Perhaps it’s ironic, that days after publishing my last blog about managing risk, the post suddenly disappeared from my website.
Luckily, the reason was simple. I had transferred my web hosting service, so the post just got lost as things moved over. Can you imagine – putting in the work to get a blog posted, and then poof! it’s just not there any more?
Not a massive risk or enormous problem you may think; but consider all that work and the time, think about the fact that I had posted out to my mailing list with information about the blog – and it wasn’t there.
Well, this is where looking ahead about what could go wrong comes in.
Things going wrong on your website is a real cause for panic if you don’t see yourself as a tech person, but it’s such a common problem we should all be prepared.
How was I prepared?
I make sure that all the written material that goes on my website – page copy, blog posts – are saved as Word files in a Cloud-based storage system (Dropbox). This means if anything goes missing it’s just a cut-and-paste exercise to get it back.
The added bonus?
Storing all my files in the Cloud means that if my laptop gets nicked or my PC blows up, I haven’t lost a thing!
So, last week’s post is now proudly back up, as you can see!
[BTW – all the images on the website are stored in a file on Dropbox too!]
When I asked in my last blog, “what, in life, or business, ever goes 100% right?”, I was referring to exactly this type of scenario.
Examples include:
- An anonymous person leaves you a negative review online.
- You begin an important presentation, only to find the tech isn’t working.
- Your laptop dies, taking all your hard work with it.
- Your child, parent, or pet falls ill, meaning you have to drop everything to care for them.
- A major client tells you they’re moving to a competitor.
- A trusted supplier goes bust.
- You’re tied into an expensive contract (such as for office space) for something you no longer need.
I could go on! I’m sure you could, too.
But before you accuse me of being a prophet of doom, remember this:
Anticipating what could go wrong is a big part of managing business risk. Why? Because it allows you to put strategies in place that help you put it right again.
(In fact, instead of panicking, you could even start to enjoy the sensation of something going wrong, because you’ll know exactly how to deal with it!)
With all this in mind, here are some more in-depth ‘risk management’ tools to help you sleep more easily at night.
Step 1: A PESTLE Analysis
Large companies regularly analyse every aspect of their business in detail, to make sure they’re properly prepared for any possibility.
There’s no reason why we, as micro or side hustle business owners, shouldn’t do the same. So, grab a piece of paper (or open up an Excel spreadsheet if you prefer!) and let’s get started.
You may have heard of PESTLE before, as it’s a very popular risk management tool. A PESTLE analysis takes a ‘big picture’ view of the environment your business is working in:
- P – Political
- E – Economic
- S – Social
- T – Technological
- L – Legal
- E – Environmental
Many larger companies will use PESTLE to help them stay ahead of their competition; it helps them respond more quickly to wider issues that are likely to affect their industry as a whole (think of Brexit under ‘Political’, for example, or the recent UK floods under ‘Environmental’).
But it works just as well for very small businesses too. What if you sell luxury, high-end products and there is a sharp, economic downturn that means people are watching their pennies (Economic)? What if you put lots of time, energy and cash into building a website and the company that built it and hosts it goes out of business (Technological).
Size is not a factor in PESTLE; context is.
Step 2: A SWOT Analysis
Where a PESTLE analysis looks at bigger-picture factors that can have an impact on you and your business, a SWOT analysis is a little bit closer to home.
A SWOT analysis allows you to analyse the levels of risk specific to you and your business:
- S – Strengths
- W – Weaknesses
- O – Opportunities
- T – Threats
It’s my view that, as a micro or side hustle business, a SWOT analysis should be looked at as two halves.
The S and W is about you as the business owner: What are your personal strengths and weaknesses? Should you work on making your weaknesses less weak through personal development and training, or outsource those things to someone else? Are you really making the most of your strengths? Do you actually know what your strengths are?
The risks caused to your business by personal activity are just as real – just as destructive – as anything external to the business.
The O and T is about the business: What are the opportunities available to a business with your products and services? What could seriously damage your ability to build a successful and profitable business? Opportunities could include a greater understanding of what you do better than anyone else. While threats could include things like levels of business debt or cashflow.
Once you’ve finished your analyses, you can start putting together a plan that will help you overcome all the challenges you’ve identified.
This can be a hugely powerful process – because now you’re taking genuine care and control of your business!
To use the old cliche – by doing this you will be working ON your business, not just working IN your business.
Step 3: Ensure You Insure Your Business
Remember: we take out insurance policies in the firm hope and belief that we will never have to use them. But, it’s Sod’s Law that if we aren’t insured things always go wrong!
Unless you employ people, most micro businesses aren’t under any legal obligation to take out insurance.
However, It’s my belief that public and/or professional indemnity insurance is essential.
If a customer slipped on your salon floor, or a client decided to complain about professional negligence, for example, will you be able to afford to pay damages? You need to be adequately covered so that you (and your business) is not out of pocket.
Use your risk analyses to help you decide whether or not your business could benefit from additional insurance. If you rent premises, you may want to insure your furniture and equipment. If you work in an area that is vulnerable to flooding, you could benefit from business interruption insurance. If you have a family that relies on your business paying you an income you may need to consider critical illness or sickness insurance.
Key Takeaway
The moral of the story is that while we can’t possibly predict everything that could go wrong, we can take what we do seriously enough to protect it.
We can create strategies that will help us take back control of our businesses (to use a well-worn phrase!) when things go wrong.
Have you conducted any risk analyses for your business? Did anything interesting come up? I’d love to hear your experiences, so please post them below.
If you’d prefer a more in-depth conversation about overcoming micro risk through preparation, simply book a Breakthrough Session with me today.
[…] all very well, imagining the worst. You’ve done your PESTLE and SWOT analyses and you’re certain you’ve forecasted just about every possible business disaster scenario […]