Home Business Types of Crisis Your Business May Face and How to Resolve Them

Types of Crisis Your Business May Face and How to Resolve Them

by Olufisayo
Business Crisis

Just like people, a business will encounter a crisis (minor or major) at some time during its existence. No business is always smooth-sailing, each will have to face challenges that could either make or break them.

As long as the necessary crisis management plans have been put in place there is usually some light at the end of the tunnel. Generally speaking, all businesses should have some sort of plan in place in order to be best equipped if it happens. If you are a business owner, you should incorporate crisis management planning into your initial business plan upon inception.

If you are UK-based and have not as yet established any crisis management plans for your business, it is recommended you do so ASAP. An Insignia crisis management plan ‌for your business may be a good place to start.

This company has experience in crisis management planning for businesses across many diverse sectors and being based in the heart of England, are well-placed for meetings at any location throughout the UK.

Types of Crisis a Business May Face

Although your business in its lifetime may not face any significant crisis, the importance of preparing for the unexpected is absolutely crucial. Please see below for a list of potential crises a business may face:

       
  • Financial Crisis – This type of crisis, generally speaking, occurs when a business can’t afford to pay its debts. The causes for this type of crisis usually result from a drop in demand for company’s products or services. The company will need to move money around in order to cover short-term costs.
  • Personnel Crisis – A personnel crisis occurs when an employee or someone closely associated with the company is involved in illegal or unethical practices. Whether this occurs within the workplace or outside, it can seriously call into question the judgement shown by the company in hiring the individual, this in turn has a knock-on effect to the company’s overall reputation.
  • Organisational Crisis – This is a potentially very serious crisis and happens as a direct result of a company wronging or misleading its consumers. Changing company culture is generally the best way of correcting this type of crisis with company-aligned employees stepping up where necessary.
  • Technological Crisis – In this day and age where almost every management system in the country is IT-based, a technological crisis has the potential to be catastrophic for the business, unless remedied quickly.
  • Natural Crisis – Although a full blown natural crisis in unlikely to hit businesses in the UK, it is still wise to prepare for the worst if your business is located where it might be exposed to extreme weather. Freak weather conditions do occur from time to time. Better safe than sorry.

What Risk Management Companies Can Do For You

A well-regarded risk management company can help reduce the damage caused by the types of crises detailed above. The plans that they help put in place mitigate any damage caused and clarify the best courses of action to get the company running at optimum levels again.

As previously mentioned, you may never encounter a significant crisis within your company, but it pays to put the apparatus in place in case of the unexpected.

Related Articles

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.