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Why we should always prepare for the worst: How to crisis management plan

Running a business will inevitably lead to a complete crisis or disaster happening at some point. In that way, running a business is a lot like life. Some days you don’t question it, other days you do, some days are dandy and others, well, it feels like the world is falling apart. A delivery might go missing, you could mistakenly miscalculate your finances by a large margin or a global pandemic could hit and reduce your revenues to zero overnight.

While these difficult moments are inevitable, it is possible to prepare in the best way possible for them. The key to your response lies in having a well-laid-out plan and a robust strategy ready to go when such a crisis hits. That’s what crisis management is all about: it’s the process of preparing to deal with a disruptive – and usually unexpected – situation or emergency. It involves work across all the functions of the business, from financial modelling to PR. How you respond publicly to an unplanned event can be critical when your community closely follows how you handle things. 

Creating plans for hypothetical events might not be top of your priority list, especially when there are plenty of present issues to keep you occupied. But when you take the time to think about everything that could go wrong, you’ll soon realise the value of some prep. By being proactive and using good management, you can even turn a crisis into an opportunity – enriching relationships with your existing customers, and even gaining new ones. 

Another reason as to why creating a crisis management plan is so important is that oftentimes, a business’ reaction to a crisis can create more damage than the event itself. For example, dealing with a crisis badly might sink staff morale and lead to customer loyalty, and consequently sales, taking a hit. That’s why it’s important to take all aspects of your response into account when you’re planning.

Crisis management planning is also totally free. Of course, if you have the cash it could be worth reaching out to mentors and other financial aid but there are plenty of free or inexpensive tools and templates to take advantage of as a small business.

Within your plan, it is worth preparing for different scales of crisis. For example, your plan might include instructions on what to do if your revenue falls moderately, and different instructions if your revenue drops to zero.

When it comes to actually constructing your crisis management plan, it is worth looking at several steps. 

  1. Brainstorm what crisis could arise.
    Of course, with the pandemic, no one could predict this specifically, however prepping for the crisis that event caused (financial loss, remote working etc) is a first step. So start brainstorming. Here are some ideas to get the ball rolling; a financial crisis such as a fall in revenue; a personnel crisis like unethical or illegal activities among your employees; an event that impacts your reputation; a technological crisis like a downed server or a cyberattack; or a natural crisis such as a flood or a storm.
  2. What would the knock on effects be?
    Start to explore how they might impact the various parts of your business, including your operations, finances, staff and reputation. For example, a supplier going bust might cause delivery delays that drive customers away – which in turn could lead to a temporary drop in sales, and leave you with less money to cover your overheads. Don’t forget to consider how much it’s likely to cost you to deal with each crisis as well. 
  3. Prep the solution
    Once you’ve outlined the crisis, brainstorm how you could reduce the likelihood that they’ll happen; resolve them in real-time; or reduce the impact they have on your business. Treating this as a collaborative exercise and gathering your team to get your collective ideas on a whiteboard is a great way to do this. Make sure you go into granular detail about how long it’ll take you to resolve the crisis, what tools and resources you’ll need, who’ll be involved and whether you’ll need to address your staff and customers – or even make a public statement. 
  4. Who will do what?
    Time to start delegating.  Allocate specific duties to your team members – even if there are only a handful of you – and bring them up to speed with your plan. For example, you may want someone to handle some of your responsibilities, like ordering stock and managing customer orders, while you’re dealing with the crisis itself. Depending on the type of crisis, you’ll also need to identify who to get involved externally, such as solicitors, consultants or first responders.
  5. Update your plan
    Make room for lifestyle changes. Energy bills gone up? Incorporate such costs into your plan. Aim to review your crisis plans at least every six months to make sure they still apply to your current team, business activities and facilities.
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