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Business resilience strategies for the second half of 2023

Andrew Ayiku Business News Jun - 20 - 2023 , 14:38

The current proliferation of products and services highlights the need for businesses to adapt to unexpected external shocks and rapidly changing market conditions and regulations.

Small businesses are the first to suffer the devastating effects of a recession.

This alignment requires drive, flexibility, determination and many other skills and values that help entrepreneurs navigate through times of crisis.

Resilience means understanding the importance of business processes, the capabilities of underlying technologies, the impact of technology failures on the business, and the risk tolerance of the organisation.

Resilience is essential for small and medium-sized enterprises (SMEs) to meet challenges, adapt to change, and thrive in the face of adversity.

Small business resilience strategies are actions small and medium enterprises (SMEs) can take to improve their ability to withstand and recover from shocks and disruptions.

Small businesses can use a variety of resilience strategies to overcome challenges and build long-term sustainability, especially for the rest of the year 2023.

Diversification

High reliance on a single product or customer can make small businesses vulnerable to market fluctuations and disruptions. Diversifying revenue streams helps small businesses reduce risk and maintain stability.

This includes opening new markets, expanding product and service offerings, and targeting different customer segments.

Diversifying your revenue streams can increase stability, reduce risk, and seize new opportunities.

I advise entrepreneurs to introduce new products and services that complement existing services, reach new customer segments, and generate additional revenue.

Entrepreneurs also not only identify untapped markets and customer segments suitable for their businesses but also forge partnerships and form joint ventures and strategic alliances with other companies and individuals to share resources and also benefit from each other's customer base.

Agile and Adaptable

Small businesses can become more resilient by fostering an agile and adaptive mindset. Stay up to date on industry trends, market changes and new technologies.

We are open to innovation, open to new ideas, and willing to adjust our strategy and business model as necessary to remain competitive and respond to market trends.

I advise management to foster cross-functional collaboration and allocate resources to innovation.

It also requires a customer-centric strategy to engage with customers regularly and understand their evolving needs and preferences.

Entrepreneurs also need to use technology to streamline operations, increase efficiency, and stay competitive.

Promote a learning culture that considers the company's personal and professional growth.

Entrepreneurs should adopt sound financial management practices to ensure they have the resources they need to seize and capitalize on opportunities.

Avoid rigid hierarchies and structures that impede rapid decision-making and adaptability.

Be sure to adopt a flat organisational structure that allows for a smooth flow of communication and allows you to react quickly to changing customer requirements.

Collaboration and networking

Build strong relationships with other small businesses, industry peers and business support organisations.

Collaborate on joint projects, share knowledge and resources, and leverage common strengths.

Networking provides opportunities for mutual learning, access to new markets, and potential partnerships during difficult times.

I encourage entrepreneurs to join trade associations and chambers of commerce, especially since these organisations often host networking events, seminars, and workshops where SMEs can connect with other businesses, exchange ideas, and explore collaborative opportunities.

Small business owners need to attend relevant trade shows and conferences, have important conversations, and connect with individuals and organisations that align with their goals.

Develop a contingency plan

Identify potential risks and disruptions and develop contingency plans to address them. Identify critical risks such as supply chain disruptions, natural disasters and cybersecurity threats and develop strategies to mitigate their impact.

Having a contingency plan in place can help small businesses respond effectively to crises and minimise downtime.

Business owners are encouraged to prioritise risks once they have been identified based on risk likelihood and potential business impact.

In addition, you should identify critical resources, suppliers, and systems that are prone to interruptions, as well as backup options.

This may include alternate suppliers, redundant IT systems and backup power. We also need to think about diversifying our supply chain to minimise reliance on a single source of supply.

Monitoring and evaluation

Continuously monitor and evaluate business performance, market trends and customer feedback.

Regularly review and update your strategy to ensure it responds to changing market conditions. Stay agile and adapt as needed to stay resilient and seize new opportunities.

Andrews Ayiku, Lecturer/Business Coach, University of Professional Studies Accra
ayiku.andrews@upsamail.edu.gh