Over 83% of risk managers updated their business continuity plans in 2021, while 77% of risk leaders believe new challenges and threats are rapidly emerging in business, according to a 2021 global risk management study by IT services company Accenture – indicating that continuity planning is an ever-increasing priority among businesses.
Planning for a fast-paced and rapidly changing business environment is a challenging task but it is crucial to business success. One way to ensure companies are prepared is through business continuity planning, which consolidates the critical information an organization needs to operate during unforeseen circumstances or unplanned events.
When creating an effective business continuity plan, it is important to understand how capital and cash, credit and insurance interact. Business owners with a strong grasp on operational costs and efficiencies will be well prepared to navigate difficult decisions during turbulent times.
Understand capital and cash, credit, and insurance
Small and large businesses that successfully navigate tumultuous financial times often have something in common: an ongoing focus on business continuity planning. When companies understand their cash and capital needs, it alleviates stress in other major areas that affect the future growth of the company, including cutback decisions around inventory, product offerings and staffing levels.
Banks, lenders and suppliers depend on credit reports to assess the solvency of a company, which guides whether they’re eligible for future loans. An organization’s credit score – which considers both its access to and use of credit – is a powerful tool that can enhance a company’s cash and capital position. Being able to access needed credit can create a smoother and more efficient decision-making process while mitigating risk.
Having a deep understanding of a company’s insurance is equally important. Unexpected events happen and insurance brings peace of mind and protection from unanticipated financial losses.
Make a plan
While many businesses have reassessed their financial positioning in the current markets, planning for the unanticipated directly benefits future strength and security. Companies that utilize continuity planning are better positioned to mitigate new and emerging threats in the ever-changing market, and in turn, give their businesses the space to grow and thrive. Visit the U.S. Small Business Administration’s step-by-step guide to learn more.
Bremer Financial Corporation is a privately held, regional financial services company with $16 billion in assets. Founded in 1943 by Otto Bremer, the company is headquartered in St. Paul, Minnesota, and provides a comprehensive range of banking, mortgage, investment, wealth management, and insurance products and services.