almost any part of a business these days from logistics to HR. When you do outsource, you have to remember that you are essentially giving the control of that part of your business to another company. They’ll still work for you, but they will be responsible for maintaining quality levels. As such, you should choose a company very carefully.

Backup Everything


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Another piece of advice would be to make sure that you are backing up important data and files in your business. To do this, you can use a colocation service for your company. Colocation services provide data protection, handling and backup for companies and colocation pricing can be very reasonable indeed. For just a few hundred out of your budget, you can make sure that if your systems do break down you have a backup ready to go. This can allow you to avoid your business entering a period of disaster recovery that can take weeks or even months.

Hire A Legal Advisor


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Of course, one of the main issues that might cause a disaster scenario for your business would be a legal issue. That’s why you might want to think about hiring a legal advisor for your company. You can check in with your legal advisor every so often and ensure that you’re not crossing any lines that you shouldn’t be.

Legal issues can arise in any area of your company, but you should pay particularly close attention to employee management. It’s quite possible for an injury or complaint from an employee to send your business towards a legal case that could cost hundreds of thousands. An SME won’t survive this type of expense and neither will your business.

If you take this advice, you can steer your business away from the cliff edge before you get anywhere near it.

When Business Bites Back

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Sometimes, it can feel like your business is fighting back against you. It’s like struggling to tame a wild beast that keeps pulling on the reins. If you’re not careful, you will lose control completely, and your business will become a disaster zone. To avoid this, we need to think about the issues you could encounter in your company, how to deal with them and what they could mean.

You might think that tech has solved a lot of the dangers in business. But as you’re about to discover it’s really only made matters worse.

Tech Terrors

If you are running a business, you should be storing sensitive and important data files on the computer or the cloud server. This is a smart decision as experts generally agree it’s the securest form of storage on the market. Certainly, it’s a lot better than having hard files that anyone could swipe from your company. Or, that could be lost in an event like a fire.

But tech is not completely foolproof, and it can cause issues of its own. For instance, you might find that the tech in your company breaks down. At that point, you could lose all the important files and data you need to keep your company running. Not to mention any sensitive customer data that could impact your clients.

Luckily, there is an answer to this, and that’s to use a backup server. With a proper IT support and consulting service, you can make sure that you have a complete backup of your computer systems. That means if one system crashes you will be able to rely on the other. This is also useful if your business suffers a hack.

Legal Lows

You may find that the issue in your company is a legal one. It’s possible that your business is hit by a lawsuit and this can be a nasty shock for company owners who weren’t prepared. Lawsuits can come from anywhere but are more often than not a result of action by an employee. Personal injury lawsuits are some of the most common claims. Protecting your business from this is about making sure that you have the right legal info. It’s best to invest in the services of a legal advisor who can tell you everything you need to know.

As well as this, you need to make sure you have the right insurance coverage in place. This will help you deal with the financial issues of a lawsuit against your company.

Killer Clients

Finally, you might have issues with clients and customers. Believe it or not, your customers hold the key to killing your business stone dead. You might have noticed that business owners these days are particularly cautious of complaints on social media. You might think they’re being over cautious, but they’re not. They know that well over eighty percent of customers rely on online reviews when deciding to make a purchase. On top of this, they understand how fast bad word of mouth can spread. That’s why you must always work to keep customers happy and feeling appreciated. If they do have an issue, handle it immediately or risk the wrath they could bring on your business.

Is Your Office On The Brink Of Disaster?

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You may not realise this but your business office could be on the edge of a disaster for a variety of reasons. If it is, it’s not too late to complete a course correction. The problem here is that most employers have no idea what disaster they are going to face until it hits. Let’s look at a few and see if we can work to tackle them head on.

Legal Lows

It is possible that your business could be heading for a lawsuit. This will certainly be true if you are not keeping health and safety levels in your office high. You would be amazed by the type of issue that could cause a serious injury in your office. For instance, there might be loose wires over the floor. This could mean someone trips, falls and breaks their neck. It can happen and if it does your business could lose hundreds of thousands.

Tech Failure

Or, maybe your tech is about to fail. You hope this isn’t the case but you can’t be sure. Tech can falter or fail for a variety of reasons including a glitch in the software that you are using. You can’t prevent it but you can prepare for it. To do this, think about hiring an IT support team. They’ll monitor your tech and ensure that there are no serious issues.

Loss Of Faith

Or, perhaps your employees are losing faith in your business. When this happens it can be a disaster because they may stop working or bothering to come in at all. High employee absences are a clear sign that something is going wrong in your business model. You can learn more about managing this issue in the infographic below.


