Plan to Reduce the Risks in Your Business - "Send not to know for whom the bell tolls…."Carillion (noun) a set of bells for playing tunes.
Plenty has already been written and much more will be written about the demise of the construction and facilities company Carillion, I am not going to enter that debate.
The important thing for me is the effect that it will have on the direct and indirect suppliers to Carillion.
The title for this article “…send not to know for whom the bell tolls….” Is taken from a poem by the 16th century poet John Donne. It starts “No man is an island, Entire of itself. Each is a piece of the continent, a part of the main.”
The point is that Carillion is not an “island” and its collapse will not just affect it, but all its suppliers and all the suppliers down the chain. Companies that do not think that they are affected by the collapse may find that one of their customers has suddenly disappeared leaving a hole in both their order book and their balance sheet.
Carillion is not the first major company to collapse and it probably won’t be the last. Larger companies may be able to ride out the storm, but for SMEs it could be a major problem.
January is typically a time for businesses to look to the future and start to act on the plans they have put in place (or maybe start thinking about their plans). As part of that looking to the future, there is the opportunity for smaller businesses to look at how they are set up. They should review what their risks are and think what the consequences could be, and how they would react to a major event, like the collapse of a key customer.
Once that has been done the business can think about how to manage that risk.
I have worked at companies where they realised that one customer was too big a part of their business. Over a period, they changed the make-up of the customer base so that the reliance on that customer was reduced.
I have also assisted a company where they didn’t acknowledge that that was a risk and when their major customer went bust they eventually went out of business themselves.
It was a much happier experience to work at the first company, compared to coming in to manage the decline of the second!
If you are a smaller business that has been affected by Carillion’s demise and you haven’t got the internal resources to guide you through the choppy waters, then get some professional help from someone like your accountant, or IDR Consultants.
Similarly, if you haven’t been affected by Carillion, but want help to look how you can plan with a risk strategy in place, talk to someone like your accountant, or IDR Consultants.
It is never too late to start planning for the future.
#carillion #planning #sme #risk
19th January 2018