How Many Single Points of Failure Does Your Business Have?

Years ago, when we were much smaller, I used to tell myself the goal I wanted to reach was having 10 bookkeepers. 

I figured that if I had that many, then if I suddenly lost one to an illness, competitor, or whatever else, then I could redistribute the work among the remaining nine and it would be easily managed. 

This was back when I had four or five and then the loss of even one created a real headache – it would mean pausing growth until we could hire another person and hoping I didn’t burn out the people who were left when I added 25% more work to their plates! 

Fortunately, we didn’t have this come up too many times, but I was very aware of where our weakness lay and was then and still am on the lookout for places where we have a single point of failure in our business. 

That is – any place where only one person or one system can do something critical that the whole business needs to operate. 

The best recipe for a good’s night sleep is knowing that if something quits, breaks, or otherwise fails, you’ve got a backup ready to step in and keep things going until you can recover the original condition. 

The worst night’s “sleep” is laying there thinking and hoping that the one thing you’re worrying about that would crash the business around you doesn’t fail. 

OK, so how do you make sure you get the best night’s sleep possible? Here are the steps for any size business.

The steps…

The first step in making sure you’ve got yourself as insulated as possible from a business disaster is just to make a list of the things that would be the most detrimental to your business.

For every business, it’s different, of course, but think about what parts of your business are essential to your whole operation and work backwards down to things that would be annoying but wouldn’t stop you from making sales and be able to pay the bills.

For example, suppose you own a small bakery. For you, this list may look like this:

  1. Oven breaks
  2. Head baker quits
  3. Refrigerator breaks
  4. Health inspection fail
  5. POS system goes down
  6. Etc.

Once you have your list- make sure you have a few solutions, as much as you can plan for it. For example, it could look like this:

  1. Oven breaks – have prescreened repair service phone number on hand, have hard-to-get parts spares available, know where you can use a commercial kitchen backup if needed
  2. Head baker quits – start cross-training another crew member on baking
  3. Refrigerator breaks – get the kind of alarm that can text your phone so you can rescue the food, have repair service on call, have backup storage option lined up
  4. Health inspection fail – know when it’s coming and make sure you’ve rechecked all the items they are going to look for and you won’t have any issues passing
  5.  POS system goes down – know how to set up a back up app on a laptop or phone so you can still take orders and payments

Hopefully, none of these things happen. But the time to try and figure out what to do is not when it’s happening.

Or worse, it happens when you’ve finally decided to take a vacation and you’ve left an employee in charge. If they don’t know what to do it could be a lot worse than if they have a plan to follow even if they can’t get in touch with you.

Obviously, not every emergency or surprise situation is going to have a neat or even workable solution. But thinking about it ahead of time can help you prioritize what to do if it does happen and plan for your next hires and growth.

In the bakery example, maybe instead of hiring someone just to work the counter, you hire a counter person who also has an interest in learning to bake so you can do some cross-training.

Here are some of the things to think about doing to help mitigate potential failure points:

  • Do cross-training and have written procedures so it’s not just one person who knows how to do something
  • Have service people already on a list with the info they’d need to know to get repairs started right away – internet, phone, IT, plumbing, electrical, roof leaks, landlord, etc. – whatever applies to your business
  • Think about the org chart growth and what positions you’ll need that are most critical to your growth 
  • Think about the steps involved from a customer coming in (or calling in or connecting online) through them leaving happy and satisfied – what does each step along the way require and what would happen if a person or a system wasn’t available? How could you work around that? 

Most entrepreneurs are optimists and that’s a good thing.

But spending a little time thinking about what could go wrong and how you can work to prevent it or avoid it or at least be ready for it now is going to make it a lot easier to deal with if it comes up and hopefully a lot less likely to come up at all! 

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