You're potentially Phil11th March 2020
You know how there’s always one guy for whom everything seems to go wrong?
One of our directors, Shirley, swears that’s her husband Phil.
If a mistake is going to be made at the bank… If there’s ever going to be a mix-up at work… If there’s any kind of freak incident…
…he’ll be involved.
It’s become a bit of a joke – Phil getting into yet another one-in-a-million situation… again.
Now, I’ve never asked, but I think we can safely assume that Phil has every form of insurance going.
He knows that the chances of something going wrong for him are high, so I’m sure he’s done his best to mitigate as many risks as possible.
What about the rest of us?
If you’re like most people, you probably have house insurance, car insurance, and maybe some health insurance or critical illness insurance.
When it comes to our personal lives, we all know enough people who have had their car written off, or been suddenly struck by serious illness, to know that while it’s unlikely…. It could happen to us.
It’s not always how we feel about business, though.
Business risks are all around us. Market conditions could suddenly change… Your competition could suddenly improve…. The government could suddenly introduce new regulations which hit you hard. Coronavirus could decimate your industry overnight…
Yet all too often, companies don’t take even the most elementary steps to protect themselves against such eventualities – ie, working out what risks they realistically face, and planning for them.
It’s not really logical, because we all know many businesses that failed, so things go wrong in business the entire time!
But somehow, we get so caught up in the day-to-day pressures of running our business, that we don’t find time to plan for these eventualities, which feel remote.
Here’s the thing, though.
None of the possibilities I mentioned are in any way remote… They’re happening right now.
Market conditions are changing. A few months ago, you could argue over whether or not we were going to leave Europe – now it’s a certainty, and if you do any kind of business overseas (or rely on suppliers or customers which do), this will affect you. For certain.
Plus, for the first time in many years, the government has a massive majority which will enable it to effectively do whatever it wants. This is going to impact business regulations, taxes and so much more… Possibly within 24 hours, when the budget is delivered.
Chances are, your competition is improving – and at the very least, changing.
If you’re in anything to do with motor vehicle manufacturing, energy, telecoms, publishing, your industry has undergone massive change over the past few years, and will continue to do so.
The same is true for dozens of other industries. And we all depend on digital for promotion, which is similarly evolving every week.
As for Coronavirus, since I wrote about this last week the economic impact has been considerable. I know people in the travel industry whose businesses have been destroyed – or close to it – overnight.
They are despairing because of an external event which they have no control over… And were just not ready for.
The bottom line is that change is unavoidable…
And the pace of change in the world today is speeding up.
That means that when it comes to business, we are all potentially Phil!
We all face serious business risks, here and now…
Not just those I outlined, but also staff leaving, serious mistakes being made, changes in the exchange rate, the failure of your biggest clients or suppliers…
…And so much more.
Large, well-run businesses manage these risks, firstly recognising them and secondly working out potential plans of action.
That’s why they are so resilient…
…Because even if the exact scenario they mapped out never comes to pass, they have thought through the possibilities and started to think of solutions – giving them a starting point.
Essentially, they’ve taken out insurance against things going wrong.
If you want to start running your business in a more professional, grown-up way, you need to do the same.
Here at Insight Associates, we work with companies turning over more than £1 million, which are eager to run in a more professional, grown-up way.
And part of our Outsourced Finance Department service is to help you manage risk, because doing so is crucial for the financial resilience of your business.
If you’re ready to take that next step up in the way you manage your finances, give me a call on 01279 647 447 or email me today, and let’s talk about how we can help you.