The coronavirus pandemic has tested many businesses in 2020, but a pandemic is far from the only disaster that an organization may face - and should anticipate. Earthquakes, wildfires, hurricanes and cyberattacks, among other threats, can spell catastrophe for firms of any size.
With proper planning and preparation, however, you can take steps to ensure your business remains resilient should calamity strike.
"If there's anything that 2020 has taught us, it's that business owners have to plan for the unexpected," said David Cameron, City National's head of business banking. “No one likes to think about recession, natural disasters or a pandemic, but it's important to have a downside forecast that lays out what actions you need to take in case revenue declines sharply."
Proper planning, in fact, is what may determine whether a business outlasts a crisis.
Research shows roughly 40 percent of small businesses won't reopen after a disaster, and another 25 percent will shut down within two years, according to Resilience in a Box, a collaboration between the U.S. Chamber of Commerce Foundation, the UPS Foundation, the World Economic Forum and others.
Business challenges come from all directions. Here are five steps you can take to position your business to withstand adversity.
To prepare for potential disaster, you first will need to identify the business features you most need to protect, which leads most companies to examine their cybersecurity protection.
“Most of resiliency really starts with having a plan — understanding your key business processes, your key business systems and your critical business data," said Brian Fricke, City National Bank's chief information security officer. "Once you've done that, you can determine how to best protect it."
Leaders need to focus on the applications and equipment that enable their employees to serve customers and generate revenue, Fricke said, and that may involve computers or cloud-based software. If your company relies on cloud applications, he suggested you explore how resilient and available those systems are wherever they're hosted, look at your contracts with providers to see what they're obligated to provide in terms of availability and negotiate the terms if necessary.
As part of crisis planning, businesses need to build in redundancy so they can continue to serve customers, especially online. This step includes backing up data and any operational processes you may need to maintain operations.
For example, companies need to secure and back up their critical data to avoid losing access in ransomware or other cyberattacks. Cyber criminals, Fricke noted, "are attempting to subvert the availability of that data, especially during crisis situations."
Your business should have clean, offline backup versions that are not accessible in the same way as your primary data, he explained. “It's one thing to say I've got all my data in the cloud, but if it's a single database, it could be accessible to ransomware," he said. “You want a separate, secure backup of all your business data, along with tested plans that show recovery or failover is viable."
You'll also want to build redundancy into sales and other operations.
If your business usually takes online orders that prompt back-office activity, you may need to set up alternative methods or simply a phone number that customers can call in case of an outage, Fricke said.
As the pandemic has shown, a severe crisis may force businesses to shift gears completely. That takes creative thinking.
Numerous businesses have had to transition from physical to online interaction during the pandemic. As part of resilience planning, firms should consider whether their electronic footprint can meet the new demand in that type of scenario, Fricke noted.
Many companies have reworked their business models in 2020 in response to the outbreak. Restaurants switched their focus to online orders and deliveries, retail shops set up online ordering for curbside pickup and wholesale food distributors added households to their customer lists.
Thinking about client needs and pivoting to meet them is imperative, according to Fricke.
Pivoting may also require turning to a new market.
City National's Cameron cited a client whose business stages big tent and red carpet-style events. During the pandemic, the company started supporting hospitals and clinics doing outdoor COVID-19 testing.
“With new economic environments come new business opportunities," Cameron said. "Companies should be able to quickly pivot to identify new sources of revenue."
You should also reevaluate your business insurance, including coverage for natural disasters and cybercrimes.
In addition to insurance coverage, Cameron recommended that businesses build up cash reserves and establish a strong relationship with their banks.
“If you don't have three or six months of reserve operating capital then the next best thing is access to capital, which is a line of credit," Cameron said.
Of course, there's no one-size-fits-all approach to building business resilience, and you may not be able to cover every base.
"There are a lot of nuances. Every business needs to create its own unique business continuity plan," Fricke said.
You needn't reinvent the wheel in making your business more resilient. Numerous organizations, including the federal government's Ready program, offer toolkits and other online resources to help you identify your risks, develop a plan and take action.
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