The Russian invasion of Ukraine, Covid-19, the cost-of-living crisis, the list goes on. If ever there was a good time to consider business crisis management strategies, it’s now. Most companies, however, don’t have specialist staff on hand to ensure their resilience against threats to the company. In these cases, the enlisting of a business advisory firm can be the difference between survival and going under.
What risks are businesses worried about?
It needn’t be a global socioeconomic event that can derail a company’s plans. Proper business crisis management deals with a wide range of issues that concern different sectors and sizes of business.
A recent study conducted by Allianz found that 41% of large corporations are most worried about business interruptions. While huge events such as the Covid-19 outbreak can cause these, they can just as easily be caused by supply chain disruptions. For big businesses, interruptions lasting just one day can potentially cost them millions.
34% of mid-sized businesses reported the same concern, while 31% of small businesses cited cyber attacks as their biggest worry.
Meanwhile, inflation and political changes remain a threat for every size of business. 24% of large firms, 23% of mid-sized companies, and 28% of small businesses reported them as a concern.
The role of a consultancy firm in business crisis management
A business consultancy provides specialist help and expertise that allows companies to navigate difficult situations. They assess the threat or damage, identify vulnerabilities, and offer a fresh, outside perspective on your business.
Communication
In a 2023 BCI report, it was found that 27% of the businesses surveyed confessed that their staff were unaware of any crisis plans. Business advisory firms can provide assistance in internal communications and information flow during a crisis, identifying ways that departments can work together to battle threats.
Financial restructuring
An important element of business crisis management is financial restructuring. Economic headwinds, governmental inflationary measures, and changes to taxes can have a huge impact on a company’s financial health.
In such cases, a good business adviser will help business owners to identify areas in which savings could be made, resources could be reallocated, and cash flows can be improved. If needed, they can also help in securing additional finance to provide a buffer during particularly rough patches.
Strategic planning
Business crisis management sometimes calls for companies to be able to pivot quickly. Expert advisers can help with this by developing actionable strategies focused on recovery and exploiting new markets.
Strategic planning can encompass everything from addressing cybersecurity threats, to adapting to a changing market. Whatever your company’s needs, a business advisory service can help you to put a robust plan in place to ensure that the firm not only weathers the storm but emerges from it stronger.
Future-proofing
Good business crisis management practices will leave a business with strategies that future proof against potential risks. This may involve the diversifying of services the business offers, techniques for improving cash flows, or specific advice that anticipates changes within the sector.
By providing businesses with these solutions, business consultancies safeguard companies against the same thing happening again, as well as making them more resilient against other threats.
Discovering vulnerabilities and potential for growth
One of the first things that business crisis management looks to tackle is the vulnerabilities apparent in a company. Operations, organisational structure, and finances are all checked over to look for chinks in the firm’s armour.
By making a comprehensive analysis of the company, business advisers can locate areas that put the firm at risk. For example, if a tin can manufacturer’s main clients are all tinned fish brands, then any future political changes to fishing laws could see some of their biggest customers go under.
To mitigate the effects of this, the tin can company should work to spread this risk across more sectors, perhaps looking to secure more contracts with pet food and soup manufacturers too.
Advisory services will often look to implement growth strategies at the same time as remedying vulnerabilities. When weaknesses are spotted, growth opportunities are identified at the same time. After all, a weakness is only described as such because it has scope for being improved upon.
Opportunities can even be spotted within upcoming economic pressures such as rising energy costs or inflation. Cost-saving measures can be implemented that set the business on a good footing for growth. Similarly, an essential diversification of product offerings to stave off threats can be a catalyst for strong growth when done well.
Enlisting the help of a team of specialists using tried-and-tested strategies makes business crisis management much easier and can increase a company’s resilience tenfold.
How business consultancies develop resilient strategies
Business advisory services are able to help companies to implement strategies that tackle immediate issues while also making them better prepared for any uncertainties in the future. They can do this in a number of ways, but will often look at the following aspects.
Risk management
Risk management is an essential part of building a resilient business. Advisers can work with owners to determine potential threats and develop plans to put in place should the worst happen. They’ll typically look at how to streamline and strengthen supply chains, and create contingencies for multiple scenarios.
Agility
Agility is more than just a business buzzword, and consultancies are keen to make sure that companies are flexible enough to respond quickly to industry changes and external threats. A company’s failure to react promptly to changes around it can see it quickly lose ground on rivals, and in severe cases, lose their viability.
By enhancing operational processes, creating a culture of flexibility, or even investing in new technology, businesses can avoid future issues and capitalise on emerging opportunities.
Diversification
Overexposure as a result of relying on a single source of income is a problem for many businesses. A good business advisory service will not only recommend diversifying your revenue streams, but will also provide suggestions on the best way to go about it.
Diversification helps to lessen the impact of potential issues, and also puts the business in a great position for growth.
Can you handle business crisis management yourself?
Of course, companies can always try to combat crises alone. In fact, business management courses are a great idea to expand your competencies in the potential event of a crisis hitting your firm. Because of this, business management has become one of the best degrees for the future. To really give your business the best chance of survival, however, enlisting the help of a business advisory service is strongly recommended.
A seasoned business adviser will be able to share a wealth of experience with you. Often, this experience will include countless instances of helping companies in the same position as yours. Having tackled several scenarios similar to yours beforehand, they’re often able to choose the best strategies available to suit your business.
Need help to navigate a tricky situation?
At Forbes Burton, we’ve encountered almost every problem our clients could possibly face. We’ve steered countless businesses from danger, and set just as many up to enjoy growth courtesy of streamlined processes and innovative solutions.
If you need help with business crisis management, we’re always happy to lend a hand. We have experienced specialists available to tackle almost any type of issue your company may have.
If you’ve not used a business consultancy service before, you can get a taste for what we do for free. All of our initial consultations are completely free and without obligation. Give us a call today and see how we can help your business. You can reach our advisers on 0800 975 0380 or email [email protected]
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