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moreWe have developed the 4 stages to consider in preparing your business for any crisis which can form part of your own Business Readiness Plan.
Find out about stage 2: When a threat is realised: battening down the hatches below and keep your eyes peeled as we release the rest of the stages.
Stage 2: When a threat is realised: battening down the hatches
While no one can truly know in advance how they will react when disaster strikes, it certainly takes the pressure off leaders if they have a Business Readiness Plan to follow.
With the threat at your door, you can immediately start to carry out certain preparedness activities, such as:
- Securing business cash
- Evaluating debtors and creditors
- Determining if you can secure an overdraft
- Assessing what’s in your war chest
Being complacent is potentially the most dangerous action you can take because you simply don’t know what the future holds at this point. Instead, rapidly assess every planned business activity to identify what is and isn’t needed, and then cancel or delay those that aren’t so you can retain as much cash in the bank as possible.
We saw throughout COVID that the majority of businesses that opted for a “wait and see” approach have generally survived on government assistance. On the flip side, proactive businesses were able to take advantage of new opportunities and even experience growth.
Throughout this stage of crisis, communication will play a vital role. This includes communicating the right messages to employees, who may naturally fear for their job safety. 
With attracting and retaining talent a key challenge for most businesses in Australia, it’s important to act with empathy. Remember that the way you treat employees during tough times may make all the difference when the threat has passed.
The same applies to communications with customers. For example, if you have a loyal customer who is also enduring the threat and is behind on payment, you wouldn’t send them an immediate demand for payment. Instead, talk openly with them and share how your business is responding to the event. Let them know you will help in any way you can. This creates an air of confidence and respect which is very often repaid in full once the threat is over.
In planning for the severity and potential length of the crisis, now is the time to know what steps you will take and when. This could involve speaking with creditors, HR lawyers, lessors, and other stakeholders.
Remember: indecisiveness costs time and money, and you want to be ready to take action as it’s needed.
Getting help in stage 2: Scale up your strategy sessions so you are actively assessing the market and your position every week or fortnight. If you have a board of directors, lean on them for advice. Engage your business advisor to help evaluate capital, employees and customers while scrutinising expenditures. Any financial advisor worth their weight will have already helped other businesses survive difficult situations. They should be well equipped to advise you on how to make the most of your war chest to keep the business protected.
click here to read stage three
For more information, contact our business advisory team here