STARTING a business is no small feat. Entrepreneurs must attend to everything from business registration and compliances to hiring, marketing, operations and logistics.
However, one crucial aspect often overlooked in running a business is crisis management. After all, why think about a crisis when you're just starting?
The reality is, unforeseen disruptions — typhoons and earthquakes, supply chain delays, product recalls, pandemics or even a social media backlash — can happen at any time. While small companies may not have the resources for a crisis management team, there are still ways to prepare and respond to crises effectively.
What are the worse-case scenarios that may happen to your company? Is your store in a flood-prone area? What if your supplier shuts down? What if another pandemic occurs?
Ideally, such incidents may never happen, but it doesn't hurt to be prepared. To start with, create a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) for your business. From the "Threats," create a list of the top 3 potential risks and, from there, see how you can address them.
Communicate clearly
The best way to manage a crisis, big or small, is to communicate clearly and effectively. It's better to communicate often so that customers and stakeholders are assured that the company is proactively addressing the situation. The best responses usually include:
– Explaining the situation.
– Updating the public about what has been done.
– Updating the public on the next steps.
Companies and institutions that don't accept accountability are usually met with more hostility. One example of poor communication was during and after Super Typhoon Yolanda in 2013. Aside from the lack of resources, there was poor coordination between government agencies, local government units and nongovernmental organizations. Vital information didn't promptly reach the public, especially the affected communities.
In its analysis, the World Bank underscored the importance of communication protocols and choosing the right spokespersons early on for better information dissemination.
On the other hand, British Airways communicated effectively when it had a data breach. It not only informed customers right away, it also offered free monitoring services.
After the crisis, the company remained transparent, doing a comprehensive review and a security upgrade so that it may never happen again.
Economic downturns and other situations may force a company to bootstrap. When this happens, it's important to prioritize essential payments (such as wages, supplier payments). However, open communication with suppliers and landlords can also lead to flexible payment terms, helping businesses stay afloat.
When the Philippines went on lockdown due to Covid-19, many companies were able to negotiate flexible lease agreements while foot traffic remained low.
Technology
This probably sounds like an overused cliché, but technology has proven to be a game changer in crisis management. For example, during the lockdown and quarantines, many businesses created online communities to reach their customers.
Aside from communication platforms, it's also important to think of how to keep operations running smoothly when things go south. Cloud storage, cybersecurity measures and other productivity software should be used as early as now in order to safeguard important information and to help the company's operations stay flexible.
At the end of the day, no entrepreneur wants to suffer from a crisis, big or small. However, having a simple, actionable plan can mean the difference between closing down or bouncing back stronger.
By identifying risks, securing financial safety nets, communicating effectively and embracing technology, small businesses in the Philippines can not only survive crises, but thrive in an unpredictable business landscape.