Risk management and meeting the business objectives were some of the aspects entrepreneurs experienced in 2020. The year was highly unpredictable and shook the businesses in the ways that they have never imagined before.
Many businesses struggled badly to adapt themselves to the new normal and provide products and services to their customers as they have been doing all the time.
The emergence of COVID 19 has helped the business owners to learn some of the most valuable lessons. Start-ups and small businesses need to think in many ways to stay afloat as the global pandemic has adversely hit the market. These organizations have experienced risks and challenges that they have never thought about. So, it better to learn from them and develop strategies and plan of how they can be avoided in the future.
Here we have the top lessons that the small and medium-sized businesses might learn for 2021.
Develop a Risk Management Plan
It is advised that the small and medium-sized business owners develop a risk management plan that helps them to identify, treat, and manage any exposure to the loss or risk that can hamper the overall business growth. Designing an overall risk management plan will require careful consideration of the factors such as incident reporting, risk appetite, risk finances, and claim management. Businesses can appoint qualified professionals for managing risks through the plan. Also, sufficient resources must be allocated to address and manage the risk management strategy.
Develop the Business Continuity plan
Once you have identified the risks and developed the risk management plan, it is important to develop the business continuity plan. This will help the business to resume its operations with minimal disruptions when it faces a crisis. The business continuity plan is developed, keeping in mind risks such as theft, credit risk, supplier failure, flood, earthquake, and fire. However, the pandemic has also forced the business to consider the risks that are associated with the spread of an epidemic. Business owners are also considering the risks of a global climate change and its significant impacts on business continuity. Small and medium-sized businesses must consider all these factors as important aspects and develop a plan to sustain them.
Data Security is Important
The pandemic also showed that many of the small and medium-sized businesses paid little or no attention towards cybersecurity practices. The world showed a sharp spike in cybercrimes all over the world. India was reported to experience the third-highest number of attacks as compared to the other countries. 70% of these attacks were reportedly carried out at the time of the lockdown.
The cyber-attacks not only cause business disruptions but also exposes the company to litigation as well as the loss of reputation. As the employees are working from their homes remotely, it is vital for the businesses to invest in cybersecurity tools and practices. A comprehensive data security plan will help in the complete data protection to avoid the potentially larger losses the company might face in the future.
Keep the Armour Ready
Having the financial safety net ready is good to survive any financial crisis such as a worldwide recession. Larger organizations might have a stronger contingency plan; such a plan is difficult to develop for the start-up companies who are already struggling for the cash. Thus, it is important that the small busi8ness owners ensure ample resources and a strong cash flow to avoid the situation of a bigger financial loss. The start-ups must avoid considering larger office space and instead emphasize on the business optimization and cost-consciousness.
Develop and Practice an Agile Business Plan
The global lockdown amid the spread of the Novel Coronavirus was an expected event. It forced businesses to adapt quickly to the new normal and develop an updated business model. These start-ups need to adopt the agile approach to create a business model that can be changed quickly as per the changing market trends. Businesses need to understand which of their processes and activities are working and what is not working. One part of this agility depends on the diversity, which allows switching from one format to the other without any efforts.
Agility also promotes that the business avoids depending on a single customer base. Instead, it is better that the business finds alternatives quickly if one sector is affected. Dependence of a single customer base, a vendor, or a product can be devastating for the company after a certain time period. Therefore, avoiding such a situation can dilute the business risks for the company.
Innovation is Important
Technology and innovation are the saviours of the business when it comes to survival. Innovation will not only contribute to staying relevant but also, it will help to create a unique solution to mitigate any problem or threat. All aspects of the business must be analysed, updated, and managed to make the best use of innovation. Regular updates in the business will help the business to stay ahead in the market and withstand any future challenges.
COVID 19 has taught the businesses many lessons that will help them to fight many challenges in the future. Risk management and mitigation strategies will help the businesses to fight against the most challenging situations. The agile business approach will keep the business prepared for any challenges in the future. Learnings from 2020 will help to develop key business strategies for 2021.
Source – Entrepreneur