Threats To Your Business
When you are running a small business you tend to concentrate on your core business, what you are good at, what makes you money. There are many other things a small business owner needs to consider. Amongst them we have discovered tax, GST, indemnity insurance, travel and office use log books, keeping receipts, superannuation, income insurance. These are standard for every business, I have not mentioned considerations for your particular industry. You know you need to address these things but it is certainly less appealing than getting your real work done.
David from the Armidale Business Enterprise Centre reintroduced me to SWOT analysis. This was dry theory from my high school business studies. When it concerns your business and your families livelihood however, you pay more attention.
Strengths
Attributes of the person or company that are helpful to achieving the objective
Weaknesses
Attributes of the person or company that are harmful to achieving the objective
Opportunities
External conditions that are helpful to achieving the objective.
Threats
External conditions which could do damage to the business's performance.
This analysis helps you to identify those areas of business that you may have neglected because you were concentrating on working hard. Formalising this process will strengthen your business and protect it. You might think that securing that next contract is the most important thing. That is, until you have a crisis come out of left field and cripple your business. It is your responsibility to look within and beyond your business to find ways to protect and enhance it.
Today I will concentrate on Threats as this is my recent experience. We sat down and wrote all imaginable threats to our business. Competitors, Tax Audit, Staff Resignation etc etc. We then ordered these scenarios according to likelihood and spent our energy on the most likely first. You could address the most damaging too, if it kept you awake at night. In addressing it we tried both to reduce the likelihood and reduce the impact if it does happen.
One of our threats as a technology company was hardware failure. Our computers breaking. We reduce the risk by updating our computers regularly. We mitigated the effect of failure by backing up our data. All data related to our business is backed up onto an external hard drive and also to remote servers. These data repositories are then not kept together to further reduce risk.
Last night we got to implement a plan, sooner than we thought. My laptop had a hardware memory failure, it would not boot. I bought a new laptop this morning and restored my data and applications. My total lost work time was 8-10 hours. Still significant, but my clients would not notice and I can make up the time, providing a reliable service.
Our plan has now been updated to have a backup computer, configured ready to go. This may seem extravagant but it is up to you. Whatever level of risk reduction you are comfortable with or can justify. In this case we thought the expense of an additional computer would be warranted as it would gain me at least 8 hours work and reduce stress. If a computer goes down or needs warranty repairs the other fires right up.
This is a modest example. I heard of a local restaurant whose business went bust based on a failed refrigerator.
What are the threats to your business?