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Risk Management

Doing Business in an Unstable World

You can’t always foresee the unexpected, but you can be prepared for any eventuality.

Nadine Todd




The past few months have seen a slew of disasters hit the international economy. Earthquakes in New Zealand and Japan. Floods in Australia. Political unrest in North and West Africa. Have you taken a close look at your business and scrutinised whether you would be able to weather a similar storm?

Three local experts weigh-in on what businesses should be aware of, and how to put an action plan in place — after all, you can’t plan for a disaster when you are in the middle of it.

1. Put a plan in place before a disaster.

Called scenario planning, it involves thinking about everything you and your business do. Janine Hills says questions to ask yourself include: Who are your internal and external stakeholders? What communities and businesses does your business impact? How are your revenue streams generated? What are the potential risks to your business? How can these be mitigated?

2. Communication.

There are three important things to consider when planning a communication strategy. “First, are you able to contact all of your employees immediately?” says Hills.

“Second, how quickly can you release information to your staff, clients and the public? Who would spearhead this? Finally, what will you say? People tend to trust and respect transparency. If a disaster has occurred, be honest with your stakeholders. This will reassure them that you are aware of how the situation affects them, and are working to curb the damage.”

Always keep this golden mantra in mind: when the crisis passes, will you still have staff and customers? The answer to this question rests on how you deal with the situation, and communication is key.

3. Install systems.

Are there systems in place that ensure the business can continue without you? Your employees and customers should not be left in the lurch because something has happened to you or your management team. Who else has signing power or access to all the business’s passwords? Do you have insurance for yourself and your management team?

2010 saw Italtile experience a tragedy when its entire management team died in an airplane accident. Six Australian mining executives met a similar fate in the Congo. Put policies in place that ensure your entire management team does not travel together, and have succession plans in place in case the unthinkable happens.

4. Crisis management team.

“The human element is not a machine. It has variables,” says Hills. “Who is on your crisis management team and are they equipped to handle a disaster situation? Do they have adequate authority to make and implement decisions quickly and effectively?”

5. Multiple revenue streams.

“How many revenue streams does your company have?” asks Hills. “What dangers do they each face?” For example, companies reliant on chocolate are suddenly facing much higher prices because of unrest in the Ivory Coast. Do they have additional revenue streams to see them through the crisis? Evaluate all eventualities at each stage of your business to ensure that you can mitigate the risk.

Ask yourself this question: what is the one thing that could affect you? It could be a change in exchange rate, or the fact that you are completely reliant on container ships from China. Ensure you have a plan B in place if something affects your supply chain in any way.

6. Bricks and mortar.

How reliant are you on the physical structure of your business. If you run a factory, do you have one premises or two? What happens if that factory experiences severe damage? Will you be able to survive while you rebuild? Do you have adequate insurance? Can you quickly take your business online or operate from different premises?

7. Insurance policies.

What happens if you, as the owner of the business, die or become disabled as a result of a natural disaster? Will the relevant insurance policies pay out? According to Johan Olivier, it is common for insurance companies to contain specific exclusions on liability in their policies. These could include all liability for benefits should the client’s death arise directly or indirectly from a natural disaster or terrorism. Such exclusions are generally enforceable against the insured parties. How is your insurance policy structured?

8. Commercial contracts.

Do your contracts include a force majeur clause? Olivier advises these typically provide that the parties to the contract need not discharge any one or more of its obligations towards the other if it becomes impossible to do so owing to any cause beyond its reasonable control (including, without limitation, war, riot or natural disaster) taking effect after the date of the contract.

In such an event, no party has any responsibility or liability for any loss or expense suffered or incurred by any other party as a result of it not acting for as long as it is impossible to do so as a result of a natural disaster. Should the agreements not contain such a clause, the legal situation becomes complicated as one of the parties may still wish to hold the other party to their obligation.

9. Personal liability.

According to the New Companies Act, if the business cannot function or there is a loss of profit as a result of directors not adequately addressing potential risk, the directors can be held personally liable. This includes IT risk, says Ian Melamed. “If a natural disaster occurs and sensitive or essential data leaks or is lost as a result of negligence on behalf of the company’s management, shareholders can hold them personally responsible for damages,” he says.

10. Data back-ups.

According to Melamed, key questions to ask include: Where is your data stored? Is it off-site? How often do you check your back-ups? “Back-ups should be done — at a minimum — once a week, but how often do you check them?” he asks.

“A corrupted back-up file means you have no back-up file, even if it is carefully stored off-site. In addition, once you lose your original, your back-up instantly becomes the original, and you then effectively have no back-up. Back-up the back-up before you do anything with it — and check that it works.”

Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.


Risk Management

How to Take Risks That Win (Almost) Every Time

Knowing which risks to take, and how to take them, can be extremely helpful in stacking the odds in your favour.




Looking 13,000 feet down out of an airplane, parachute pack secured, your heart beating in your throat, must be one of the most terrifying experiences imaginable. Though not all risks are life-threatening, all risks are frightening. As humans, we’re constantly afraid of failure, of doing something wrong and of having to deal with the consequences. Yet, at the same time, there is nothing more rewarding than reaping the benefits of a risk gone right – of landing safely ground, to build the earlier metaphor.

For entrepreneurs, risk taking is a necessity of the job. After all, we’re never quite positive that things are going to work out the way we envision. We make choices daily which affect our business, and we can never be absolutely sure that we’re making the right ones.

Knowing which risks to take, and how to take them, can be extremely helpful in stacking the odds in your favour. While risks are unavoidable, approaching them strategically can be the best way to decrease your parachute’s chances of failing, so to speak, and to produce measurable results that you would never have achieved had you avoided the risk in the first place.

Related: Dream Big, Plan Well, Minimise Risks Says Braam Malherbe

In order to hone your risk-taking skills, here are some guidelines:

1. Information is your friend

The more knowledge you have about any given topic, the less risky your endeavours will ultimately be. For example, many of the most steadily successful brokers on Wall Street are those who understand the patterns of the market better than anyone else. While there are always going to be those people who make millions off a risky uninformed bet, they are the same people who most likely will lose all their earnings on a single trade. Traders who build a sustainable career for themselves are the ones that have deep knowledge of the industry.

Similarly, you should be an expert in your field. You should know your industry well – your product or service you are providing. You should understand the buying patterns of consumers, their motivation and pain points. What drives them to buy your products? Where and when do they buy? What makes them stop buying?

As an entrepreneur – or in any profession that requires risks, really – you’ll want to have as much information as possible. The more you know, the fewer unknowns there are. The unknowns, ultimately, are what makes an action risky.

2. Assess the risk carefully

While risk is a reality of life, there is also something to be said for strong assessment skills. Being able to look at a risky situation and decide whether or not it’s worth taking is a hallmark of a good businessperson.

Venture capital investors, for example, spend their entire careers deciding which companies are worth risking time and money on. Those who throw their money around recklessly, while admirable for their risk-taking, are not necessarily the most successful investors.

Being a good risk-taker involves using the information you have to assess a situation and decide whether or not the risk is worth it.

Related: 5 Infamous Risks Every Entrepreneur Must Face

3. Learn from failure

Appreciate that all risks are learning experiences. Especially those that don’t pan out.

On some accounts, failure is actually more valuable than success. While failures may not lead to an increase in your bottom line, you can use the opportunity to glean important information about what you’ve done wrong, where you misstepped and how you can move forward in the future.

The biggest mistake many people make is seeing failure as a measure of who they are, rather than a measure of where they can go. We’ve all heard that failure is feedback. Most successful entrepreneurs failed at many ventures before they created that million-dollar offering. Most overnight successes took many years to make. If you take a risk and fail, learn from it. Ask yourself what you can do differently next time, and then move on. The only failure is not learning the lesson that it provides and using it to hone your next endeavour.

According to Mark Zuckerberg, “The biggest risk is not taking any risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”

Taking risks is the only way to go from here to there. Even failed risks move you closer to your goals if you can turn that failure into valuable learning and a plan for improve your results next time.

This article was originally posted here on

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Risk Management

Are You Focusing Too Much On The Little Details (And Forgetting The Bigger Picture)?

To what degree do outside influences impact your business’s success? As a business owner, should you be focused on your business, or taking a macro view of the world?

Nicholas Haralambous




Entrepreneurs live in the daily grind of their businesses. This is unavoidable but can often be fatal. Day to day we think that the little things matter more than the very big things do. A little thing like the floor of your office or store being mopped daily can become a huge issue if not done.

Sure, these things are important because they create a culture of care and pride, but what you might be missing while you watch your team mop the floors is the macro-economic climate shifts that happen more rapidly than you think.

Step back to move forward

Early in the life of a new business the only way to survive is for the founders to do absolutely everything. From designing a logo and launching a strategy all the way through to writing tweets and emailing customers when there are issues.

This makes sense when you’re building a business, your team is small and your cash is tight. However, as you grow, it becomes important to let your people do their best and take on the day to day work.

