So far in this series we've looked at what business resilience means and how to strengthen your finances. Money matters, but it's only part of the picture.
This post looks at operational resilience, the systems and relationships that keep your business running day to day.
Diversify your client and revenue base
Relying too heavily on a small number of clients or a single revenue stream, creates real vulnerability. Losing one major client can threaten the stability of the whole business.
Where you can, aim to diversify your client base so that no single customer accounts for more than 20 to 25 per cent of total revenue. Growing revenue from clients you already have, through complementary products or services, is often a faster and cheaper route than chasing new ones.
Strengthen your supply chain
Disruption to your supply chain can seriously affect your ability to deliver for your customers, so identifying and addressing weaknesses here is a key part of operational resilience. Steps worth taking include:
- Identifying single points of failure and developing alternative supplier relationships
- Reviewing contract terms to make sure they include appropriate protections
- Building buffer stock for critical materials where that's practical
- Assessing the financial stability of key suppliers
Embrace technology to build efficiency
Manual systems that work fine at a small scale often become bottlenecks as a business grows or comes under pressure.
Cloud-based accounting and operational tools give you far greater visibility and control than spreadsheets and paper trails ever could.
Investing in scalable technology, from cloud accounting software to automated invoicing and CRM platforms, reduces the administrative load on your team and gives you real-time financial data to support decisions when it matters most.
Create a business continuity plan
A business continuity plan sets out how your business will keep operating through a significant disruption, whether that's a cybersecurity incident, the loss of key premises or a director suddenly becoming unavailable. A good plan should cover:
- Key risks and their likelihood and potential impact
- The steps to take if each risk materialises
- Roles and responsibilities for managing a crisis
- Communication plans for staff, clients and suppliers
- Recovery timescales and what success looks like
If you already have a plan, make sure it's reviewed regularly so it still reflects the scenarios most likely to test your business.
Coming up next
Financial and operational resilience count for little if the people running the business aren't supported too. In the final post of this series, we'll look at building resilience in your team.
This is the third post in our four-part series on building business resilience.
← Previous: Building financial resilience
Intro to business resilience
