Is your business equipped to navigate an unexpected financial crisis?
Expect the unexpected. The key to crisis management is to plan for a variety of scenarios, in order for forge a plan for survival.
What is Crisis Management?
Crisis management is when a business creates a plan on how to manage and recover from an unexpected crisis. Effective crisis management from a Finance Director will provide a business with expert financial guidance on how to best respond to the crisis that has occurred, so that the directors can make a quick and informed plan to limit damage.
Crisis management differs from risk management. A crisis is usually unforeseen and unavoidable, with the potential to cause irreversible damage to a businesses finances, reputation and market position. Some examples of a crisis include a market crash or fraud. Risk management is the identification and mitigation of activities that pose a threat to a business, such as poor management or a new competitor entering the market.
What are the Benefits of Crisis Management?
As mentioned above, Crisis Management does not solely sit with a Finance Director, and your part-time Finance Director will feed into your overall board with their expertise. Having a Finance Director provide guidance in this area can lead to the following benefits:
Ensure you are approaching the crisis with a cost-effective approach
You can move faster towards recovery than you would without a plan
Prepare other areas of your business for the financial impact
You can reduce financial damage by ensuring your business reacts in the 'right way'.
Why Do I Need a Finance Director for Crisis Management?
Every scaling business should consider having a Finance Director as part of their crisis management team. While we can hope that your business will never face a significant crisis, they unfortunately can occur. By prioritising Crisis Management, you can sleep easy knowing your business is prepared for whatever situation is to come the next day - plus, you could save time, money and stress if the situation is dealt with appropriately.
While your existing board of Directors will ensure to look at the crisis from their own perspectives and feed into the overall crisis response strategy, a Finance Director will provide unique financial expertise on how to financially prepare and respond to the occurrence - while an HR Director might look at how to manage employee understanding of the crisis. The Finance Director therefore plays a crucial role in the overall crisis management strategy.
When is The Best Time to Seek Crisis Management Support?
Crisis Management should be a priority for any scaling business - however it is never too late, if you have already scaled! The sooner you are able to prioritise Crisis Management, the more likely you are to be prepared if something goes wrong. Unfortunately, unlike risk management, it requires an expert to be ready from the moment the crisis takes place. If you are reading this and are concerned you are not financially prepared if a crisis occurred, get in touch with our specialist team, who will align with you one of our part-time Finance Director's for their expertise.
How Can I Get Help With Crisis Management?
Our finance experts are on hand to help you effectively manage a future crisis. With an abundance of experience across multiple industries, you can be confident in our experts to support you with the daunting prosepct of an unexpected crisis.
How we can help
At The Finance People, we provide flexible and affordable finance expertise to SMEs and startups. Our team of Finance Directors, Finance Managers and Finance Controllers work with your business in line with your requirements - anywhere from 1-3 days per week on a flexible contract. Get in touch to get started.