When Disaster Strikes: 3 Steps to Recovery

We all hope it won’t happen, but in your business, disaster will hit eventually. The events of March 2020, Covid-19 and global lockdown are still vivid reminders of how vulnerable all businesses can be to the impact of events way outside its control.  Disaster closer to home can take many forms: one staff resignation, one client loss, one system failure, one data leak, one piece of bad news, and suddenly it feels like the ground has shifted under your feet.

The good news? Most disasters don’t mean the end. If handled right, they become turning points.

What “Disaster” Looks Like in Business

I have seen a really wide range of disasters in businesses I have worked in and advised on.  You may have also been on the end of one of the following:

• Losing your biggest client with a massive percentage of revenue gone overnight.
• One of your key staff members resigns highlighting dependency and where all the know-how sits.
• Cash flow pressures when a key customer collapses unable to pay your bills.
• External shocks from economic news, to lawsuits to pandemics.

Scary? Absolutely. Unrecoverable? Not if you take the right approach.

A Three-Step Approach

ONE: Dissect the Impact

You have to face the facts fast.  What’s been lost? Revenue, skills, or reputation?  Quantify the damage quickly, even rough numbers bring clarity.  You have to behave calmly and separate fact from fear, e.g. one client leaving doesn’t immediately equate to the rest following.

Example: Netflix. Blockbuster ignored streaming’s rise. Netflix didn’t. They dissected the impact early and pivoted, saving their future.

TWO: Plan for Recovery

Stabilise before you rebuild.  Secure short-term cash (renegotiate credit and supplier terms, tighten your own collections, speak to funders about contingency facilities).  Then aim to replace lost revenue fast by targeting easy wins e.g. upselling to existing clients, launch stopgap services.  Fill critical gaps temporarily with contractors or interim help.

Example: Johnson & Johnson (1982).  After the Tylenol crisis, J&J recalled products, acted transparently, and rebuilt trust with tamper-proof packaging. What looked like the end became a reputation-strengthening moment.

Build for the Long Term

Now you need to switch your mindset and spend the time to prevent repeat disasters.

• Diversify revenue and never let one client or product dominate.
• Strengthen systems and reduce single person dependency via documented processes and crosstraining  staff.
• Build reserves and cash buffers to save panic later.
• Run what if scenarios to expose weak spots.

Example: Apple (1997).  90 days from bankruptcy, Steve Jobs cut product lines, streamlined operations, and rebuilt Apple’s resilience. The foundations laid then fuelled Apple’s dominance today.

Final Thought

Disasters in life and business are uncomfortable, even frightening. But they don’t just strip things away, they strip things back.  If faced with a situation like this, focus your energy to:

• Face the facts honestly,
• Stabilise quickly, and
• Build resilience deliberately,

Then a crisis won’t define you, it will refine you.

PS: If you’d like help preparing your business for the unexpected,  whether that’s building cash resilience, diversifying clients, or stress-testing your systems, let’s have a conversation. The best time to prepare is before the storm hits.