BP’s environmental and financial disaster from their Gulf oil gusher has many important lessons for entrepreneurs.
First, have you identified major events that have a high probability of occurring in your business? The recent and still ongoing recession has dropped revenues by a third or half across many industries. Although interest rates are low, accessing credit is much more difficult.
Second, do you have a plan that addresses the major risks you face? If the president is in the hospital, who does what? Who takes control and makes decisions? What are the steps?
Third, have you tested the plan? Remember the school fire drills where we ran outside into frigid weather? Have you tested your computer backup and disaster recovery processes?
Finally, BP has huge financial resources to fund some clean up costs and they are selling off other valuable assets to generate more cash. How will you fund your survival mode?
Here are some key steps for business owners and entrepreneurs to protect their reputations and business wealth:
- Talk to your lawyer about a Power of Attorney so that someone can keep your business running if you can’t.
- Have additional signing officers through your corporation, such as corporate secretary or treasurer, who can enter into contracts and other legal agreements.
- Set up additional people to sign cheques. This could be a combination of a trusted employee and a family business member, or some other combination of reliable people, individually or in combination with others, who can keep the cash flowing.
- Write out your current organizational chart, and then what the organizational chart would look like without you.
- Communicate these steps to your management team.
Your reputation and business wealth can take hits from many different directions. As a former boy scout, remember: Be prepared!
Copyright 2010 Phil Symchych. All Rights Reserved.