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Be a Good Boy Scout

Be Prepared

Be a Good Boy Scout

By: Ross Paterson

Any of you who ever participated in the Boy Scouts know the motto “Be Prepared.” As we continue our series on Leadership in a Crisis, here is a little truth:

XM Truth:  The best way to deal with a crisis, is to avoid it.

How to earn your Small Business Crisis Insurance merit badge.

1. Build a Cash Reserve: 1

Statistically, small business owners are over extended on debt, have no cash reserve, and pay themselves less than they made in their last ‘job.’  When a crisis hits, Money = Time.  And quite often time is exactly what you need to make assessments, measure fall out, and regroup your strategy and team.  As soon as possible in the evolution of your business, start building a Cash Reserve, 2-6 months of expenses is a good rule of thumb.  Simple, but not Easy.

2. Build Contingency Plans

Several of our clients work in medical and insurance businesses which can be changed overnight by federal and state legislation.  How high is the risk in your business and market?  The higher the risk, the more defined and real your contingency planning needs to be.  Expand your portfolio for diversity, anticipate changes, and get close to the legislative process so you know before the competition.  ‘Hope’ is not an approved business strategy.

What else can small businesses do to avoid a crisis?

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