Managing Employee Attendance created by brighthr

Extra Steps Your Business Should Take When Risks Are Involved

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Running a company is risky business. There is no risk-free way of doing it. So, you should try to learn how to handle risks better. Your business will face all kinds of different risks. Getting your approach to each of them right could turn out to be the difference between success and failure. It really is that important. So, here are some of the extra steps you’ll need to take to keep your business safe when risks are involved.

Get Your Location Right

To start with, your location needs to be right. There are multiple ways in which the location of your business can be impacted by risks. For a start, you will want to be somewhere that gives you the best chance of reaching customers. If you pick a poor location, you risk a poor start that could have a hugely negative impact on the business’s chances of finding success. Then there are environmental risks that should be taken into account. Do you really want to start a business in a location that has a history of flooding or other weather risks?

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Have a Plan for When Tech Disaster Strikes

Tech disasters are very common in the world of business. We rely so much on computers and various other forms of technology. Of course, this has huge benefits. But it’s also a risky way to go about things. Tech can break down or stop working at any time. There could be power cuts or data loss. All of these things need to be planned for properly. There are companies that offer disaster recovery as a service, so look into this if you want an extra layer of protection in place. You should also train your employees on what to do if a tech disaster happens on their watch.

Find the Right Insurance Coverage

Insurance is one of those things that business owners either ignore or view as a necessary evil. Maybe both of those approaches are wrong, though. Insurance can do so many positive things for your business. Therefore, it makes perfect sense to think things through and get the best possible level of coverage for the best price. Unless you put some time into seeking out the best insurance deals, you won’t be able to do that. It’s something you could live to regret when something goes wrong, though.

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Track Your Cash Flow Better

How closely and carefully do you track your cash flow? If you just go with the flow and let it do its own thing, it might work for a while. But before long, things will get messy and chaotic. That is almost always what happens when you don’t track your cash flow properly. Unfortunately, it’s a mistake that is very common as well. Spending money is always a risk in business. If you do too much of it and not enough is coming back into your business, you’ll have a problem. So, keep a close eye on it and make sure everything balances out. It’s a risk that should be simple to manage.

Can Your Company’s Operations Cause a Black Swan Event?

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According to Nassim Nicholas Taleb, Black Swan events are rare, catastrophic events that many retrospectively assert could have been predicted and thus prevented. But can they? Could your company’s operational performance cause the next Black Swan tragedy?

Before we answer the question of whether or not your company’s operations could cause a Black Swan event, I need you to consider your organization’s risk tolerance as we’ll be defining the Black Swan event in those terms.

You see, Black Swan events reported by the media are defined by a much higher impact and scope than what most organization’s can tolerate. So with your organizations unique tolerance in mind, consider the following question sets regardless of how the event might be initiated:

Set 1

  • Does your company’s operations involve significant amounts of hazardous or potentially hazardous materials?
  • Does your company’s operations involve high energy systems or materials?
  • Does your company operate in an inhospitable environment such that inappropriate operations could result in harm to a large number of people or result in significant damage to assets or the environment?
  • Does your company provide a commodity without which a vital service would be impaired?
  • Does your company’s operations integrate with others such that a mishap could bring down a network supporting the provision of vital services?

Set 2

  • Could a relatively large number of people be impacted by an operational mishap at your company?
  • Could a significant asset loss be incurred by an operational mishap at your company?
  • Could a significant environmental impact result from an operational mishap at your company?

If you answered yes to any of the Set 1 and any of the Set 2 questions, your organization’s operations could cause what is for you a Black Swan event.

As a leader of a susceptible organization, your next questions become:

  • How can we recognize the rising risk of a Black Swan event?
  • How do we minimize our risk of causing a Black Swan event? and
  • How can we prepare for a Black Swan event now in an efficient, financially responsible way that balances cost and risk mitigation?

To help you answer these questions, we’ve prepared a FREE video training series: Preparing for the Black Swan. During this online training course, you’ll learn:

  • the warning flags of rising Black Swan risk
  • how to develop a healthy safety culture to minimize the risk of a Black Swan event
  • how to responsibly prepare for a Black Swan event through the implementation of protocols for responding to a Black Swan event should one occur, and
  • how to effectively monitor for rising Black Swan event risk
Access the Training Course Now!

About the Author

Nathan Ives, StrategyDriven Principal is a StrategyDriven Principal, and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.