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.


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.


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?


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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

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