Related: Expanding At The Speed Of Stress

As an obsessive entrepreneur it’s often hard to let go of these little details. Day to day operations will always be integral to the growth of your business and an important part of someone’s job in your organisation. However, it shouldn’t be yours if you are taking care of the big picture.

As the leader of your business you need to take a step back from the grind and look at the world around you.

To truly understand the positioning of your growing business you need to understand your country, continent and world.

You should understand the economic position you’re in as well as that of your province, country and even the markets that might directly influence your sales. Get a good understanding of the political stability of your country and the world.

Finally, you should figure out if there are any large- scale impending disasters. If disaster is imminent, like Zuma pillaging a nation and tanking an economy, then you have to get your head out of the floor mopping and into the high-level strategy of survival and preparation for disaster.

Move the needle


Every day there are 24 hours that you can fill. You can choose to work during that time and faff with the things that were once important, or you can figure out what is going to move the needle in your business.

What is going to really help you survive and grow in the years to come? Founders, CEOs and leaders need to be thinking about the next three, five and ten years. Let your team worry about today. Let the smart people you work with make today and tomorrow and next week work.

Chances are, the things you are doing in the hours/minutes aren’t saving your business or moving the needle. It’s the things that you plan for the next six months that affect the next five years.

Related: 8 Rules To Build Wealth When You Weren’t Born Into Money

Don’t live in a bubble

It’s easy to fall into the trap of thinking that you live in an isolated country or region that isn’t affected by world events. Unfortunately, no matter how hard you close your eyes and hide your head under the pillow you can’t avoid the fact that your business exists in a globally connected environment.

At Nic Harry we were affected by the Brexit events that unfolded in the UK and Europe. British shoppers were scared and didn’t spend their money when they were on holiday in Cape Town over the peak holiday season. I was so busy preparing for the seasonal uptick that I missed the link between a huge global event and my sales.

You live in a world that is filled with online shoppers and tourists who visit your business whether you know it or not. Prepare for the world to start having an effect on your business more and more.

Broaden your view

I am always fascinated by the narrow view of the world many entrepreneurs display. I may sell men’s socks, accessories and style but that doesn’t mean that the mining sector doesn’t affect my business.

Related: How To Plan, Prioritise And Get It Done Now

Even if you were an entrepreneur building a business in Antarctica I would urge you to read about oil prices, political world events and the intricacies of overfishing in the South American seas. Being well rounded and having a broad view of the world and your business can only make you a more robust thinker who sees more angles to exploit, protect against and thrive on.

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Risk Management

Why Adversity Is Actually The Best Thing For Your Business

There’s been a lot of talk about privilege lately: What is it? Who has it? Who doesn’t have it? I have a slightly different take on privilege and prefer to frame it as the privilege of adversity.

Allon Raiz




Studies across the globe show that the minorities in all contexts have higher rates of entrepreneurial activity than the incumbent majority. There are a host of reasons for this, but one of them is that adversity creates resilience and self-reliance that are vital for entrepreneurial success.

Every successful and exponentially successful entrepreneur that I have met or read about has transitioned through a baptism of fire. They have overcome insurmountable obstacles and used the lessons gifted through their experiences to rocket their business to the next level.

Related: Approach Adversity Head-On

The Five Gifts Of Adversity

A sense of where your true limits are. These are always far beyond what your belief system believed them to be. The experience of testing your limits breaks the preconceived notion of where your limits are or were.

Confidence. Once you have overcome an issue, the experience of overcoming it builds a high level of confidence that should the issue reoccur, you will have the ability and resources to overcome it. For example, if you lose your biggest client and manage to keep your business afloat, the next time you lose a big client you will not panic or become despondent, but will instead kick into action and claw your way out again.

Insight. Insight as to which of your non-financial resources you can tap into. When the chips are down and money is nowhere to be found, it’s amazing how many resources you will now perceive around you that can potentially help you transition to success. These resources come in the form of advice from friends, access to new markets through networks, credit from suppliers, and free promotion through networks, to name a few.

Your relationship with your own resourcefulness. The experience of not having resources but somehow manufacturing some out of thin air, recalibrates your sense of your own resourcefulness, which in turn builds a level of confidence that should you be dropped off in the middle of the desert with only a matchbox and a magnifying glass, you will survive.

Related: Learn to Adapt In The Face of Adversity

Faith. A level of faith and a belief system that there is always a way to overcome a problem. This is true no matter how overwhelming the problem may be. The more you overcome impossible problems, the less you’ll believe in the existence of impossible problems.

So instead of worrying about who has privilege, who doesn’t, or what privilege actually is, use the lessons gifted to you when overcoming insurmountable obstacles to propel your business forward.

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