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4 common business crises – how to prepare for them

When we start our businesses, very few people want to focus on the worst-case scenarios. They only dream about the good things they can do and achieve with their new business. But by not preparing for some of the most common business crises, your business could fail before it has even been given a chance to fly.

Four common business crisis situations and how you can prepare for them

1. Financial crisis

This crisis can be an internal crisis where there is a mismanagement of funds in the company, or it can be an external crisis where there is a downturn in the economy in which you operate. Either way, it is critical to have a plan of what you will do should your business go through a financial crisis.

2. Natural crisis

Nature is powerful and often our business may be in the path of its destruction. It is important to know what type of natural disasters are more common in your area and prepare for them. In South Africa, flooding and wildfires are common in many provinces and it is important to have a plan in place on how to deal with it should your business be affected by either natural disaster.

3. Technological crisis

Cybercrime has increased as more and more businesses go online. With computers, computer networks, and networked devices being targeted by cyber criminals, it is important to know what weaknesses may exist in your technology and how you can protect your business from these attacks. You can start today by ensuring you use strong passwords for your logins, keep your software and operating systems up to date, and don’t open any suspicious emails. These are a few ways to prevent cybercrime.

4. Human crisis

On occasion, a business can experience a crisis caused because of the actions of an individual or group of people. Crises that are caused by humans can be deception to the employees or public, arguments between employees, leadership or the business and the public, or riots, just to name a few.

As we can see there can be a variety of crises in a business and depending on your business there may be other weak areas.

Four general steps to take when faced with any of these crises

STEP 1: Get the facts

 If the crisis involves people associated with your business, speak to them directly and get their account of the event. You should try to get a clear view of the crisis from everyone’s perspective. If it is a natural crisis, then ensure you speak to or get relevant information from the correct department involved in managing the crisis. When you have the facts make sure you share them with the relevant stakeholders as quickly as possible.

STEP 2: Check the status of the crisis

Sometimes matters can be blown out of proportion. You must create a barometer on how you rate the severity of a crisis. You need to look at the impact of the crisis and how badly the operations of your business are affected.

STEP 3: Assign tasks

Give the relevant members of your crisis task force their duties. Ensure that a clear and concise message is sent to the media and posted on your social media pages. You should also confirm who has signing-off rights on the various actions that need to be taken during an emergency.

STEP 4: Be flexible

As the crisis occurs, the plans you had in place may not be appropriate. You need to be flexible. You need to change according to how the crisis is affecting you. Some changes may be temporary while others may be the new way of doing business.

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