Building a more resilient business

February 26, 2024 | 6 minute read

If there was one overriding lesson for small business owners over the past few years, it was to prepare for the unexpected. Staying ready to weather economic disruption and take advantage of new opportunities is not only the key to survival, but also a way to help your business thrive.

 

“Hope is not a strategy. Disruptions happen unexpectedly,” says Rochelle Clarke, founder of Continuity Strength, which creates web-based contingency plans for small businesses. “Successful businesses protect their growth by making risk mitigation a core part of their business strategy so they’re ready for anything.”

 

Many small business owners recognize the importance of being prepared for the unexpected. In fact, 76% of respondents to Bank of America’s 2023 Small Business Owner Report said their business is equipped to survive an economic recession, while most acknowledge a recession as a concern this year.1

 

How to build resilience into your business

Being ready, willing and able to adapt to change can give your business staying power. Beyond that, being flexible can help you seize new opportunities when others dry up. Here are some ways to stay nimble.

 

Prepare for an emergency

Make sure you’ve covered the basics of keeping your operations up and running if there’s a sudden emergency. Create a list of emergency contacts as well as a list of bank accounts and individuals who have signatory rights, so you’ll be prepared in the event you’re unable to run the business.

 

Also, draft a communications plan that covers how to get in touch with key stakeholders and a plan for handling your operations, including the technological aspects. “Having a business continuity plan lets you manage the unpredictable,” says Clarke.

 

Be ready to pivot

It’s important to consider workarounds if the current way you’re doing business no longer works as well as it once did. For instance, 80% of small business owners have digitally optimized their business over the past 12 months, up from 70% last spring. 37% are bolstering their social media presence, and 60% are accepting more forms of cashless payments, according to Bank of America’s 2023 Small Business Owner Report.2

 

Other ways to adapt include selling your product or service to new types of customers, expanding into new markets, introducing a new product or service to reflect current market demands, or creating a digital version of one of your in-person offerings. (For a more detailed look at ways to diversify your business, see “Guide: Growing a business.”)

 

Set frequently trackable goals

Staying on top of your business’s performance regularly can help you avoid unwelcome surprises. One way to do this is by setting trackable goals on a weekly, monthly, quarterly and annual basis — and course-correcting quickly if you’re falling behind. It’s also important to set aside regular time for innovation, whether it’s by testing new marketing approaches or new product development.

 

Operations: In today’s business environment, staying prepared for supply chain snafus is mission-critical. Search on an ongoing basis for alternate suppliers, shippers, and others who perform critical tasks for your business. It’s better to find them before you need them than to search desperately and make last minute decisions. And if you have the means, stock up on essential supplies you need to conduct your business to give yourself breathing room if things go awry.

 

How to determine where you need to build more resilience


Every business is different. Doing a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis, using our editable worksheet can help you identify key areas where your business may benefit from building more resilience.

 

Many small businesses find there are opportunities for improvement in these seven areas:

  1. Financing: Ask yourself regularly if you would be in a position to seek financing successfully and on short notice. How creditworthy is the business at present? If you don't like the answers to those questions, work on improving your cash flow and credit score. You never know when you may need funds.

     

    In the year ahead, 54% of business owners plan to obtain funding through business credit cards. Another 44% will use personal savings, and 31% will turn to personal credit cards, according to Bank of America's 2023 Small Business Owner Report.3

     

    Also, be sure to build an emergency fund. Make a list of your monthly expenses like payroll, rent and taxes, and multiply that amount by three. That is the number of months of overhead you’ll ideally want to have tucked away for a rainy day. If you’ve already opened an emergency fund, make sure to contribute to it regularly.

     

  2. Marketing and branding: If your business is heavily dependent on in-person sales, consider diversifying into digital and mobile sales channels. Similarly, if you were to lose all of your sales during an internet outage or if there were a change in the terms of service on a platform you rely on, like Amazon, you need to have backup systems in place.

     

    Making sure you are protecting your brand and other intellectual property is also important in an increasingly digital era. An appointment with your attorney to make sure you’ve covered your bases can be a great investment in the future of your business.

     

  3. Product or service: With more people using social media, customers can post complaints online with the click of a button. Make sure you have systems in place to get input from your customers on your offerings before that happens, whether it’s a suggestion box at your point of sale or an organized way to log input from your front-line employees.

     

  4. Talent: Staffing can easily become a source of grief for employers who aren’t making a concerted effort to attract and retain talent. A noteworthy 4.1 million people quit their jobs in December 2022 alone, according to the U.S. Bureau of Labor Statistics. And among small business owners surveyed, 41% listed hiring challenges as a top concern, the 2023 Small Business Owner Report found.4

     

    Even if you haven’t been hit yet, make no assumptions. Working harder to keep a healthy pipeline of employees and hold onto your team can go a long way. Also look for new avenues to recruit people, whether it’s on social media or through a trade organization or alumni network you belong to.

     

  5. Operations: In today’s business environment, staying prepared for supply chain snafus is mission-critical. Search on an ongoing basis for alternate suppliers, shippers, and others who perform critical tasks for your business. It’s better to find them before you need them than to search desperately and make last minute decisions. And if you have the means, stock up on essential supplies you need to conduct your business to give yourself breathing room if things go awry.

     

  6. Market: If your business depends heavily on sales in your local market, consider expanding into new markets. For instance, a local retailer could start an e-commerce store and reach new markets by running advertisements on social media.

     

  7. Environment: Every small business should be prepared for local situations such as a hurricane or storm that causes power outages or knocks out the internet. If you run a brick-and-mortar business, also be sure you have plans in place to keep your operations running if you experience flooding or another weather-related disaster.

How key advisors can help you identify areas for improvement

When you’re dealing with complex and fast-changing challenges, you may not know what you don’t know. Your banker, accountant and attorney can be valuable members of your advisory team and help you spot solutions and alternatives that aren’t on your radar.

 

How to build a business culture that fosters resilience

In addition to your advisory team, your employees can help you keep your finger on the pulse of emerging challenges in your business, so you don’t get surprised later on. Holding daily or weekly “huddles” and regular town halls can help you keep the lines of communication open and strengthen bonds.

 

Ultimately, no business owner can do it all alone. By unlocking the potential of your team and making the best possible use of the resources you already have, you can position your business to keep growing no matter what the economy does.

1 Bank of America 2023 Small Business Owner Report, p. 5.

2 Bank of America 2023 Small Business Owner Report, p. 11.

3 Bank of America 2023 Small Business Owner Report, p. 2.

4 Bank of America 2023 Small Business Owner Report, p. 3.

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