Insights & Info

Insights > How to Prepare Your Company for Major Business Disruptions

How to Prepare Your Company for Major Business Disruptions

By Generational Equity

Business Continuity - Generational Equity

The best way to build your company’s preparation for any disaster requires an ongoing focus on identifying, planning and reporting risks, say experts from the National Center for the Middle Market. Whether that threat is flooding, fire, market disruptions or a cyber threat, preparing your response ahead of time may make the difference in your company’s worth, profitability and survival.

While it’s tempting to think your company will be able to wing it should a disruption strike, it always pays to be prepared. After all, smaller businesses with fewer investors face a much larger financial risk than a large public company whose exposure is spread across hundreds or thousands of shareholders.

There is No One-Size-Fits-All Approach

As every business is unique, potential risks can be distinct too. That’s why your company leadership shouldn’t use an industry template when conducting enterprise risk management plans. Those templates may be useful as a starting point for discussion, but your company’s risk will vary by region, size, key talent, financial structure and more.

To begin, your company must identify potential risks before developing plans to mitigate the dangers and build financial resilience. The three general types of risk for any business are:

  • Strategic – Big picture, long-term changes such as market trends, industry consolidation or shifting regulations and economics. This is the most prevalent, most damaging type of risk and the hardest to recover from.
  • Operational – Shorter term events such as natural disasters, strikes or port closures. This type of risk, if properly planned for, generally is the quickest from which to recover.
  • Digital – Ever-present risks such as equipment downtime or failure, compatibility issues, hacks or data breaches. This type of risk is often underreported and can cause significant damage.

Using weather as an example, solar flares are a possible but unlikely threat for most businesses. But, if your main warehouse is located in a 100-year flood plain and your region has been experiencing more severe weather patterns, some prior planning could make all the difference in your company’s recovery after a storm.

Your review of potential risks should immediately follow your annual strategic planning for the business, recommend experts with the National Center for the Middle Market (NCMM). This allows your leadership team to more easily identify those risks likely to have a tangible impact on business goals.

Once you’ve identified and analyzed the most likely threats to your company’s financial health, it’s time to create a plan for recovery. This requires that you:

  • Know the value of your company
  • Know the cost of capital
  • Insure the insurable
  • Maintain access to liquidity
  • Identify and retain key talent
  • Diversify suppliers and clients
  • Know the available exits

Complacency is the biggest danger to your company’s health, says Manuel M. Perdomo, Head of International Risk at SunTrust Banks, Inc., because resiliency planning isn’t a one-and-done thing.

Take hurricane planning for businesses along the Gulf Coast and southern Atlantic Seaboard, as an example. Most companies have some sort of hurricane plan, but is it tested every year before the storm season begins on June 1?

To properly plan for hurricane season, says Perdomo, a business should review and update its communication plans and phone lists, inspect their facilities to look for potential vulnerabilities, back up data, and arrange for capital liquidity and cash on hand that may be needed for a few days to a month if a storm hits.

How Companies Build Cyber Resiliency

Information technology represents a significant financial vulnerability for most companies, says Joseph Muniz, security architect at Cisco, and is vastly underreported. One of the main reasons behind the underreporting is that it takes businesses an average of 200 days to discover a system breach. On top of this, most companies have trouble tracking and documenting the entire breach once it is discovered.

The top dangers within a company’s digital footprint are generally related to having too many devices or too many different types of devices to manage securely; too much data; and trying to keep all IT tasks in-house rather than outsourcing expertise appropriately.

It’s a difficult time to manage cyber security, explains Muniz, when a Ring Doorbell can provide entry in to your entire system.

Muniz recommends companies build in multiple layers of security; simplify and consolidate systems and devices; automate as much security as possible; and train their employees to recognize phishing attacks and other potential vulnerabilities. He also recommends amplifying the strengths of your in-house IT department by outsourcing specialty IT jobs, such as forensics.

And realize this: More and more business buyers are including disaster planning and recovery in their due diligence checklists when they make acquisitions. They want to ensure that any business they acquire has plans in place to continue operations following any natural disaster or cyber-attack. So, creating and maintaining your business disaster recovery plans is vital. 

