How to Get Ready for Your First Entrepreneurial Crisis

You don’t have time for a crisis when you’re running a small business. Here’s the problem: You can be sure that a crisis will eventually come knocking on your door. Whether the crisis stems from external sources like a global pandemic or internal problems such as a lousy customer interaction that goes viral, you’ll be expected to deal with it like a pro.

That’s hardly a minor responsibility. Depending upon the severity and extent of your crisis, you might need to refocus most of your time addressing it. However, you can make the process less overwhelming by taking a few steps ahead of time.

1. Outline a Corporate Crisis Management Process

You can’t anticipate what each crisis you’ll encounter will look like, but you can brainstorm how you want your team to react when a crisis occurs. Approximately 62% of organizations say they have a crisis management plan ready. Ensure you’re in their ranks and not one of the 38% that aren’t set up to react promptly and systematically to a crisis

As part of your planning, think about the most likely crises, such as data breaches and supply chain snags. More than eight out of 10 companies dealt with cybersecurity breaches in 2022. And nearly two-thirds of small businesses have faced supply chain disruptions. After coming up with your list of potential crises, you can start outlining what you want your company and its people to do afterward. This isn’t a fun activity, but it could save you time and trouble if a crisis erupts.

2. Keep Notes on How Other Leaders Deal with Crises

During the height of Covid shutdowns, CEOs faced crisis after crisis. Ironically, a huge crisis was how they were seen publicly, especially when they had to lay off workers because of the sudden economic downturn. Airbnb’s Brian Chesky was praised for his empathy when cutting a sizable part of his workforce. In contrast, Better.com’s Vishal Garg was vilified for showing a lack of empathy when he was in the same boat.

You don’t have to scour the internet looking for leaders’ reactions to crises all the time, but pay attention when events bubble up. Thinking about what you would do in a similar situation could help you. If nothing else, it will give you a better understanding of yourself and the type of executive you want to be.

3. Think From a Place of Opportunity — Always

In the middle of a crisis, you might not automatically think, “This is a great opportunity for our company to [fill in the blank].” Yet opportunities can exist even in the greatest of challenging moments. A great poster child for returning has been Peloton, with its recent ups and downs. The company’s showing great resilience though facing quite a bit of upheaval and uncertainty.

It can be hard to train yourself to see possibilities when problems surface. It’s worth refreshing your outlook, though. Not only will you weather storms better, but you’ll be a stronger role model for those around you. The last thing you want is for your managers to crumble during the chaos. If you tend to bring a positive view to a crisis, your people will, too.

4. Close Gaps That Could Lead to a Future Crisis

No one can foresee every crisis. That said, sometimes a crisis can be noted and averted by paying attention. Many businesses have gaps in their workflows that could become the gateway to a crisis. By identifying those gaps, you can give yourself the chance to close them effectively.

What types of gaps should you look for? Anything that creates a point of friction is fair game. Are you getting a lot of customer complaints about one particular product or service concern? Fixing what’s wrong can bypass a future dilemma. As a side benefit, your team can operate more efficiently and productively.

You might not see yourself as a crisis manager. Nevertheless, you’ll probably play that role at least once in your entrepreneurial career. By taking preemptive steps, you can ensure you have a ready answer when a crisis comes calling.