I often ask business owners what is the worst experience they’ve been through in their businesses. And I usually get the same four answers. So, recently I analysed those in more depth and discovered that they are all linked to risk management and what we (in change management) call present bias. Curiously, the business owners could have avoided these experiences had they had a backup plan or a fund provision in place.
In the event of a machine breakdown, you lose production and potential sales, even failing to fulfil orders in the pipeline. Machines and equipment break down due to a lack of preventive maintenance. I know it is a difficult thing to do. The belief: if something is working, why fix it is a strong limiting belief. The point of preventive maintenance is not fixing it but diminishing the probability of a sudden and unexpected breakage. The corrective action will cost you exponentially more if you don’t dedicate resources to prevent it.
The same goes for systems downtime, which is even worse because you risk losing data that you will never recover, like placed orders. Preventive maintenance ensures that the data backup, the storage space, and the external servers will handle the information flow and that there are no bottlenecks.
Simply put, preventive maintenance is about fixing things before they break.
Malware is software that performs certain actions on a computer system without the user’s knowledge. The most common types of malware are viruses and spyware, which can cause all sorts of problems. Viruses infect files on your computer and then spread those viruses to other computers to infect them too. Spyware is more insidious because it gathers information about you and transmits it back to whoever created it.
Cyberattacks are becoming more and more common. Therefore, keeping your systems updated with the latest security patches is crucial because attackers often use vulnerabilities in outdated software to gain network access.
You must invest in cybersecurity tools and train staff to identify and report suspicious moves or outsource the activity. Small businesses have a lot on their plate regarding investments and expenses, but cybersecurity should be a top priority.
As the number of employees taking time off work or quitting is rising, companies struggle with offering good service and being efficient.
Employee absenteeism can result from burnout, lack of motivation or other reasons. When not handled properly can end in lawsuits.
One solution to this problem is to have an efficient backup team to fill in for employees who need time off work.
Another is to train and have an on-call team that can take over when needed. You can achieve that by training your employees to be multifunctional and allowing frequent rotation so they get hands-on experience. Also, hiring freelancers and contractors can help.
Your backup team might perform worse than the dedicated functional workers, but it gets you out of emergencies.
Many business owners face the same problem – cash flow. The lack of money for solving emergencies can bring a business to full hold.
But, as a business owner, there are several things you should do to plan for any lack of cash flow and prevent that from happening:
Lack of cash flow is often the justification for breakage in operations. However, having reserves for ”rainy days” is a business responsibility, especially when a company is growing in numbers.
The lack of a backup plan can be disastrous for any business. Machines can break down, employees can be absent or sick, and systems can go offline. Therefore, it is crucial to plan for the worst-case scenario and avoid a partial or complete shutdown of the business.
The first step in making a backup plan is to identify what could go wrong and how it would affect your company if it did. It is called risk management.