Business failure rates are high. Every. Single. Year. Records indicate 100,000 more business failures occurred in 2021 than just the normal 400,000 when nothing unusual is going on. One business trainer frequently teaches students to “Fail fast.” Get it over with and move on. Failure happens for a multitude of reasons.
Blame it on the Coronavirus, COVID-19, or the responses to it. Blame it on Putin and the Russian invasion of Ukraine, and the world’s responses to it.
Most business crises, large and small, aren’t as devastating as war or a pandemic. But they are often enough to end an entrepreneur’s dream.
The best advice might be to have a business plan. Its about avoiding risk, not all, but the most important. Remember the phrase, “Failure to plan is planning to fail.” It’s a risk reduction effort that doesn’t guarantee success but certainly helps to eliminate many potential hazards that had been overlooked. Its also a living document that needs to be reviewed regularly; because things often change. Some suddenly.
The effect of the Coronavirus pandemic on local businesses has been unexpected by many, if not most, small business enterprises. The seriousness of the pandemic on a national and world-wide scale has been brought to the local level from political and medical organizations not normally of great concern to the family businesses because there is a disconnect in communication between small, main street businesses and international influences. Experience is a quick and effective teacher. Business plans are certainly encouraged to include better and more frequent communication than has been utilized in the recent past. Our world is shockingly small because of amazing technology now available at the local level and must be utilized in the risk reduction plans of business organizations.
Crisis management in business is necessary when business growth, sustainability and potential expansion is considered. These are chapters in the business plan that are necessary if business-ending risks are to be avoided.
“Work smarter, not harder” is an adage we’ve heard and stated for years. When a strong back was the most valuable tool for business success, we were able to succeed by working harder. In most cases that is no longer true. (There are instances where it would improve our company’s success if some peers would work harder ). Cell phones are ubiquitous – everyone seems to have one. Regular and rapid responses to messages are nearly automatic. There was a time when we had to stop at a phone booth to call the office for messages, now we can respond to dozens of inquiries before our first cup of coffee is finished. There is an on-line library that lists 77 million books in its inventory (digital inventory, I am sure). That is amazing.
Cyber security? Of course. Risk avoidance? Yes. Crisis management? Absolutely.
If you believe, as I do, that an 80% business failure rate is unacceptable, then be sure to include a complete chapter on Crisis Management in your Business Plan.
It’s the reasonable thing to do.
Greg Henderson is the retired founder of the Southern Oregon Business Journal. A University of Oregon graduate and a six year U.S. Air Force veteran. Contact him at firstname.lastname@example.org