Explore useful strategies to help protect your business from unexpected disruptions like cyberattacks, natural disasters, or losing a key client or executive. 

Protecting Your Business from Unexpected Disruptions

Unexpected disruptions can pose serious risks to even the most well-established businesses. Whether it's a cyberattack, a supply chain failure, or a leadership health issue, having a proactive strategy can help manage the potential impact. Beyond the operational risks, these events can also have a direct impact on your personal financial security, long-term goals, and peace of mind. Here are a few core steps business owners can take to build more resilience:

• Identify and assess the most relevant risks to your business
• Create contingency plans for key operations and personnel
• Diversify revenue streams and supplier relationships
• Maintain emergency liquidity and financial flexibility
• Work with advisors to align legal, financial, and risk management strategies

Potential Disruptions That Could Impact Your Business

The first step in making your business more resilient is identifying which disruptions are most likely to affect your operations. Here are some common challenges:

• Cyberattacks and data breaches that compromise sensitive information
• Supply chain disruptions due to logistics failures, vendor issues, or geopolitical instability
• Regulatory or tax changes that affect how your business operates or is taxed
• Natural disasters like fires, floods, or severe storms that halt operations
• Loss of a major client representing a large portion of revenue
• Owner or executive incapacitation due to health issues or personal emergencies
• Economic downturns that lead to declining demand or tighter credit
• Litigation or legal disputes that consume time, capital, and focus
• Internal issues, such as employee misconduct or fraud

7 Ways to Build Resilience into Your Business

Proactive planning can help you weather uncertainty with less stress and more stability. Below are seven strategies that can help strengthen your business while protecting your personal financial well-being.  

1. Strengthen Cybersecurity Systems

Helps address: Cyberattacks, internal data breaches, fraud

Implementing strong cybersecurity practices is essential for safeguarding sensitive data and preserving business continuity. This includes investing in up-to-date security software, regularly auditing systems for vulnerabilities, and providing ongoing training to employees on phishing scams, password protocols, and data handling. Multi-factor authentication and access controls can add additional layers of protection. For some businesses, cyber liability insurance may be worth exploring.

2. Diversify Supply Chains and Vendor Relationships

Helps address: Supply chain disruptions, geopolitical risks, vendor failure

Disruptions to supply chains, be it from a global pandemic, government tariffs, or reliance on a single supplier or geographic region can leave your business exposed if that source is disrupted. Consider establishing relationships with multiple vendors across different locations to reduce dependency. It’s also important to regularly review contract terms to allow for flexibility in the event of delays, pricing changes, or availability issues. Vetting supplier reliability and financial health can also support longer-term planning.

3. Monitor Regulatory and Tax Developments

Helps address: Regulatory changes, shifts in tax policy, compliance risks

Laws and regulations affecting your industry may evolve quickly. By working closely with legal, tax, and financial professionals, business owners can stay ahead of potential changes and evaluate how shifts in policy might affect operations or cash flow.

Structuring your business to allow for flexibility and reevaluating compliance procedures regularly can help reduce the impact of regulatory disruption.

4. Avoid Revenue Concentration in One or Two Clients

Helps address: Loss of a major client, sudden drop in revenue

When a significant portion of revenue is tied to just one or two clients, your business may be more vulnerable to sudden financial strain. Evaluating your current revenue mix and identifying areas to diversify—whether through expanding your client base, developing new offerings, or entering new markets—can help reduce exposure.

Building broader, more balanced revenue streams is a strategic way to address concentration risk over time.

5. Create a Succession and Contingency Plan

Helps address: Owner illness, leadership transition, temporary absences

Unexpected leadership gaps can create operational challenges, especially in closely held or owner-led businesses. A documented succession plan that outlines who can step in during a temporary or permanent absence, along with clearly delegated responsibilities and access protocols, can help keep the business running smoothly.

Consider incorporating key person insurance, buy-sell agreements, and updated corporate governance documents as part of a broader business planning strategy.

6. Prepare for Physical and Natural Disasters

Helps address: Natural disasters, office shutdowns, infrastructure damage

Storms, wildfires, and other natural events can bring operations to a halt with little warning. Creating a formal emergency response plan, identifying alternate work locations, and backing up key systems and data off-site are important steps.

Business interruption insurance may offer financial support in some scenarios, and reviewing your policies regularly can help clarify what coverage may be available in the event of a disruption.

7. Maintain Financial Reserves and Access to Capital

Helps address: Economic downturns, client loss, unexpected expenses

A healthy liquidity position can provide flexibility when business slows or unexpected costs arise. Building financial reserves and establishing access to credit can help smooth cash flow during challenging periods. It's also valuable to regularly review your capital structure with a financial advisor to assess how your current position aligns with future needs or potential disruptions.

Common Disruption Types and Potential Impact Areas 

How an Advisory Team Can Help Support Your Disruption Planning

Disruptions don’t just affect your business; they affect your life. Building a more resilient business often requires input from professionals across legal, insurance, tax, and financial domains.

Working with a financial planner can be particularly helpful when integrating personal and business finances, stress-testing your cash flow, or preparing for succession events. This guidance can be especially valuable for business owners navigating growth, transition, or generational planning.

EP Wealth offers dedicated business planning services that align financial strategies with your long-term objectives. Whether you're preparing for leadership transitions or evaluating risk exposure, the specialized support can help you move forward with greater clarity.

Contact an advisor to learn more.

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