Business Crises That Require an Immediate Response

December 20, 2021

If you are a business owner, then you have likely had to deal with a business crisis at some point in your career. But for new business owners and operators, when a business crisis comes up for the first time, you might be treading water trying to figure out what to do, and how to handle things so that your business survives even the most egregious of crises. To help you understand what qualifies as a business crisis, what the most common types are, and how to respond, here are 8 business crises you may be faced with that require an immediate response.

Loss of Employee Confidence

This is a crisis despite the fact it may seem like a small issue, but employee confidence in your company is essential to increase productivity, boost morale, and improve your goods and services. Luckily, recognizing and addressing employee confidence in your business is something that can be handled quickly and swiftly, which is good for a crisis like loss of employee confidence that is best dealt with immediately. Having a team meeting to demonstrate strong leadership skills, address employee concerns, and discuss the long-term vision and future for your business. If that can’t convince them, nothing will.

Bankruptcy

You need to address business bankruptcy as soon as it is put on the table. The great news is that bankruptcy is not a nail in the coffin for your business, but rather an opportunity for reorganization, the offloading of some debt and other financial obligations, and a chance to start again – if you know how to handle bankruptcy the right way. Do your research and find out what bankruptcy option will be best for your business. Chapter 7 can be the best option to completely erase debt for sole proprietors but could be a very costly option to partnerships and corporations. Chapter 11 and 13 can offer reprieve for businesses still operating but can be devastating for businesses with expensive equipment that can’t be paid for through these plans. Do your research before filing bankruptcy.

Negative Reviews

Negative reviews from disgruntled customers are an issue that you can’t ignore, no matter how much you want to. As a business owner who likely gets a lot of business from positive reviews, you need to tackle these negative comments right away to reassure customers that you rectify when something is wrong. For instance, if a product malfunctioned and that led to a negative review for your business, offering a refund or a replacement in response and assuring that you put the utmost into your products can be good for your image. Think about customer service and respond post haste.

Data Breaches

There are few scandals that can be as crushing to a business as a data breach. The only thing worse than a data breach is a poorly handled data breach. You may feel that your business is too small to be targeted by cybercriminals, but you’re not as safe as you think. More than 80% of IT breaches happen at small to medium-sized businesses. If your business is the target of a data breach, you need to reach out to all customers, affected and non-affected alike. Apologize for the hack, reassure them that you are doing everything possible to secure their information, and promise to do better in the future.

Personnel Crisis

A personnel crisis is any situation that involves an employee committing any sort of act of disrepute. This can involve crimes, harassment, discrimination, and participating in morally questionable activity. As the business owner, you need to be the face of the company to reassure your customers and the public at large that this employee does not represent the company and you will do everything you can to assist in bringing the perpetrator to justice. Try to separate your company from the personnel and acts in question. This can help resolve some public outrage.

Downsizing

If your company is approaching a downsizing, you need to be communicative, early, before rumors take root and make everything much harder. The first step is to address your employees privately, and make sure that you are the first one to deliver the news. Then you need to address the public and explain the reasons you are downsizing and empathize with the employees being laid off. Treat your employees kindly currently. The most important thing to do is reassure everyone that it will help your business survive and that there is a plan to grow the business further with the help of these cuts.

Organizational Crisis

An organizational crisis occurs when your business does something that harms your customers or employees. For example, if your business intentionally lied to your customers about the safety or efficacy of your product, or you sabotaged employee’s unionization attempts. When an organizational crisis rears its ugly head, you need to address your customers immediately with an apology for taking advantage of your customers. Reassuring everyone that the business has everyone’s best interests at heart, and a promise to continue to improve and grow better into the future.

Confrontation Crisis

A confrontation crisis takes place when an individual or group is at odds with a company. This can involve things like boycotts, strikes, and protests. As a business owner, the best way to resolve these kinds of problems is to address them directly. Rather than trying to fight the strikers or protestors and prove that you were in the right, simply find the least costly way to give the other group what they want. Compromising early allows you to get back to business and find a solution that doesn’t need to give in completely to the other side.

Managing a business crisis is more of an artform than a science. It requires nuance, long-term planning, and great leadership to see your business through a crisis. Make sure that you study and understand all eight of these different business crises, and the importance of understanding how to respond to them swiftly can keep your business in good shape through any emergency.

Read this next: What Happens When You’re Consistent in Your Business?

Categories

More Posts:

Nyago Michael Emmanuel

We invite many people who can invest in our Akiba Ya umoja community benefit savings and investment group of Uganda to enable us expand our operations in Uganda

How to Demonstrate Your Leadership Skills in the Workplace

Are you looking to become a leader in your field? If so, you need to know how to demonstrate your leadership skills in the workplace. Many people think that leaders are born, not made.  This is simply not true. Anyone can learn the skills necessary to be an effective...

