Safety. Safety means different things in different situations. Here we are discussing Business Safety. This has nothing to do with OSHA regulations or safety equipment. However, safety equipment is something of a theme when we discuss business safety.
What exactly is business safety? It is the ability of the business to get through periods of downturn in the business. What kinds of downturns? Some of these are:
Economic – One need only look back a few years, to 2008, to understand the impact of an economic downturn throughout the country to understand how this impacts your business. Many businesses failed, struggled and conducted large layoffs.
Legal – Laws get passed that impact businesses all the time. Rarely are these without cost to a business. In fact “Crain and Crain estimated the per employee cost of complying with Federal regulations at $10,585 for businesses with fewer than 20 employees.”
Environmental – Blizzards, hurricanes, earthquakes. Each of these can have a serious impact on a business. Most often these can be weather conditions locally that create power losses for several days or restrict access to your business. In many states road ,construction and repairs interfere with business access for months on end causing a decline in sales.
Political – Like legal issues, political issues can also challenge a business. Your industry could suddenly become the “political flavor of the month” and you find yourself defending what you do. Tobacco found themselves doing that. Here in the agricultural belt we find political issues regarding the use of well water, runoff into lakes and streams, debate over where our facilities should be located, such as large wind farms.
Each of these will have some impact on the business and could easily impact business revenue. Having the right strategy in place will help ensure the business gets through this downturn period and in some instances even thrive while others are seriously declining or even closing their doors.
What kinds of strategies or actions can a business take to help it get through periods created by the issues above? While not a complete list, each of these should be considered. Not individually, but together, to ensure the balanced integrity of your business and to help ensure its safety.
Error Management – Improving quality with a goal toward eliminating error will help reduce cost and contribute to positive customer experiences. A higher quality improves both your reputation and your brand. Products and services that are as promised, without error, will be in greater demand than those without.
Waste Management – Improving productivity and efficiencies. Waste is a significant cost adder. Whether it is time, paperwork, process, it adds to your cost of production and, as a result, forces you to charge more, or profit less.
Delivery/Production Management – Refining supply change management, costing and material management. Managing your costs, whether from the materials you use or where and when you get them, helps you maximize your overall production and ensure a better product.
Channel Marketing – Refining market research, cost of sales and improving diverse new first-time business leads. The broader the market you serve, where you get your customers from, will provide enough diversity to meet any challenge. The greater your reach, the greater your safety.
Customer Retention – Repeat sales from existing customers. Keeping customers is significantly less expensive than finding new ones. Further, their purchases from you can become predictable helping to ensure a steady revenue stream.
Team Building – Maximizing employee engagement and performance incentives. Every business will face the same challenges. The single greatest competitive edge you have is your people. Engage them and incentivize them, you will prevail in any situation.
Cash Management – ensuring adequate cash supplies on hand through retained cash earnings, cash supply in an amount necessary to continue operations during periods of business shortfall. Making certain that you have a specific amount of cash in your checking and savings account helps ensure against long-term economic challenge. Access to credit will help your business grow.
Effective well thought out strategies like these will help ensure the survivability of your business in any situation. Diagnosing the strengths and weaknesses of your business will help you determine which of the 7 strategies to give your first emphasis on, but understand you will want to focus on all 7.