***How Avian Flu Could Threaten Your Business***
Is avian flu a threat to your business?
Today we went for our annual flu jabs and while not normally
bothered about such things I did feel it was a bit more
necessary this year.
The avian flu threat is apparently causing governments so much
concern that I am a little suspicious that they know something
they are not telling us.
Perhaps that's just my suspicious mind but I am starting fear
that we may get an avian flu pandemic.
The world bank has pitched in saying that costs have so far been
limited but it warns in it's report that a pandemic in 2006
would create a 2% loss in global GDP in one quarter. This is
$200billion so the governments are right to be concerned about
avian flu.
$200billion is huge but the threat even reaches into small
businesses that can be vulnerable.
We live in a rural area and I have been fascinated to watch one
local farmer diversify his business by setting up a farm shop.
His main business has been raising lambs that he sold for
slaughter and at Christmas time he supplies the locality with
turkeys.
Starting the farm shop gave him a retail outlet for his own
produce and an ability to retail additional related foods such
as beef, pork, cheeses and vegetables. All has been going well
until talk of avian flu spread.
This week my wife went to order our Christmas turkey and learned
that the farmer has one customer who has cancelled an order for
90 birds and he fears it could finish him. I would be very sad
if this were to happen particularly after he has taken action to
try to strengthen his business.
Even so it throws up three interesting business issues'
* Was he too busy working 'in his business' rather than 'on it'?
Small businesses often suffer from the owner not looking at
strategy.
* When he took action was it too late because of lack of
strategy?
* Again was he so close to the business that he did not realise
that he was too dependent on a small number of larger customers?
Thinking about this reminded me of a business I visited as a
consultant. They produced plastic mouldings and they were
incredibly proud of their yield rates and quality performance,
both of which were at the level of excellent when measured
against customer requirements.
What's more they were incredibly proud that their customer was
IBM. It left me thinking, all well and good but what sort of
business is it that is so locked into one customer who can
dictate all terms? Even prices.
IBM's strategy was clear. Outsource and place the risk
elsewhere. Most of the large corporates operate in this way but
it is not sound business for the sub-contractor.
The lesson: Make sure that you have strategic goals for yourself
and your business and work at them. Are you too reliant on just
one customer? I'm sad my farmer friend may have realised too
late and may rue the day he heard of avian flu.
Tip If we don't know to which port we are steering, no wind is
favourable.
A further thought; we need a strategy for safety, we can't
control external factors like avian flu....
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