MENU

SIX TIPS TO HELP BUSINESSES BUILD RESILIENCE
31st October 2023
5 minute read

Resilience planning today means future-proofing for potential adverse events tomorrow

Strong reserves, contingency plans for losing major customers and other considerations allow businesses to minimise risk and confidently move ahead

Time spent on strategic thinking around resilience should be a priority for any growing business

In a world of constant change and uncertainty, strengthening business resilience has become a paramount priority for firms looking for sustainable growth. Business resilience not only equips SMEs to weather adverse events, such as the loss of a key client or supplier, but also empowers them to seize growth opportunities.
Time spent considering financial stability, diversity in customer base, products, suppliers, and robust contingency planning is essential for any business looking to move ahead. Here are six tips to consider for your resilience planning.

LOOK AT YOUR BUSINESS MODEL

To build resilience, it is essential to evaluate your business model rigorously. Ensure that your products and services are well-aligned with the market’s needs and can be produced and supplied consistently over the long term at a reasonable cost. Diversify your business to reduce reliance on a single product, service, customer segment, or supplier.

Determine where you want your business to be in 12 and 36 months. Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) to identify your current position and future direction.

 

CONSIDER CASH FLOW

Running out of cash is a common cause of business failure. It can happen quicky and can be a result of weak sales, low profit margins, excessive costs, or undercharging for products and services.

Implement sustainable growth targets and maintain rolling 13-month cash flow forecasts, updated at least monthly, to ensure consistent cash flow. Fast-moving crises, like pandemics, may require even more frequent updates of your financial forecasts.

RISK MANAGEMENT

Maintaining a risk register is essential to understand and mitigate potential hazards your business faces. Identify risks such as property damage, the loss of key personnel, or temporary halts in trading due to unforeseen events.

Assess the probability and potential impact of these risks, and develop strategies for prevention, mitigation, response, and recovery. Be open to taking calculated risks to achieve your goals.

MANAGE PRODUCT LIFECYCLES

Product obsolescence is a significant threat to business resilience. Actively manage the lifecycles of your products and services, from introduction to decline and eventual upgrade or replacement.

Continuous innovation and adaptation to market changes will keep your offerings relevant and appealing to customer.

STRESS TESTING

Evaluate your business model and strategy under the worst-case scenarios identified in your risk register. How would your disaster recovery and business continuity plans cope if you lost a major client or faced a drastic change in sales volume?

Stress tests help identify vulnerabilities and areas that need a rethink.

SEEK SPECIALISED FINANCIAL ADVICE & PROTECTION

Financial planning is integral to resilience, encompassing cash flow management, tax optimization, and insurance. Do not overlook protecting your key assets, especially human resources. Specialist protection advice can establish a robust framework to safeguard against disruptions caused by the loss of pivotal team members.

Key types of protection include:

Key person protection
Covers the cost of disruption when a pivotal individual becomes ill or passes away

Shareholder protection
Helps business owners maintain control if one of them faces a serious illness or passes away

Loan protection
Prevents loans from becoming burdensome if a key individual is lost

Relevant life plan
Offers tax-efficient life insurance for directors and staff

Group life insurance and income protection
Safeguards employee well-being

Building business resilience is a holistic process that involves comprehensive planning, strategic foresight, risk management, and financial protection. Resilience means you stay competitive, stay relevant to customers and adapt to changing market conditions. By implementing these strategies, growing firms can enhance their capacity to weather challenges, seize opportunities, and thrive in an ever-changing business landscape. Moreover, a resilient business is more attractive to potential buyers, which can positively impact its sale price.

CATEGORIES

LATEST NEWS

THE FINANCIAL GIFT THAT WILL KEEP ON GIVING

THE FINANCIAL GIFT THAT WILL KEEP ON GIVING

9th December 2024

Fancy slipping a little monetary something into a loved one’s stocking this holiday season? Stop right there! However well-intentioned the gesture, there are plenty of factors you should consider beforehand to make sure you’re giving in a tax-efficient way that will help you as well as them.

THE BUDGET – OCTOBER 2024

THE BUDGET – OCTOBER 2024

30th October 2024

I am sure that you will have followed the news closely in the last couple of days and there will be a lot of comment about the changes announced in the Budget. As financial planners, It is important to be up to date about any changes in the Budget.

THE POSSIBLE IMPACT OF THE AUTUMN BUDGET 2024

THE POSSIBLE IMPACT OF THE AUTUMN BUDGET 2024

13th October 2024

There has been a lot of comment in the press about the possible changes in the Autumn (end of October) including the potential impact on the ability to withdraw money from a pension completely free of tax (Tax Free Cash).

WHY IS IT IMPORTANT TO SAVE FOR RETIREMENT?

WHY IS IT IMPORTANT TO SAVE FOR RETIREMENT?

1st October 2024

Saving for retirement is crucial. With inflation and living costs ever rising, the UK state pension alone is becoming less and less likely to cover your living expenses. The current £11,962.60 a year, while a helpful safety net, typically provides only a basic income that may not meet the needs of many retirees.