3 Tips for Preventing Crises from Ruining Your Business

For the entrepreneurial small business owner, the name of the game is “play to win”, and the stakes are high. On the one hand, you could “win” a life of affluence, freedom from bosses and other people’s schedules and policies, and the ability to structure your own life as you see fit. On the other hand, you could lose everything — including all of your own personal savings — and find yourself filing for bankruptcy.

Now, most small business owners aren’t likely to lose absolutely everything, or gain the entire world, but both of those outcomes are always within the realm of possibility.

Ultimately, as a small business owner, you will be highly motivated to do whatever you can in order to prevent crises from arising and demolishing your business. And those crises often strike suddenly and dramatically.

Look into the work of business continuity management companies, for example, and you’ll encounter harrowing statistics such as that 60% of small and medium businesses shut down within 6 months of a data loss, and that estimates suggest that 20,000 hard drives fail in the U.S. every day.

Here are a few tips on how to avoid such a fate.

Put steps and systems in place to preempt and secure against worst-case scenarios

It’s very easy to fail to take proper precautions to secure your business when everything’s going well, and there don’t appear to be any significant threats to your operations.

Keep in mind, though, that “when it rains it pours”. You might be fine today, but a major issue can arise at any moment. Data loss. Cyber attack. You are not above these devastating business crises, so you should do whatever you can to prepare and guard yourself against them in advance.

Put steps and systems in place to preempt and secure against worst-case scenarios in advance. Hire that business continuity management firm. Get your web security audited. Prepare for the storm while the sun still shines.

Be methodical and structured in your professional life — avoid putting important duties off for later

Many crises develop, both in business and in life, simply because people fail to act in a methodical, structured, and timely manner.

If there is some duty that you should be attending to, or if you notice the first signs of a potential issue developing in some area of your professional life, do not by any means just stand by and put it off for later.

The more promptly you’re able to address burgeoning issues, the more likely you are to be able to deal with them before they explode into full-blown disasters.

Budget for the unforeseen

When some unexpected issue arises in your professional life, you will almost always feel it in your wallet — or your budget — first and foremost.

One moment, everything’s fine. Then, some vital piece of equipment has broken down, or you need to bring in legal representation, and now you need to make money material more or less out of the clear blue sky.

It’s hardly surprising that many businesses are absolutely ruined by these kinds of issues. To avoid finding yourself suffering the same fate, don’t just budget for the expenses you know about. Budget for the unforeseen. “Unforeseen expenses or “emergency expenses” should be a very real category on your budget, and you should filter a good amount of money into it each month.

It may just save your business.