Financial Data
Updated 24 Sep 2020

How to prepare for business volatility

In light of recent market shocks companies must prepare their business model for survival and smoothly take advantage of the upturn as conditions improve.

Lizwe Nkala, Entrepreneur, 24 June 2016  Share  0 comments  Print

All the answers to your unique business lifestage questions

Wild swings in global economic and political prospects, such as the recent Brexit vote and fluctuations in exchange rates, can wrong-foot even the most established large organisation. Businesses bear the brunt of secondary shocks as contracts are deferred or orders are rescinded. How do you cope?

Related: How to keep your business afloat despite the current economic landscape

Know where you play

Getting to grips with your industry success drivers even in times of certainty prepares you for calamity.

Your business may be exposed to currency exchange rates, imports/exports, energy input costs in manufacturing, global demand patterns or sharp consumer swings in luxury or FMCG. Master the trajectory of the relevant drivers at all times.

Know the epicentre

Determine the concentration of pain in the value chain and its migration direction. Proactively plot your business’s incidence to the peeks and valleys as it migrates through the value chain.

Determine your exposure and manage the cost and revenue risks. A deteriorating exchange rate will hit your import business in early phase volatility, while a deteriorating energy cost will feed cost pressure in second or third phase profit volatility. 

Related:  Develop your business model

Entrepreneur Mag Logo

Copyright is owned by Entrepreneur Media SA and/or Entrepreneur Media Inc.
All rights reserved. Click here to read our editorial disclaimer.

Rate It12345rating

About the author

Lizwe Nkala, Entrepreneur

Introducing the cash solutions for a growing business

Are your cash solutions supporting your growing business? Leigh Livanos, Head of Payments, Collections & Cash for Business & Commercial Banking explains how your cash solutions needs will evolve as your business expands.

Login to comment