Resilience series, Part 2: The impact of global events

Earthquakes. Tornadoes. Hurricanes. Volcanoes. Tsunamis. Wildfires. Pandemics. 

The global events we’ve experienced over the last several years seem endless. And that means disruptions to the stock market, supply chains, finances and regulations. Unfortunately, disasters will continue to occur— there’s no real way around that. The good news is that you can prepare your small business to be resilient in the face of global adversity.

In the second installment of this six-part Resilience series,* we’ll cover the impact global events can have on small businesses. Because natural disasters and other global happenings won’t diminish, we’ll look at ways you can protect your small business. 

The impact of global events on small businesses 

From natural disasters to global pandemics, many events can significantly impact businesses. 

  • Natural disasters. Events like earthquakes, hurricanes, floods and wildfires can disrupt both local and global supply chains. They can lead to short-term market volatility and have long-term economic impacts. 

  • Economic and political changes. Policy and regulation changes, along with large-scale elections, can impact business operations. Changes in trade policies, tax laws and those elected to office can affect the way businesses operate. 

  • Financial market shifts. Major shifts in currency values, interest rates or events like the 2008 financial crisis affect global markets and supply chains. Inflation doesn’t help with that, either. 

  • Public health crises. As we saw most recently with the COVID-19 pandemic, widespread health crises impact global economies by disrupting supply chains. They can also lead to government intervention and tank the stock market. 

  • Geopolitical events. Terrorist attacks, war and diplomatic conflicts create uncertainty around the world. This typically leads to instability in the stock market and disruptions in global trade and supply chains, particularly if major economic powers are involved. 

Ways to prepare your business 

You have no control over the next global disaster, and that can feel unsettling. However, what you can do is prepare your business so you’re able to navigate these challenges and remain resilient. Here’s how: 

  1. Conduct a risk assessment. Before doing anything else, identify the potential risks for your business and location. Is your area prone to earthquakes or mudslides? Do local or national elections impact your industry? 

  2. Create an emergency plan. Craft an emergency response plan with steps for each possible risk you’ve identified. This should include communication procedures for your employees and staff, any evacuation strategies, and steps for securing your assets. 

  3. Get insured. Ensure your business has adequate insurance that covers a range of risks specific to your business. This may include property damage, inventory loss or business interruptions. Speak to a knowledgeable party and be sure to keep your policies updated. 

  4. Build a financial cushion. Create an emergency fund to help your business stay above water if a disaster occurs. If possible, create multiple recurring income streams and reduce unnecessary spending. 

  5. Diversify supply chains. Avoid working with a single supplier and look into using a local vendor. If you build a portfolio of alternative suppliers, you’ll have a backup plan for the next untimely event. 

  6. Strengthen technology and data security. If your business can support it, invest in technology that supports remote work and online transactions. Also, make sure your business data is protected with cybersecurity and regular data backups. 

Stay flexible and informed 

No one can predict the next global event, but you can do your best to mitigate harm to your business by being prepared. Stay informed about what's happening in the world and be ready to adapt your business model as needed. Resilience isn’t about surviving an immediate crisis— it’s positioning your business for long-term success and stability. 

*In the upcoming articles of this series, we’ll continue to explore the ways small businesses can remain resilient in the face of adversity. 

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