How To Build Business Resilience

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Saphia Lanier
Saphia Lanier



Over a half million small businesses fail every year. Of those, roughly 22% are only a year old when they close their doors for the final time. The 50% of businesses that make it past the five-year mark are considered successful. 

Business resilience

The businesses that succeed don’t just have a competitive edge, superior product, or management team with good decision-making skills. In most cases, they are the businesses that faced significant challenges that forced them to adapt, shift their strategies, and grow in new and often unexpected ways. 

In other words, they are the businesses with resilience. 

Unfortunately,95% of business leaders admit to needing crisis-management-capabilities improvement. If you’re in a similar boat, then your business could be shuttered by the next calamity. 

Business resilience definition

Business resilience refers to a business’s ability to anticipate, prepare for, respond, and adapt to disruptions to maintain continuous operations.

It involves managing risk and responding effectively to unexpected events that could negatively impact operations, such as emerging competitors, natural disasters, cyberattacks, or financial crises.

Business resilience vs. business continuity

Business resilience and business continuity have similar concepts but different focuses.

For instance, business continuity is when an organization can continuously operate, even during challenging times or natural disasters. It involves having plans and procedures in place to keep operations running normally while maintaining exceptional customer service.

For example, a small retailer might stockpile supplies to ensure it can fulfill customer orders and have alternate sources for materials in case of supply chain issues.

Business resilience, on the other hand, goes beyond simply continuing operations during hardships. It involves a company’s ability to adapt and recover from disruptions, ensuring that it can continue to thrive in the long term. Resilient businesses are better equipped to handle unexpected challenges and are more likely to emerge stronger from them. One reason is because they adapt and innovate in the light of adversity.

For example, a business may develop new processes or procedures to manage supply chain issues. It could also create additional sources of income, such as offering online services or new products, to counterbalance any losses caused by the disruption.

Business resilience examples

Covid tested businesses large and small, and only the resilient made it out.

In March 2020, the pandemic shuttered over 3m US businesses during the lockdowns, and roughly 400k closed permanently by June 2020. And guess who fared the worst — the small-business owner.

Those that remained found ways to pivot their operations to stay in business for the long haul. An International Journal of Disaster Reduction survey found 63% of American small businesses switched how they served customers, and 56% changed how they procured supplies. 

Here are a couple of examples of small businesses that were resilient during and after the pandemic:

  • Natoli’s Italian Deli in New Jersey pivoted during covid by bringing seats and tables outdoors and selling groceries when everyone stopped ordering sandwiches. The demand for groceries was high, so the owner opened another grocery store across town. 
  • Java Game Haus Cafe in Jacksonville pivoted during covid from being a social gathering and event spot to a warehouse-like setup for processing online orders in 2020. This carried them over, and two years later, the husband-and-wife owners are looking to expand. 

But a pandemic isn’t the only challenge that businesses have faced over the years. They’ve also gone through recessions and, in certain areas, natural disasters. Others have dealt with the unexpected departure of a business partner, cybersecurity attacks, and countless other serious issues.

For example, Sally Day, director of Saltoria Marketing, a UK virtual marketing agency, and her then-partner, launched their business in July 2020. Given the nature of the pandemic, the two designed a flexible and agile model to ride the unpredictable waves of the business landscape. 

“We offered multiple packages to suit businesses at whatever point they were at (e.g., one-off projects or monthly retainers),” says Day. “This meant we weren’t restricted by one way of working or charging, and could work with the business's objectives and budget. Our retainers are built to be on/off for maximum flexibility too, so people don’t feel bound to long and expensive contracts.”

The impending cost of living crisis affecting the UK made hiring full-time employees challenging. So instead, they outsourced many tasks to experienced freelancers from various marketing disciplines to build a team. This allowed them to:

  • Build a bespoke team for each project/client experience
  • Be truly flexible by only paying freelancers for what they do
  • Keep costs low and client fees competitive 
  • Cherry-pick the best talent for each project
  • Not worry about covering staff wages when cash flow is a concern

And just a few months ago, Day’s partner left back to Italy amid Brexit issues, and she now has to deal with solopreneurship for the first time. 

“It’s been nearly two months of solo entrepreneurship, and I’ve found it really tough, but I’m trying to remain positive and excited for the future,” shares Day. 

Since she no longer has an accountability partner, she connects with local marketing consultants to collaborate and feel like a team again. She’s also taking measures to prevent burnout

"I’m putting basic boundaries in place around my daily routine, like not working late and saying no to things that don’t truly excite me."

