Trading conditions have been unpredictable for a while now and, for many businesses, the costs keep climbing.
It has always been true, but is perhaps more relevant than ever, that businesses that build resilience into how they operate weather difficult conditions far better than those that simply react once trouble arrives.
Over the next few weeks, we're publishing a short series on what resilience actually means for a business and the practical steps you can take to build it.
So, let’s set the scene before moving on to look at how you build resilience in your finances and your operations before finishing on the people side of the business.
What does business resilience mean?
Business resilience is a company's capacity to see change coming, prepare for it and adapt once it arrives, whether that's a gradual shift in trading conditions or a sudden shock.
A resilient business doesn't just react to challenges as they land. It has already proactively put structures in place, both financial and operational, that reduce risk and create room to manoeuvre when something goes wrong.
You can never entirely eliminate risk from your business, but creating a more resilient business ensures that when problems do arise, the business already has plans in place to mitigate and manage them.
Why this matters now
Every business goes through periods of pressure at some point, whether that's rising costs, a difficult client relationship, a key supplier failing or wider economic headwinds.
At the moment, the focus for many will be rising costs and uncertainty that come from the current geopolitical uncertainty, but previous shocks have included the pandemic and, before that, the financial crisis and credit crunch.
It may feel like the world is moving from one crisis to the next, but the businesses that come through these periods well tend to share one trait – they are prepared and ready to act.
Building resilience shouldn’t be seen as a one-off project. It's an ongoing discipline and one that needs revisiting as your business and the world around it change.
What's coming next in this series
In the next post, we'll look at financial resilience, covering practical steps such as building a cash reserve, forecasting cash flow, stress testing your finances and reviewing how your business is funded.
From there we'll move on to operational resilience, looking at your client base, your supply chain, the technology you rely on and how a business continuity plan can keep you trading through a serious disruption.
The series finishes by looking at your team, including the risks that arise when critical knowledge sits with one person and how key person cover can help protect the business if that person is suddenly unavailable.
This is the first post in our four-part series on building business resilience.
Next: Building financial resilience →
