Surprises, Surprises…

A pleasant surprise is nice, but when it comes to Cybersecurity, surprises are almost never good. We don’t know what tomorrow will bring. As both individuals and businesses move forward, there is one thing we can all count on: Surprises. Some will be good, and some will be bad, and while no action involving happy surprises need to be considered, some measure of thought should be put into how we will deal with unhappy surprises.

Even though we don’t know exactly what detrimental events are on the horizon for us, we all need to have a plan on how to correctly identify disasters, react to them, and enact solutions.

What would you do if your business suffered a ransomware attack tomorrow? Do you have a contingency plan in case of a tornado, hurricane, fire, or earthquake? The unexpected can happen anytime, and small businesses will get hit much harder than ‘deep pocket’ mega-conglomerates.

Small and Mid-size businesses (SMBs) are the backbone the American economy. They create the most jobs in the U.S. and are driving factors for innovation and community development. But running a small business comes with significant risks, including financial uncertainty, market volatility, and natural disasters.

60% of small businesses fail within 6 months of falling victim to a cyber-attack.

Huge organizations like Exxon Mobile, Walmart, or Amazon can take major financial hits and weather the storm, but it’s devastating for most small businesses. Big or small, businesses must prepare for the unexpected as a hedge to ensure their longevity and success.

Any conceivable disaster that can disrupt your business should be addressed in an overall Business Continuity Plan, which details how to keep your operation running in the face of adverse conditions.

Take a Tip from the Boy Scouts: Be Prepared!

1. Create a Contingency Plan

Creating a contingency plan is the first critical step in preparing for the unexpected. Establish a set of procedures that help your business respond to unforeseen events such as natural disasters, supply chain disruptions, unexpected financial setbacks, or cyber-attacks.

In Exacting detail, this plan should outline the steps the business will take in the event of any type of emergency, and who will be responsible for what tasks, as well as how to communicate with employees, customers, and suppliers.

2. Be Sure to Maintain Adequate Insurance Coverage

Everybody hates insurance until they need it (and it comes through for them). SMBs should always maintain adequate insurance coverage to protect them from unexpected events. Insurance policies should include things like:

Liability coverage

Property damage coverage

Business interruption coverage

Data breach costs

These are all crucial, but focus on business interruption coverage, as it’s particularly important. It can help cover lost income and expenses during a disruption by unforeseen circumstances.

Aside from standard policies, it is important to have Cybersecurity Insurance. In today’s threat landscape, it has become a major consideration. This specific insurance covers things like costs to remediate a data breach and legal expenses.

3. Diversified Revenue Streams

You are at greater risk if your business relies on a single product or service, because unexpected events can prevent you from bringing your product or service to market, which is devastating in terms of cash-flow. Factors such as raw material shortages or a Teamsters strike could cripple an organization that does not have alternatives.

One way to help reduce this risk is by diversifying your revenue streams, which makes good business sense in general. Diversification ensures that your business has several sources of income to fall back on. For example, a restaurant can offer catering services. A clothing store can sell merchandise online as well as its physical location.

4. Build Strong Relationships with Suppliers

We at ITFIRM.COM build strong relationships with our vendors and suppliers in the same fashion we do with our clients, and every small business should do the same. People with whom you have good rapport will tend to ‘go the extra mile’ for you when the chips are down. This is particularly important for businesses relying on one supplier for their products.

Having strong relationships is always a sound business practice, but especially in the event of a disruption. It mitigates the risk of a supplier bankruptcy or supply chain issue. Having supplier options can help reduce the impact on your business.

5. Cash Reserves!

Sometimes this can be difficult, but for many small businesses these days, saving for a rainy day by diligently adding to your cash reserves can certainly help you weather unexpected events and cover unexpected expenses like repairs, legal fees, or loss of income. As a rule of thumb, businesses should keep at least six months' worth of expenses in cash reserves.

6. Build Strong Outsourcing Relationships

If business owners try to do everything in house, they’re at higher risk. For example, if a key IT team member quits, the company could face major security issues through a shortage of manpower.

Build strong outsourcing relationships with an IT Services provider and other critical support services. If something happens to your company’s staff or systems, you will have a safety net.

7. Keep a Regular Eye on Your Financials

If you don’t know where you are financially, you won’t be able to get where you want to go, so file this in the folder marked ‘DUH!’ SMB owners should know the state of their finances at any given time. This is to ensure that you stay on track to meet your goals and to identify any potential issues early on.

This includes:

Tracking income and expenses

Creating and reviewing financial statements

Regularly meeting with a financial advisor

8. Invest in Technology

This is simply another commonsense practice: technology aids productivity. Investing in technology can also help SMBs prepare for unexpected events – specifically with automation and Artificial Intelligence (AI). For example, cloud-based software can help businesses store their data off-site. This ensures that it is safe in the event of a natural disaster or cyber-attack. Technology can also help businesses automate processes. Automation reduces the risk of errors and improves efficiency, while AI can perform simple, yet time consuming tasks, lessening the burden on workers. Consultation with your IT services provider is recommended.

9. Ongoing Employee Training

Go beyond the occasional fire drill. Small businesses should train their employees for emergencies. This helps ensure that everyone knows what to do in the event of an unexpected event.

This includes training for natural disasters, cyber-attacks, and other emergencies. Businesses should also have a plan for communicating with employees during an emergency. As well as ensure that everyone has access to the plan.

10. Stay Up to Date on Regulatory Requirements

Yet another commonsense practice: always keep abreast of any changes in regulatory requirements. This helps ensure that you are compliant with all laws and regulations as non-compliance penalties can be costly – especially if you have suffered a data breach. This includes tax laws, labor laws, and industry-specific regulations. Non-compliance can result in fines, legal fees, and damage to your business's reputation.

To summarize, do everything you can to weather bad surprises. Your small business faces many risks, but by following these tips, you can be better prepared deal with the unexpected.