How to build business resilience

Building business resilience involves creating systems and processes that make it easy to respond quickly, effectively, and efficiently to unexpected disruptions. 

According to McKinsey, these are the five ways businesses are building resilience: 

  1. Creating resilient operations. Companies are redesigning their operations and supply chains to be more flexible and resilient. This includes having global and regional suppliers and cross-training their workforce to manage different areas of the business in the event of workforce shortages. 
  2. Adopting Industry 4.0. Going digital is an affordable and agile way to maintain productivity and connectivity with each other and customers. Those that haven’t already are digitizing their operations to make them more efficient. 
  3. Allowing spending transparency. Companies can improve their spending strategies by increasing transparency around capital and expenses. For instance, tech-based methods speed up cost transparency, reducing the effort of performing calculations manually from months to weeks or days. Other digital approaches may include procurement spending analysis, inventory rebalancing, and capital spending diagnostics. 
  4. Embracing workplace automation and technology. More companies are allowing employees to operate remotely using collaborative tools. Businesses are also using automation to remove repetitive tasks to allow workers to be more efficient. This shift will require training employees to use new technologies. 
  5. Becoming agile. Fast-changing shifts in consumer demands and industry structures requires businesses to adapt fast. This may include reimagining how you run your operations to bring value to customers. Some examples include rapid product development, customer experience innovation, and digitization.

These are just some of the options businesses can employ to maintain resilience. The key is finding what works for your business and customers so you emerge from challenges stronger and more competitive. 

Steps to create a business resilience plan

Creating a business resilience plan is essential for any organization looking to ensure its long-term success. Here are some tips for creating a comprehensive, effective plan:

  1. Identify potential risks: Before creating your resilience plan, understand the types of disruptions your business is susceptible to. This might include natural disasters, cyberattacks, supply chain issues, or economic crises. In compiling a list of risks for your business, consider your industry, competition, geography, and any regulations you may be subject to.
  2. Assess the potential impact of each risk: Once you have identified potential risks, assess the potential impact of each one and prioritize them accordingly. This will help you to create a plan that’s tailored to your organization’s needs.
  3. Develop a response plan: Create a comprehensive plan for responding to and recovering from disruptive events. This plan should be as detailed as possible, including details such as who’s responsible for each step and what resources are needed.
  4. Involve all stakeholders in the process: Include all stakeholders, such as employees and investors, in the process to ensure a successful outcome. This way, everyone knows their role in responding to disruptive events.
  5. Test the plan: Regularly test and practice the plan to ensure it’s up to date and effective. This can be done through drills, simulations, tabletop exercises, and more.
  6. Review and update the plan: Your business resilience plan should be a living document that’s regularly reviewed and updated. As your business evolves, so will your risks, and your plan should be flexible enough to adapt to these changes.
  7. Continuously monitor the environment for changes: Monitor external factors such as regulations, technology trends, customer needs, and the competitive landscape to anticipate potential risks.

Once you have a business resilience plan in place, you can focus on monitoring how well it works. 

How to measure business resilience

Measuring business resilience will determine how well your business will stand against whatever life throws its way. To effectively measure your business’s resilience, assess the following areas:

Response time: Monitor how quickly your business detects and responds to disruptions. This includes both internal responses, such as IT security threats, and external responses, such as natural disasters or economic crises. 

Recovery time: Assess how quickly your company recovers from disruptions. This includes restoring services, retrieving data, and returning to normal operations.

Adaptability: Evaluate your organization’s ability to adjust its operations to changing circumstances. This includes adapting processes, adjusting budgets, and responding to new regulations or customer needs.

Risk management: Monitor how well your organization can identify and address risks. If you struggle to manage risks, then there may be gaps to fill or better management processes to put in place.

Financial stability: Evaluate how well your business maintains its financial well-being during a crisis. The ability to generate consistent revenue, maintain cash flow, and manage expenses is critical during unexpected events. 

Supply chain: Evaluate your business’s ability to maintain a stable supply chain during unexpected events. If your suppliers are unreliable, consider adding new or additional options to your network. 

Employee morale: Identify how well your organization retains employees during a crisis event. If it struggles, then it could be that employee morale needs improvement. 

Business resilience is all about how well you can foresee and plan for potential risks. But don’t just plan ahead — practice ahead to keep your workforce on its toes. 

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