Small Business Crisis Management
Small businesses face a constant stream of stressors and challenges. When a small business encounters a crisis, it can quickly spiral out of control. A crisis can take on different forms and durations. Some crises can last a few hours, while others can take days or weeks to resolve. The two most common types of small business crises are financial and operational.
According to pain management specialist Dr. Jordan Sudberg, a small business crisis can be very difficult for a business to handle. A crisis can occur when a small business has too many customers, suppliers, employees, or assets for which it’s not prepared. A small business can go into shock if faced with a sudden failure or a significant disruption in its daily operations.
Understand your small business
The first step in managing a small business crisis is understanding your small business.
Understanding your small business and your criticality of function will help you identify the threats and opportunities within its space.
Define your problem, determine your goals and objectives, and develop a plan
Next, you’ll want to determine the root cause of your small business’s problems. In your assessment, try to find the cause of the problem and its probable effects. Then, work to resolve the root cause. If the problem is a failure in the business itself, this should focus on your efforts. If the problem is due to a failure in the system, you’ll want to focus on resolving the system. These two types of crises can co-exist simultaneously.
Establish trust with your customers and employees
Once you’ve determined the root cause of your small business’s problems, it’s time to establish trust with your customers and employees. Begin by letting each customer know how much you value their business. Ask them for referrals if you’re unsure who to contact. Be sure to let your customers and employees know how you’ll handle their problems or issues and what you’ll do if they approach you with a problem or issue.
Take fast action, and determine the cause.
Finally, once you’ve established trust with your customers and employees, it’s time to take action. Identify the root cause of your small business’s problems – the most likely cause being the most determining one. Take some action, such as hiring an accountant, hiring a consultant to evaluate your operations, or taking some time off to rest.
Once you’ve identified the root cause, start working to resolve the issue.
Look for solutions.
Amid a small business crisis. This can lead to impulsive decisions that potentially turn into big problems for your small business. To avoid this, try to keep a list of things you want to do or avoid doing. These could be negotiating with creditors, identifying suppliers that could become difficult to work with, or reviewing business plans with outside advisors. These help you stay focused and avoid making rash decisions that could jeopardize your small business.
Once you’ve identified the roots of your small business’s problems, it’s important to work to resolve them. If possible, work to resolve them upfront so that you have time to prepare for a crisis and minimize the impact of a potential failure.
Make sure that your small business policies and procedures are up-to-date and accurate. Make sure that your financing and business planning are in order. Make sure that you have adequate insurance. Make sure that you have a way to quickly identify and escalate problems so that they don’t occur during a crisis.
According to pain management specialist Dr. Jordan Sudberg, crises can be difficult to manage in a small business. While they may seem impossible to handle, they are manageable with a little preparation. Before tackling a small business crisis, it’s important to understand the types of crises and the C-V’s (critical value-chain).