Entrepreneurs Need To Be Prepared For Crisis Situations
You may never have to deal with a crisis in your business. However, it’s always better to be prepared than having to deal with a crisis with no thought or idea of how to go about it. You always need to have a backup plan.
Make a List of Potential Problems
For each business owner, these will be slightly different. If you have a home business, you may want to include any type of crisis that would affect your ability to do business, even if it’s not business-related.
Create Response Templates for Each Issue
Now that you know the types of crises that might affect your business, take the time to create a response template for each issue. You may be able to locate templates on MS Office via Word and Excel to help give you some ideas. Mainly you want to go through what to do for every single element of each crisis, from PR to physically fixing equipment. Whatever it takes.
Inventory Your Assets
If you don’t even know what you have, it’ll be hard to replace items if disaster strikes. Take pictures of your assets and create an online inventory of everything it takes to run your business – from software to physical equipment, such as smartphones, laptops, and printers. Whatever you have you’ll want to note with a picture, a description, and a copy of the purchase receipt.
Keep All Stakeholders Informed
Know exactly what your plans are for communicating with your stakeholders. Whether they are investors, customers, or they work with or for you, know how you’ll keep the lines of communication open should a crisis occur.
Don’t forget that continuing to promote your business positively during a crisis is imperative to be able to overcome it with a business still intact. Don’t stop your usual promotions (unless you need to due to finances) when something happens.
Whether you’re talking to the press, your customers, or posting on social media about the crisis, be sure to always stay open, honest, and transparent. Even the appearance of stonewalling can be a PR nightmare for a small business owner.
Create Backups of Everything
Whether it’s software, or data, or websites… whatever you use for your business, every single ‘asset’ needs to be backed up regularly. You will want to have backups of everything so that if one method goes down, you’ll have the other one handy.
Create a Vendor Response List
One important document to keep, that is easily accessible, is a list of contacts you need to contact immediately. For example, do you know how to call your payment processor if you do not have access to your computer or your smartphone? Can you sign in from any computer from anywhere to get a list of your vendors, account information, and so forth, so you can deal with it? If not, do it right now.
Give Power of Attorney to the Right People
What happens to your business and the people you work with if you are not available at all for whatever reason? You have to think of the worst here too. What if you can never be contacted… ever again. Is there someone you can give POA to that can work for your business’s benefit if you’re unavailable due to whatever crisis arises?
Crisis preparation is an essential ‘best practice’ for smart business owners and managers. Take the time to get the information together that you need if something happens. That way, you’re ready to take on the problem from day one instead of trying to invent a way at the last minute for dealing with it.
Whether the crisis is one of PR or one of a natural disaster, with planning you can ensure you come through it without any long-lasting problems.
Mistakes To Avoid When Managing A Crisis
If your business has a crisis of any kind, it’s good to know you have a plan in place. If you don’t have a crisis management plan it can be the reason why it is hard to get through it. It will all be due to a lack of planning. As your business grows, there will be many situations that can put you at risk – for example, a bad review, technology failures, or natural disasters. If you’re not ready to deal with these crises right away, it can spell trouble for your business.
Here are some common mistakes you’ll want to avoid.
No Crisis Plan in Place
The very first thing any business owner should have is a plan for any crisis that can happen. Whether it’s ensuring you have backups in the case of a server crash, or insurance in the case of a natural disaster, or a plan in place for PR (public relations) in the event of a social crisis – all of it can ensure that your business and you make it through it intact.
Putting Your Head in the Sand
This often happens, especially if it has something to do with an embarrassing situation, a potentially illegal situation, or a monetary situation. Some people just put it on the back burner and ignore it, hoping it will go away. The problem is, this never works. Not dealing with a crisis usually ensures the worst possible outcome.
Not Actively Managing the Issue
If you have plans in place for various types of issues, you will be able to actively get on top of almost any situation to mitigate the damage. However, if you have not made plans and ignoring the situation (by putting your head in the sand), this means that you’re allowing someone else to narrate your story.
Letting One Person Speak for You
If you have a larger business with more than one person in it, it can often happen that one person is tasked with dealing with all the bad news. This is not a good idea. Instead, get everyone who is seen as part of your business to speak out about it. You may need to offer training to enable them to do so in an open, honest, and transparent way.
Forgetting the Importance of All Stakeholders
Aside from customers, you have other stakeholders who want to know about issues as soon as possible. They may be people in your home, your family, or who work with, and or for you. They may be investors too. Whoever they are, you need to work up a system to get the right message to each segment of your business network.
Overconfidence in Your Reputation
Sometimes it’s tempting, especially if the crisis is fabricated, to just ignore it. After all, you know that you’re innocent, and your loyal followers will believe you over anyone else. Sadly, this is often untrue. Your best bet is to speak out the moment an issue comes up, honestly and openly.
Not Willing to Listen to Critics
The worst thing anyone can do is surround themselves with “yes people.” A person who will never offer any contrary opinion to yours is not safe to work with. You need people who challenge you, and your critics are the people to listen to – even if you disagree. It can help you with your messaging.
The best thing you can do for your business is to write down a list of types of crises that can happen. Then set up a response system for every kind of situation so that you’ll know what to do. If you have a process in place, you won’t be caught off guard and be unable to get ahead of any type of crisis.
When life throws us curveballs it’s best to tackle them head on. Better yet, have a plan before anything ever happens, not during, or after.
In addition to what’s already been mentioned, if you do nothing else do these 3 things:
- Keep your records up to date and accurate. After all, how can you deal with a crisis when you don’t even have the right information regarding your business?
- Have an emergency fund. Not having any extra to help you out in a crisis equals major disaster. In fact, build your emergency fund before you even start your business if you can.
- Develop operating procedures. As a business owner you need to have all your procedures for all your tasks in one central location. If you, or someone who normally performs a duty or certain tasks are no longer able to, you want your procedures manual to explain exactly how to run your business.
The key is to keep your business functional even in the mist of a crisis.
Even if you can’t implement everything right away just start somewhere. You’ll have more peace of mind knowing your business is protected and operational no matter what life brings.