If you’re running a business, you’re probably prepared for predictable breakdowns, like an internet outage, a web server going offline, or a dip in revenue. However, some unforeseen events can do significant damage if you’re not prepared.
From legal challenges to natural disasters, there are a lot of disruptions that can impact your business.
Here are 5 of those potentials along with insights and strategies to mitigate the impact.
1. Legal issues (but not the ones you think)
Legal problems can sneak up on any business, but if you think you’re just at risk of being sued by angry customers, think again. One potential setback you may not have considered is being arrested. If your business depends on you to manage daily operations, getting arrested can force you to shut down for a period of time, causing significant revenue loss. Depending on the charges, it could negatively impact your reputation.
Even though it may not seem like the most likely situation, it could happen. The best way to prepare is to know your rights so you don’t make mistakes that will increase your charges. Invoke your Constitutional right to remain silent and get a lawyer as fast as possible. If you’re facing federal charges, you need a skilled federal criminal defense attorney. Federal charges are different (and more serious) than state charges, so make sure you hire legal counsel with experience.
To cover the cost of hiring an attorney, get liability insurance that covers legal fees. You may not need to use it right now, but if you ever need it in the future, you’ll be glad you bought the policy.
2. Serious cyberattacks
Many business owners ignore cybersecurity because they don’t believe they’re ever going to be targeted. They mistakenly believe that cybercriminals intentionally select their targets and only go for large corporations. That belief is false. In reality, small-to-medium sized businesses (SMBs) are the top target for cyberattacks because they’re the least prepared. For example, in 2021, 82% of ransomware attacks were launched against companies with fewer than 1,000 employees.
If you haven’t invested in an iron-clad cybersecurity strategy yet, it’s time to get that handled. Attacks can happen at any time without warning, and if you don’t have a backup and recovery plan at the very least, you could lose everything you’ve worked hard to create.
To enhance your cybersecurity protection, make sure all company accounts require multi-factor authentication so that a password is never enough to log in. Keep your software updated, train your employees, and back up your data on a regular basis. Don’t hesitate to hire a cybersecurity professional to asses your specific situation, and take the time to create a custom business continuity plan.
3. Natural disasters
Natural events like earthquakes, floods, and hurricanes can cause serious disruptions to your business. Even when you know it’s a possibility, they still catch you off guard.
The first thing you should do is make sure you have insurance policies that will cover the damage. If you’re in an area prone to flooding, it’s worth rethinking the buildings you use. Seek higher ground if possible or use buildings that have a taller foundation.
Regardless of what kinds of natural disasters your area experiences, you need protocols for maintaining operations both during and after a disaster. For instance, if you have employees, be ready to enable remote work for a period of time until business operations can return to normal.
4. Leadership absence
Imagine hiring the best Chief Executive Officer (CEO) you could find, they lead your company to new heights, but then they suddenly announce they’re leaving. When key personnel leave unexpectedly, it can seriously disrupt your business by removing important strategic direction.
The best way to recover from the absence of important leadership is to ensure key processes are well-documented so they can be handed to someone new, and have a plan for assigning temporary leadership roles while you transition into a replacement.
5. Regulatory changes
Just when you thought you knew all the data protection regulations in your industry, a new law comes out and changes the game. There’s no way to avoid this, so be prepared to conduct process overhauls to avoid penalties for non-compliance. Consult with an attorney to stay on top of changes so you don’t miss anything.
Proactive planning builds resilience
Unexpected disruptions are a normal part of doing business, but with proactive planning you can make it through even the most challenging times. The key is to have a plan before a crisis hits, have strong contingency plans, and stay flexible when things shift.
Whether it’s a legal issue, a storm, or a global pandemic, the businesses that survive unexpected disruptions are the ones that prepare early.
