May 28, 2020 | Mark Dorman, AIF, CLU, ChFC, CEPA, CFBS, President
We are living in historic times, navigating our way through a “black swan” event. In the finance and business world, that term means an extremely rare event, one that is impossible to predict and with wide-spread often negative ramifications. The term is inspired by the unlikely event of seeing a black swan among a group of white swans. Before the COVID-19 pandemic, previous black swan events included the 2008 financial crash, the 2001 dot-com bubble, the 9/11 attacks and Brexit.
The current pandemic has had a devastating effect on the US economy — especially on small businesses. Can you prepare for these rare and catastrophic events? Can you protect your business, your customers, and your employees from the impact? Even with rare and unanticipated events, preparation and planning can make a difference.
Making the most of my COVID-19 downtime
Like many of you, my own business came to a near standstill in mid-March of 2020. I was still reaching out for some quality conversations with clients and prospects, but honestly, I had a lot more open time in my daily schedule. I decided to discipline myself to use that time to think about and improve my business.
I challenged myself to learn something new that would help me better serve my clients – so I enrolled in my first virtual continuing education program. I enrolled with the Exit Planning Institute and completed an intensive 50-hour executive MBA-style program to earn my Certified Exit Planning Advisor (CEPA) designation. I challenged myself to improve my knowledge base so I can better serve clients and to set an example for my team. The COVID-19 crisis gave me that time to look ahead and plan for a better future.
What are you doing to plan for a better future – and potential disasters?
This coronavirus epidemic is a great wake-up call. It’s caused almost every business to change its operations, either temporarily or permanently. And it should be a warning bell to start planning for the next potential crisis.
Rather than trying to guess what kind of “black swan” will arise next, consider the ones most likely to happen and certainly to affect your business:
- Death of a company shareholder, key employee or owner: Of all the “black swan” events, this one has the highest probability of happening. We will all pass someday – we just don’t know if it will happen during our working years or later. Now is the time to address this issue and have the conversation about a Business Continuity Plan, either with your financial planner or with the team of experts at Legacy Business Advisors. For this most likely of the “uncertain events,” it’s relatively easy to prepare in advance and be certain your business will survive and thrive.
- Technology disasters: The current crisis quickly demanded a shift to a remote workforce with access to essential files. Many businesses were left fighting to scrape together the IT tools needed to work in a virtual space. To prepare for a crisis but also to be address your current business demands, it’s critical to be prepared with the right tech infrastructure and a trusted IT partner. Companies also need to understand their data usage and redundancy capabilities and how to prevent sudden natural disasters like a lightning strike from wreaking havoc to network or internet access.
- Supply chain: Surprise events can be a shock to your supply chain. Some of our manufacturing colleagues have recognized the danger of sourcing materials from just two or three key vendors. Someone recently shared with me that he never would have guessed that one of his smallest vendors based in Italy would have the greatest impact on his business, causing critical delays and eventually a complete shut-down when no other part source could be found.
What else can go wrong?
We all want the economy to recover from this COVID-19 crisis. Right now, it’s too soon to tell the long-term impact on many businesses. But when recovery does come, let’s walk away with lessons learned. Let’s walk away with plans made and contingencies in place to protect our businesses from the next crisis lurking on the horizon.
I’m always ready to talk about how your business can grow for today and prepare for the future. Pick up the phone and give me a call – before a new “black swan” arises.
Mark Dorman is passionate about helping small businesses plan for success and achieve peace of mind. He’s worked with business owners for more than 30 years and is founder and president of Legacy Business Advisors. For the past 15 years Mark has focused on transition planning and exit strategies. He is also founder and managing partner of TAB Western Reserve (The Alternative Board), a peer coaching and advisory group for small business owners.
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