Small businesses unprepared for supply chain threats
The vast majority of small businesses are woefully unprepared for disruptions that may result from cybercrime, severe weather and staff losses, new research shows.
According to the Federation of Small Businesses, only 35% of companies have a suitable plan in place to manage potential supply chain issues or operational problems.
Designed to assess the stability of supply chains and to identify would-be problem areas, the research revealed a worrying lack of preparedness.
The predominant risk for small firms was found to be late payments and the associated problems that result – identified as an issue by 51% of businesses.
Losing pivotal members of staff would be a problem for 37% of firms, while IT problems and cybercrime were identified as major threats in 29% and 17% of cases respectively.
Severe weather and terrorism were also identified as factors that could lead to severe business disruption, with smaller firms deemed to be at greater risk as a result of having less resources.
The FSB has said that larger businesses should support those in their supply chains by providing assistance with forward planning.
National chairman Mike Cherry revealed that businesses need to have continuity plans in place, while those already facing difficulties may require other methods.
Businesses fearing financial issues may want to seek corporate advisory services to decide on the best approaches to take, while having contingency plans in place can ensure the best outcomes if the situation should worsen.
This helps to protect the longevity of a business, especially if any issues should arise, such as an insolvency further down the supply chain.
The key is to identify potential risks to business operations and to mitigate those as far as is possible should they actually occur.
Failures in the supply chain will often have a domino effect and can leave further businesses in difficulty if they have not planned ahead.
For this reason, businesses of all sizes are encouraged to proactively consider potential risks and to plan accordingly, and to act as quickly as possible at the first signs of trouble.
By Phil Smith