Do you have plans in place for coping with a severe disruption to your business? According to recent findings by the Federation of Small Businesses, most UK small firms are completely ‘unprepared’.
The Federation of Small Businesses (FSB) outlines a variety of internal and external threats that it believes could cause significant problems for many small UK companies.
Two of the most common risks to businesses are customers who fail to pay for goods or services (see our tips on managing cashflow) and the loss of key personnel. The FSB also identifies a number of other risks, such as:
- IT problems
- severe weather
- transport issues
An estimated 65% of small businesses don’t currently have any plans in place to deal with disruption to their business operations or their supply chains. With the uncertainty of a future post-Brexit, businesses should consider making business continuity planning a priority.
Mike Cherry, National Chairman of the FSB, said: “By implementing continuity plans, small firms can prepare for many of the sudden changes that can impact on them directly and their supply chains.”
The FSB has called on larger businesses to assist smaller firms with forward planning. It has also been urging the local government to reinforce the need for smaller businesses to have continuity plans in place.
“One key step towards ensuring a business is prepared for any supply chain difficulties is continuity planning. This includes identifying the most significant risks to a business’ commercial operations and creating a plan to mitigate those risks should any of them materialise,” Mr Cherry commented.
“The costs that businesses face when their supply chains are impacted can be severe and, therefore, it is crucial that we stress the importance of planning for the future.”
The FSB acknowledged that it is likely that most businesses can expect to experience “Some sort of business interruption issue more than once in their life.” But as well as sounding a note of warning, it is keen to stress smaller enterprises can keep buoyant – the key to this lies in strategic planning. “It is key to resilience that firms are encouraged to consider all risks that they could face,” Mr Cherry said.
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