Limiting Business Risks For MSMEs

For Micro, Small and Medium Enterprises(MSMEs) to stand the test of time, entrepreneurs must adopt the right crisis management strategies.. 

This will ensure that such adopting firms have the needed shock absorber to mitigate whichever risks they may come the way of such businesses. his or her way.

In the end, it ensure that MSMEs are able to perform their civic duties and responsibilities, observe its financial obligation as well as protect the financial network of such businesses and the owners of such enterprises.

To this end, CMC Connect Group charged operators of MSMEs and the Limited liability companies to take urgent steps to deploy crisis management plan to mitigate the exposures of businesses to risk and uncertainties.

Crisis Management In Business 

Group managing director, CMC Connect (perception managers), Mr. Yomi-Badejo-Okusanya, noted that, crisis management was important to inspire business confidence, adding that, crisis happens all the time, most times, unannounced, hence, Its therefore important for organisations to take crisis action plan seriously.

The performances of the global sector, according to him, switched consumer brands to have a crisis management plan for businesses to thrive, adding that, this would ensure that adequate structures are in place for businesses to operate.

“Checks revealed that between Q2 & Q3 2020, 27% of businesses in Nigeria suffered a major impact from the coronavirus pandemic, with only 9.9% of the respondents having a crisis management plan in place while 59% never had a crisis management plan before the COVID-19 pandemic,” he said.

Hence, he noted that, crisis management plan would provide strategic roadmap for crisis by employing a 3-step approach – Prepare, Manage and Recover to guarantee business sustainability, recovery and continuity in spite of any crisis.

 “When a crisis occurs, there is a breakdown of trust between the organisation and its stakeholders. Trust is a currency on which stakeholders trade, and it defines their loyalty and goodwill. Once this is disrupted, the organization is on its way down.

“However, crisis preparedness presents an opportunity to rebuild trust and gain customer loyalty. Many organisations have rebounded from major crisis to dominate the industry.”

He further said: “crisis itself is not an end but could be taken advantage of if planned for. This is where your crisis preparedness comes in, requiring skills and expertise in managing and maintaining propriety in the middle of a  storm.”

Commenting on the issue, another expert, Jerry Sawyerr, also reiterated that this strategy is not limited to organisations but also to government and individuals who are concerned about sustaining their brands regardless of crisis.

He said, every limited liability company must have a crisis manual as part of the requirement for registration before being allowed to operate, much like having a fire escape plan for building before approval by the government. 

Risk Management Strategies

The mitigation activities that your business can prepare can be wide ranging depending on your industry, geography, size, and other factors. These initiatives may include activities such as shifting budgeting from fixed costs to variable spending to provide flexibility in times of uncertainty.

These are five risk management steps that organisations should think about as they defend themselves against the pandemic.

 Readiness Assessments: A readiness assessment is a good place to start when organizations don’t know what their business continuity program should comprise. Industry and role readiness templates as well as pandemic-specific templates allow an organisation to evaluate their business continuity programme against a best practice standard and identify where gaps may exist.

Risk Management Plan: All organisations should complete a risk assessment on their core business processes to identify and prioritise any new risks or gaps in their existing controls for new scenarios like pandemics, recession, and geopolitical conditions risks.

Business Impact Analysis: Not all risks within processes or functions within an organisation should be treated the same way. A business impact analysis allows organisations to identify which parts of the business are most critical to its operations. 

Policy Management:. For example, reviewing and revising a work-from-home policy will be effective only if dissemination of that revised policy is made with governance tracking for adoption across the organization.

Incident Management: Incident management is typically a highly siloed activity embedded within a process. In times of change management, a unified enterprise-wide mechanism is needed as an input to evaluate the effectiveness of mitigation and policy activities as well as to manage the exceptions, which are typically 20% of all activities.