What is business resilience?
“Business resilience is the ability an organization has to quickly adapt to disruptions while maintaining continuous business operations and safeguarding people, assets and overall brand equity.”
While this term is generally thrown around in association with preparing large brick-and-mortar businesses for unexpected disasters, it is equally important to expanding online companies facing a turbulent market.
My clients are often future thinking and many have investments in the market. If so you don’t need to be told that 2018 was crazy! We have seen record highs and lows this year, and some financial experts are sounding the alarm for a 2020 crash. You can read up on it on Forbes, Bloomberg, or Time.
Here is the common line of thinking:
“…In the last three months, things have seemed far less sure. Stocks have tumbled almost 10%, putting 2018 on track to be the market’s worst year since the 2008 recession. Meanwhile, investors have become increasingly anxious about the tightening labor market and ongoing trade tensions. And now many economists are predicting the economy will head south sometime in the next 12 to 24 months.”
Of course, economic forecasting is historically difficult to nail and you can find plenty of arguments against an upcoming crash. In fact, at the time this article was written, a good jobs report sent stocks soaring ~750 points in one day. But that’s not what this article is about! Volatility in the market is just a reminder.
It’s about preparing for anything, determining what critical business functions must be protected at all times, and creating a plan to safeguard them before it’s needed.
“A critical step in becoming a resilient organization is understanding what your vulnerabilities are so that you can prepare to stay in business.”
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Flexibility is the key to resilience
Folks, this is not only true for business! Flexibility is also key to building emotional resilience (and hitting sweet yoga poses).
“Field studies and laboratory experiments have documented that a key component of resilience is emotional flexibility – the ability to respond flexibly to changing emotional circumstances.”
So keep flexibility as a forethought when considering how to create resilience in your business (especially if you ARE the business.) You need to know how far you can bend before your business process breaks. What areas are the least flexible and therefore most vulnerable?
Once you have measurement tactics in place you can determine where your breakpoint is and plan accordingly.
Tips for building resilience into any business
- Diversify your offers & packages
In times of turbulence, many businesses start to struggle when their clients begin to cut costs and reduce services. Have a plan in place to target more customer types, adding a cushion of protection to your core product.
“Diversify your customer segments: Over the past few years, we’ve seen companies with product offerings concentrated in mid-priced segments struggle in the context of currency volatility and price sensitivity where aspirational customers traded down”
Martina Bozadzhieva, Frontier Strategy Group
Similarly, you should have an offer ladder in place that allows your thriving customers to expand into greater service levels and custom packages. Creating niche and custom offers can help you capture customers less vulnerable to volatility.
- Create multiple revenue streams
This bit of advice is often cited for optimal business health, but consider it in the context of flexibility. If you have all your eggs in one revenue basket, and it experiences any volatility, your business loses the option to bend and flex. Lose your cash flow and you aren’t left with many options. Pivot with your industry and take advantage of peripheral needs within your target market. Even if you do not begin to offer new products, you can create a paid referral network or create evergreen courses to teach people up to your preferred service level.
- Audit spending and optimize operating cost
As you build your business, systems evolve and change. Often, we are so caught up in the day-to-day hustle of running a business that we fail to thoughtfully review the tangled mess of dismantled systems we have outgrown. This can lead to software subscriptions we don’t use, redundancies, or costly business habits that just “happened”. Time to clean it up. If you have a brick-and-mortar or physical product, think about shifting your systems from cost-optimized to disruption proof. Audit your distribution channels and logistics for weaknesses and prepare now, before you need it.
- Take cybersecurity seriously
You need to be aware of the certainty in cyberattacks to your online accounts, the average website gets attacked 44 times per day. The fallout depends on your safeguard systems. Be sure to have backups of your digital assets and a predictable backup schedule built into your system. Keep your website and software updated and use strong passwords (really, use a password manager if you must) because if you don’t you are leaving yourself vulnerable to attack.
You may think “I’m too small/insignificant to be hacked” or “I don’t have anything valuable” to steal. Oh, yes you do. The site and the server it is held on are very valuable. The rise of cryptocurrency and crypto mining has only added fuel to that fire.
- Keep up with what your competitors are doing
You should audit your competitors for marketing purposes anyway, it’s good for many reasons, but remember to note any actions or changes that imply a turn toward safety. Did your nearest competitor move product production to the states from overseas? Why? Did they recently diversify their ads and pivot away from Facebook? Explore what inspired that change. Being aware and curious can be your greatest asset against unexpected change.
Volatility is a certainty, one of the only absolutes in business
But you do not have to be a victim to the whims of the market. Simply acknowledging the many possible catastrophes that could befall your business can mean the difference between success and failure, plan deeply for them and you can cultivate true confidence in your stability.
If you feel like your business is vulnerable to volatility and would like some help identifying where you can diversify your offer, redundancies in your software, or other ways to build a resilient and streamlined business, book a free one-on-one call.
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