Seven Steps for Small Businesses Responding to Crisis

By David Collins

Sometimes, no matter how a small business strives to prevent a crisis, it still occurs. The Covid-19 pandemic has taught us that an overwhelming calamity can crop up at any time. If you don’t handle these problems properly, your company might become insolvent.

Small scale businesses often spring up without thoroughly considering risk factors because they feel that they can regain their capital and make profit quickly. They may even fail to develop fundamental business techniques that determine their survival until a crisis threatens the company’s existence.

External and internal factors could be the cause of the crisis. Worldwide pandemic, economic downturn, global problems, wrong business decisions, and production mistakes can lead to disaster. Many believe that the best way to navigate a crisis is to study the history of companies that experienced similar situations and employ fundamental business techniques. 

However, there are practical steps that small businesses can take to scale through a crisis. Let’s discuss seven:

  • Stay calm and evaluate the situation.
  • Carry your team and community along.
  • Draft a plan specific to the crisis at hand.
  • Understand your cash runway.
  • Review your credit.
  • Review your expenses.
  • Keep working on solving the problem.
#1 Stay Calm and Evaluate the Situation

Amid catastrophes, there’s a tendency to become confused. Feelings of inadequacy, doubts, and fears might come to your mind. Any negative and unproductive emotion can thwart the next step you’ll take. Instead, it’s your responsibility as the CEO of a small business to stay calm.

Objectively evaluate the situation to find out the root cause of your problem. Think about the events that occurred before the crisis.

  • Did an internal or external decision cause the crisis?
  • What and who was the exact cause?
  • What effect has it had on your company?
  • How can you mitigate the problem?
#2 Carry Your Team and Community Along

No matter how small a business is, it has a community that comprises customers, employees, partners, and other stakeholders. It’s best to inform your team how the crisis is affecting the company. At this point, secrets are highly invalid to your community because they’re victims directly or indirectly.

Ensure you sensitize your customers about the problem if it affects them. You can give a public press release and explain that you’re actively trying to solve the crisis or reach out to your buyers one-on-one.

Carrying your community along will help reduce customer backlash and prevent public relations disaster.

#3 Draft a Plan Specific to the Crisis at Hand

Now that you’ve spoken to your community, it’s time to brainstorm and create a plan to solve the crisis.

Assemble a team of financial, legal, public relations, online help, and other key stakeholders to help mitigate or solve the problem. It’s advisable to use methods that will increase revenue, like renewable energy financing. Besides, several online websites create plans and draft solutions to problems. Examples are accounting management software, essay writers, expense trackers, and business apps.

Next, brainstorm steps to take to solve the crisis. Create a bullet list of how to work on each part of the problem. Some team members might bring up dissenting opinions that will poke holes in your ideas. But they’ll help you create an all-inclusive plan and ensure that you don’t envision action steps that could cause problems later on.

Also, ensure that your crisis management plan aligns with the company’s vision and ideologies. If not, it could hamper production and exacerbate the problem in the future.

#4 Understand Your Cash Runaway

If your revenue has reduced drastically due to the pandemic, an economic problem, or a natural disaster, calculate your cash runaway.

What is a cash runaway? Cash runaway measures how long your company can remain in operation before the money it has runs out.

To calculate your cash runaway, check your bank account balance. Then look through outstanding checks and payments and subtract them from your bank balance. It’s easier to create a concrete plan when you know your cash runaway. You’ll be able to determine if it’s time to concentrate on aggressive marketing, get a loan, or improve customer satisfaction.

#5 Review Your Credit

How much credit do you have available? Have you maxed out on credit from your lenders? Business credits are vital. So, endeavor to go through your term loan payments, credit card bills, and any other credit you’ve got.

Create a short-term plan to solve your credit problems. You might want to search for other sources of capital or use cash to free up some credits. Besides, creating a short-term and long-term plan for your loan will help you handle it properly during the crisis.

#6 Review Your Expenses

Every business has running costs. Not only do you need petty cash to run day-to-day expenses, but you’ll also need to pay for larger projects. Numerous expenses like payroll, vendors, professional services, rent, and inventory will crop up. List all your expenditure and review them.

You may also look through private expenses. Do you attribute personal expenditure to the company? Or do you separate personal from business payments? Your company should pay for business costs only.

Once you’ve determined your company’s monthly spending, categorize each expense into essential or non-essential expenditure. Then reduce non-essential spending. You may have to ask stakeholders to help you with the reduction. Are there payments you can delay? You could even consider energy savings driven cost reductions. Another option is to review contracts and obligations.

Reviewing your expenses will help your business stay afloat for a more extended period.

#7 Keep Trying to Solve the Crisis

Your crisis management plan doesn’t fit all situations. You might encounter unforeseen circumstances when using it. If you made your plans flexible, it would be easier to adjust. Flexibility and improvisation help your business handle problems comprehensively.

Besides, the problems caused by the crisis might not go away immediately. Don’t give up. Like aiming for the best essay writing websites, keep trying to improve your business, and make more sales amid the crisis. Try new methods of creating solutions and winning customers.

As you create innovative business techniques, your company might thrive despite the crisis.


Businesses encounter problems and might even be involved in a crisis. In such cases, you’d need to improve your skills and knowledge while also actively working on mitigating and solving your company’s problem.

Work with your team to solve problems that arise. Creatively use innovative techniques and invent unique solutions that could yield more sales and increase customer satisfaction. Moreover, remember that a crisis is a marathon and not a sprint. Consider solving problems one at a time. Also, strengthen your company and team by working together to grow your business despite the crisis.


David Collins is a professional writer and blogger from Virginia. He’s involved in a college paper writing service that actively helps people who say, “Write my research paper.