How To Mitigate Threats To Your Business

Owning and operating a successful business is incredibly rewarding when you consider the numerous threats and obstacles that have been carefully navigated along the way.

In business, no company has a smooth ride, where everything goes its way. Therefore to succeed, the company must understand and mitigate internal and external threats.

A business plan is a go-to document when it includes known obstacles and possible threats to the business. Even when there is an unexpected event that can have dire consequences like COVID-19, the company with the right plan that allows it to change tact quickly is the one that survives.

There have been many examples of companies showing their skill, speed and leadership to meet demand during the pandemic. Manufacturers are making PPE (personal protective equipment) instead of their usual products. For example, luxury clothing brands are now producing gowns and face masks.

Every day there is a need to observe operations and be ready to respond to threats to your business.

So what are the most common obstacles startups, and all enterprises need to avoid or overcome to push forward to succeed?

PEST Analysis

Just like with Coronavirus, some events will challenge the viability of your business. In your business plan, make a list using PEST analysis to determine threats and opportunities. If COVID-19 has taught us anything, it’s adapting to change that matters most.

Political

As we have seen with the COVID-19 pandemic, the response to it depends on leadership and how Governments choose to respond to it. During recessions, Governments take more a leadership role, to improve trading conditions. Compliance and other regulations requirements may be softened for a time and economic stimulus provided. Whatever action Governments take can be a threat or an opportunity for business.

What’s interesting is, it’s typically during recessionary times that startups rise up. As the saying goes, there is an opportunity in every adversity and so many of today’s blue-chip businesses took action and got going during an economic recession.

Economic

Economic downturns have taught business leaders, there is always a risk, even choosing to operate as usual is an action that carries risk. Revert to your business plan and navigate the choppy waters of whatever external event is impacting on your company.

Companies with sound financials, including cash reserves, can see off short term sales inactivity. However, when times get tough, some employers are not well prepared for a significant drop in revenue, so staff are sacked, and unemployment levels rise. With more people out of work, crime rates go up, including commercial and residential property break-ins and burglaries. Make sure your plan includes investing in technology to secure, monitor and protect your assets.

Social

Socio-economic and environmental factors can be a threat to your business as with viral outbreaks and natural disasters. Expect the unexpected and have an action plan. This is where insurances play a role in providing confidence that the risks are tempered if not completely eradicated. In your plan list the apparent threats to your business, for example, if your customers no longer need your product or service – what action can you take?

Technology

Technology can be a threat and an opportunity for your company. Without the right systems, your business will fail to keep up with its competitors. Technology is far-reaching too and not just the hardware and software you use in your business but also the security systems like cameras and surveillance equipment required to protect your physical assets.

Also, with social distancing, the new normal, long-range access control systems are in high demand, particularly with businesses keen to keep operating during restrictions on movement. A long-term RFID system, for example, can also be used for contactless entry, plus lock and unlock access to and within a building.

Cybersecurity risks, including AI-assisted ransomware, is also a common threat. IBM says the average cost to businesses of a data breach is $3.86 million.

In your business plan itemise where technology can be a threat, i.e. what will happen if you don’t have x,y,z systems? Manage technology risks by keeping systems up to data, investing in technology and infrastructure. Plus forecast when the timing might be right to take a different route with a new system that can be a gamechanger.

Summary

When your business has a plan, you can proceed with confidence in all your undertakings. There will be obstacles to overcome and opportunities to grab, but that’s why we do it. Mitigate threats and seize opportunities to thrive in 2020 and beyond.