Why so many companies didn't have risk management in place when COVID hit
So, when COVID hit, I thought it would pass. A few weeks of hysteria and then we would be back to normal. A small bump in the road.
Even when I was succonded back to Australia as the borders closed, I still felt that people were over-reacting and everything would go back to normal. It was only when I arrived at LAX airport did I realize that whether I liked it or not, this was going to affect me and my business.
As the weeks dragged out, and clients asked to postpone their retainers, it hit. This was serious, if for no other reason but the fact that the effects on the economy were not temporary but would sustain for quite some years.
What changes need to be made?Like many entrepreneurs, when I accepted the inevitable, I quickly moved into action. How would I ensure that my business gets through this period of time? What changes would I need to make? Is my business still relevant? What changes could I make to ensure that we get through this period of time and survive with everything intact?
I didn't pause. I moved into action without hesitation. I had afterall hesitated enough and I had no real plan in place. Instead, I went back to basics like many entrepreneurs and stopped 'hoping for the best'.
No risk managementWhat became apparent was that I had no risk management in place. Sure, I have it for hackers or losing a few clients, but not a risk management solution that would deal with a situation like a pandemic. This COVID-thing came out of nowhere (or did it?). How do you prepare for that?
I lived through the 80's and while I was only a child, I was inquisitive. I watched how my family and other families operated and the 'adult conversations' were something that I was forever earsdropping on. Now, I am grateful for being a little earsdropper because I learned so much. When reality sunk in, I took action. I stripped back every area of my business and went back to basics. I even stopped spending from a personal point of view. I didn't get bored and spend hours surfing the net to buy clothes or cosmetics. Instead, I saved every penny across every area of life. Basically, I worked out what I could survive on and started saving money.
Change of mindsetThis type of behaviour takes discipline and a change in mindset. What do I need and what don't I need? That same philosophy works in the office. Who do you need and who don't you need. Who is performing, and who isn't.
It took a few weeks for employees to jump in and be counted. They paused, became confused, were scared and in some cases got a little depressed. What that meant is that their minds were not clear to do their best job. A discussion had to happen and to their credit they changed, they focused, they put in their performance.
We are still powering through and are fortunate to have a business model that has allowed us to be able to do that.
The biggest lessonBut the big lesson here is simple. Every business needs risk management plans in place. Think about all the possible scenarios and what your business needs to do to get through it. How can you pivot, change, adapt and deliver exceptional service to your clients?
And last but not least.. you need a good accountant and financial planner. Without them, I would not be in the position I am in today.