10 tips to make your small business more resilient

If we’ve learned anything over the past few years, it’s the importance of resilience for small businesses. There is almost certainly more that any business can do to build resilience. Here are our 10 tips to help your business do just that. 

Business owners report improved resilience

Reassuringly, our latest research shows that businesses feel better able to navigate headwinds post-pandemic. Why? Because this tumultuous experience forced them to think outside the box. 

The five years since COVID-19 have been some of the most challenging in recent history. Economic uncertainty, geopolitical tensions, a change in government, and the cost of living crisis have all presented enormous challenges, but small business owners like you continue to persevere for small businesses. But still they’re here, weathering storm after storm. 

1) Consider all three aspects of resilience

Financial resilience

Perhaps the most prominent aspect of resilience – having access to cash, capital or other resources helps to make a business more stable against external shocks. 

Having access to financial resources isn’t enough in itself. A business needs to be confident that it could use these in difficult situations, surviving increases to core operational costs.

Operational resilience

Business set-ups need to allow for strategic pivots where required and be flexible to various external factors – be that customer demand, changing regulations or competitive landscapes. 

Personal resilience

Finally, a factor that may be wrongly overlooked: resilient business leadership. This relates to  an individual’s ability to make a business work under any circumstances, bounce back from hard times, and respond to stressful situations.

Two businesses with similar financial and operational set-ups may react very differently to a challenging situation based on the personalities and actions of the people running them. 

2) Create or expand your contingency plans

While risk assessments and contingency plans don’t sound too exciting, they allow dedicated time to think about the potential barriers your business might face – and come up with solutions. 

A contingency plan outlines how your business should operate in the event of a disruption or disaster. This can include things like fire or flood, supply chain disruption, cyber attacks, legal threats, or even lockdowns. It can also include late client payments or what happens if key employees become seriously ill or resign.

By looking at your key risks, you can minimise their impact and speed up recovery.

Find a step-by-step guide on how to create a contingency plan here.

3) Find the weaknesses in your business

Identifying any areas of the business that have the capacity for flexibility or adaptability is important. But what about those areas that have little room for manoeuvre?

Are you too reliant on a specific supplier, partner or employee? Does a high proportion of your revenue come from a single product that could dip in demand?

These matters may be out of your control, but considering what the potential dangers are is a good start to become more resilient. 

4) Test new ways of doing business

Economist Tim Harford¹ argues that trial and error is a better determinant to success than strong or expert leadership in almost any field.

One of the key features of effective trial and error is to test things in ways that are survivable. As a small business, always look for areas in which you can try out new ways of working, where failure won’t be destructive.

Try new sales methods, marketing tactics, product lines, back-end systems – so long as you don’t lay everything on the line for them. 

5) Seek out new sales channels

Ask yourself, are there other ways in which you can reach new or existing customers? 

The most obvious example of this for brick-and-mortar businesses is online channels, but it could also include different offline sales channels, new marketing methods, or working with partners and distributors to expand reach. 

6) Build a stream of regular customer feedback

Whether you run an independent boutique on a high street or a manufacturing equipment supplier, giving yourself as much opportunity as possible to hear from your customers is vital to operational resilience.

Exposing yourself to their views of your business, others in the market and general opinions they hold will put you in a far more secure place when it comes to shifting attitudes or behaviours.

What you do with those opinions is up to you, but make sure that you’re hearing as many of them as possible.

7) Create mechanisms for staff to make suggestions

Your people are your biggest asset. Employees can be your greatest brand ambassadors, drivers of customer delight, sources of innovation and more. But do they feel valued?

Having long-term and highly motivated staff will have a big impact on your ability to adapt to circumstances outside of your control.

To retain the best people, it’s essential that they feel heard. Make time to check in with your team and ensure they feel empowered to suggest new ideas or ways of working. 

8) Build downtime into your personal routine

As a business leader, taking a step back once in a while is vital for protecting your mental health.

We know that leading a small business can feel all-encompassing, but taking a step back at regular intervals is vital to ensure you’re able to keep driving your business forward over the long term. 

9) Book a holiday

Yep, you read that right. Booking a holiday can make your business more resilient.

When it comes to taking leave, while it’s not always the case that ‘more holiday equals better mental health’, our research found that there does seem to be a minimum threshold to protect your wellbeing. 

Your attitude to your wellbeing can set the tone for your employees. Set minimum annual leave policies or encourage staff to take time off regularly throughout the year. 

Looking after your own mental health is key, but so is looking after that of your employees.

10) Consider a staff wellbeing initiative 

We found that focusing on employee wellbeing is a key factor to business resilience, and making it a top priority is strongly linked with success.

It’s about adopting a mindset that prioritises happy staff. Ask yourself, how can you support employee wellbeing by investing in and implementing specific initiatives? For instance, appointing a mental health first aider shows a commitment to actually improving staff wellbeing, not just paying lip service to it.

To help, Funding Circle has partnered with Thrive Mental Wellbeing, an innovative, full-service mental health provider trusted by the NHS.

This partnership is available to all small businesses in the UK to help level the playing field for SMEs and enable all businesses to give their employees the mental health support they need. You don’t have to be a Funding Circle customer to benefit.

If you are already a Funding Circle borrower, please contact your account manager to get your unique access code. If not, fill in a few details to get an exclusive discount code here. 

Building financial resilience 

Implementing these tips will help build your business’s operational and personal resilience. If you need help to improve financial resilience, our specialist finance could help you invest, boost working capital, or manage cash flow.

Explore which product might suit you best, and get a decision in as little as one hour. 

01/06/25: While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.