17 Best Leadership Books Every Leader Must Read

 Even the most talented managers can learn something new. Self-improvement is a journey of discovery that can help you manage your teams more effectively. Reading is a highly valuable learning process any leader can do. Through reading, you’ll learn: how to understand...

How to Create More Motivated Employees at Your Company

Motivated employees will be more productive in the workplace. They will also be more likely to stick around longer, which is beneficial for your company. To create more motivated employees at your company you can provide a healthy work environment, reward employees,...

How Business Leaders Can Better Connect With Their Employees

For many entrepreneurs, it often feels that they aren’t really making meaningful connections with their employees while they run things behind the scenes. Good leaders know that forging a bond with those you work with is a key to success, but it can be hard to find...

How to Decrease the Burden of Healthcare Expenses on Your Employees

Healthcare expenses can be a burden to your employees. Luckily, there are things you can do as an employer to help decrease this burden. Here are a few ways to help your employees with their healthcare expenses and support them the way they support your business! Pick...

How to Make Key Employee Benefits More Affordable

In the current job market, it can be difficult for employers to be competitive for the top applicants. Offering great benefits is one thing you can do to increase your chances of making a positive impression on the applicants you are most impressed with and decrease...

How to Make Employees Feel More Comfortable in the Workplace

Employees feeling comfortable in the workplace is important. When they feel comfortable, they will feel more satisfied with their work and will have better work performance. To help your employees feel more comfortable you can encourage employees to speak up,...

7 Tips to Balance the Demands of Modern Business Leadership

Have your team members become stagnant or disengaged in their work lately? Are you hearing lots of sighs and grunts from the office every time you pass by? Well, now might be the time to reassess and reform your leadership strategy.   We know how challenging it...

Tips and strategies to wake the leader inside of you

Time changes fast and with every passing second the dynamics of the corporate world too. Even though we’ve left those times of gender stereotypes behind us where a woman’s role was limited to home and not in the office or they weren’t confident or heard enough to...
Nyago Michael Emmanuel

Nyago Michael Emmanuel

We invite many people who can invest in our Akiba Ya umoja community benefit savings and investment group of Uganda to enable us expand our operations in Uganda

How to Create More Motivated Employees at Your Company

How to Create More Motivated Employees at Your Company

Motivated employees will be more productive in the workplace. They will also be more likely to stick around longer, which is beneficial for your company. To create more motivated employees at your company you can provide a healthy work environment, reward employees,...

How to Make Key Employee Benefits More Affordable

How to Make Key Employee Benefits More Affordable

In the current job market, it can be difficult for employers to be competitive for the top applicants. Offering great benefits is one thing you can do to increase your chances of making a positive impression on the applicants you are most impressed with and decrease...

All Categories

Business Operations

Entrepreneur Interviews

Marketing, Networking, & Social Media

Self Care & Personal Development

Working Moms

Business Software and Technology

Entrepreneurship & Small Business

Organizing Tips

Sales

Career Building

Family Businesses

Inspiration

Starting Your Own Business

Work-Life Balance

Communication

Hiring Help

Management & Leadership

Time Management & Priorities

Women in Leadership

Recent Posts

How to Avoid Tax Trouble at Your Business

How to Avoid Tax Trouble at Your Business

As a business owner, you know how important it is to stay on top of your finances and taxes. But if you don’t have the knowledge or resources to do it yourself, getting help can be the best way to make sure everything is handled properly.  Here’s an overview of some...

What to Do When Your Vehicle Lease Comes to an End

What to Do When Your Vehicle Lease Comes to an End

As your vehicle lease reaches the end of its term, you are presented with three options: return the car to the dealership, sell the lease or buy it outright. Each choice obviously has benefits and drawbacks that must be weighed before making a decision. In this...

The Power of Women-Owned Small Businesses

The Power of Women-Owned Small Businesses

     Women-owned small businesses are on the rise, and their impact is undeniable. In fact, in 2019 alone, women-owned nearly 12 million businesses that employed nearly 9 million people and generated over $1.9 trillion in revenue. From retail to technology to finance,...

Nyago Michael Emmanuel

Nyago Michael Emmanuel

We invite many people who can invest in our Akiba Ya umoja community benefit savings and investment group of Uganda to enable us expand our operations in Uganda

Soe Tun: The Copy Doctor

Soe Tun: The Copy Doctor

Autistic kid finds out that he’s unemployable and doesn’t enjoy most social settings. Decides to be a pro copywriter as a result.

Annie Anderson – Business Strategist & WordPress Creator

Annie Anderson – Business Strategist & WordPress Creator

Annie Anderson is the owner and digital creator at Midnight Rebel Digital Co. With over 25 years experience in design and development and more than 15 years experience with WordPress, Annie is a great person to have in your corner when it comes to websites, tech, and systems.