A large part of success in business is about being able to think ahead and anticipate what’s around the corner. The companies that are best able to think ahead are the ones that will spot opportunities before other people and be able to capitalise on them, and they’re the people who will stay one step ahead in terms of their tools and their methodologies.
But perhaps the most important way that a business should think ahead, is by thinking about potential disasters and pitfalls so that they can avoid being caught out by any unwanted surprises. In order to be a good business man or woman, it pays to be at least a little bit paranoid.
Of course though this paranoia needs to be channelled in the right direction if it’s going to protect your company’s financial future though and if it’s going to help your business become more resilient. Read on and let’s take a look at some of the things you can do to guard against disaster.
Insurance
The most obvious way to protect your company’s fortunes against potential disasters is to take out insurance against them. This way, should your office be burned down, or should you find yourself unable to pay back loans, you won’t be left to pay for the damage on your own. Take out insurance in different forms to protect yourself against as many different disasters as possible – both financial and physical – and leave a little money aside somewhere safe too to serve as a ‘personal’ insurance policy.
Revenue Streams
If your business relies on a single revenue stream to stay afloat, then you should recognise that that puts you in a dangerous position. Say your entire profits come from the sales of a single product, then it only takes for that product to lose popularity for you to find yourself struggling. The more diverse the products and services you have, the safer you will be against things going wrong. And if you don’t believe me, then just take a look at the success of the Virgin brand.
Margins
If you need a huge turnover to generate any profit, then it only takes a small lull in business for you to find your business starting to struggle. If you have larger profit margins on the other hand, then you will only need a few clients in order to stay afloat. Keep your overheads down and your income high and you can weather most storms. The best accounting software can help you to keep track of where you are losing the most money and what you need to do to change.
Flexibility
Also important is to ensure that your business is flexible and versatile. That means having staff with wide ranging talents, and it means making it possible for you to continue running your business remotely. Ask yourself what would happen if you were forced to operate without accessing your office – would you be able to survive?
About the Author: Thomas Barker works for Grants Management Systems, a company that provides financial management software. During weekends, he works for a local non profit organisation and helps educate unprivileged kids.
Cover photo credit: David Goehring