To learn more, download the full report on risk and resilience from the National Center for the Middle Market.

You can also get tips for business disaster planning on the Generational Equity website.

Interested in learning more about how our dealmakers can help you and your firm build financial resilience prior to a sale or merger? Give us a call at 972-232-1121 or fill out our contact form, and we will be in touch.

By Jessica Johns Pool.


© 2021 Generational Equity, LLC. All Rights Reserved.

Make an informed decision

The best decisions in life are informed decisions. We release educational business insights like this every week. Subscribe to make sure you don’t miss the latest news, views and analysis.


Success, you have been added to our list.

We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.
Larry Moore, Owner, A Company Portable Restrooms
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Bruce and I wanted to take this opportunity to thank Generational Equity for assigning Musa Jagne to our transaction. In Bruce’s words, “Musa did one hell of a job for us!”
Karen S. Williams, CFO, BW Manufacturing
We will highly recommend Generational Equity and Musa Jagne to any business owner about to embark on the same process.
Karen S. Williams, CFO, BW Manufacturing
Dear Chris and Andre, I just wanted to say thanks for all your help. Even though this process was not an easy one, it was comforting to know that I had a capable team standing beside me. You made me feel like we were almost your only client or at least the most important one. Thanks again, and I will recommend your service in the future.
Shenille Engelhart, Owner – CLS Technology
We thank you Eric and Generational Equity making our dream come true.
Larry Moore, Owner, A Company Portable Restrooms
Thanks again Phil and feel free to have a future client call me if they would like a referral. You are a true professional!
Andy Graham, Vice President, Modern Heating & Plumbing
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.
Robert Evans, President and CEO of Mealtracker Dietary Software
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.
Ralph Noblin, President of Noblin & Associates
I need to say an immense thank you to Don Ho for his stellar work ethic, attention to detail, and tireless effort. Also thank you to the whole crew at GE! Without you, Don could not do such a phenomenal job. We were shooting for closing and funding before the end of 2020, due to the uncertainty of the political landscape and taxes. I am happy to report we closed last week and will be funding tomorrow.
Dr. Caty J. Catron PhD, RN, VA-BC – Owner, Vic The Picc, LLC
Generational Equity’s assistance was invaluable in compiling and marketing our business.
Bil MacLeslie, CEO, ipHouse
We are extremely pleased with the way Generational Equity handled the sale of our company. Your associates, Tom and Chris, did an outstanding job of getting us (me) through the process.
Michael J Polarek, President, Paragon Packaging
I am pleased that I was able to work with Andrew Byrd throughout this experience. From the first meeting we had in Minneapolis I felt that I was in good hands. His knowledge and expertise is second to none. He guided the process consistently throughout. I feel lucky that I was pared with Andrew and could not be happier that I chose Generational Equity to handle this major life event. Thank you Andrew and GenEq for everything!
Eric Erlandson, Owner, Action Fastenings, Inc.
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Terry D. Wickman, President, Keytroller
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.
Robert Evans, President and CEO of Mealtracker Dietary Software
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).
Bil MacLeslie, CEO, ipHouse
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.
Terry D. Wickman, President, Keytroller
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.
Pete L.
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.
Andy Graham, Vice President, Modern Heating & Plumbing
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.
Bil MacLeslie, CEO, ipHouse
T.D., thank you so much! You are a great leader! I love how you are using your gifts and talents to better others. You are clearly a GREAT COACH! This 3 day session undoubtedly changed the future of our business, and very well may have been the sole catalyst to save my company, my health and my marriage! A genuine “thank you” from the bottom of my heart.
Bryan D. Horn, Owner, Over Under Clothing
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.
Jay Dinnison, Owner of Sharpe Mixers
Tom Staszak is one of the most professional people I have dealt with in my last forty years of business. You’ve got a great group of people and you have built a truly professional organization.
Michael J Polarek, President, Paragon Packaging
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.
Jay Dinnison, Owner of Sharpe Mixers