The recent news of Silicon Valley Bank’s (SVB) collapse has left many of its customers, and companies like them, worried about the future. Companies that were heavily reliant on SVB’s financial support will likely struggle to find alternative sources of funding, which could lead to a slowdown in their growth, or even bankruptcy.
Silicon Valley Bank was a Powerhouse (was)
A go-to partner for startups, venture capitalists, and innovators, SVB was known for its expertise in the technology and innovation sectors and its ability to provide customized financial solutions. The bank offered a range of products and services, including lending, investment management, treasury management, foreign exchange, and payments processing.
Much has already been written about the bank’s collapse and what led to it, so let’s talk about how you can fortify your own company so you can bounce back should you find yourself in a similar situation.
How to Ensure Your Company is Resilient in the Face of a Funding Crisis
1. Diversify Your Funding Sources and Relationships
Spread your funding across multiple sources, reducing your reliance on any one provider. By the same token, it’s important to build relationships with multiple financial institutions to reduce business risk.
2. Have a Contingency Plan
Develop a contingency plan addressing what steps you will take if your primary financial institution collapses. How will you identify alternative funding sources and providers? How will you minimize disruption to your operations? How will you inform employees about payroll interruptions or layoffs?
3. Invest in the Right Enterprise Software
Having the right technology in place can help your company quickly adapt to changing circumstances and ensure your operations continue to run smoothly.
The 2023 Top 10 ERP Systems Report
This report is relevant to organizations across industries and outlines the best ERP vendors that we believe will help organizations prosper in 2023.
For example, financial management software (ideally something integrated with a full ERP system), can give you real-time visibility into your financial performance.
Other types of enterprise software you may want to implement include:
- Customer Relationship Management (CRM) software: In the wake of a financial institution collapse, you must maintain strong customer relationships. CRM software can help you track customer interactions, manage customer data, and provide personalized service.
- Supply Chain Management (SCM) software: If you have a robust SCM system in place, you’ll be able to minimize the effects of any operational disruption. This software can help you manage inventory, track shipments, and ensure you’re able to continue to receive supplies and raw materials.
- Cybersecurity and Data Protection: With more and more financial operations moving online, it’s essential to have strong cybersecurity measures in place to protect your sensitive data and transactions. Invest in tools like firewalls, antivirus software, and encryption technology, and make sure your employees are trained on best practices for data security.
- Collaboration and Communication Tools: When faced with a crisis, your team must be able to effectively communicate, even if they’re not physically in the same location. Consider investing in tools like video conferencing, project management software, and team messaging platforms.
Uncertainty is the Worst
We feel your pain. Not knowing if or when you might lose your funding source(s) is like swinging a club on a pitch-black golf course.
While it’s impossible to predict the future, you can take steps to reduce business risk. One of the most important steps is regularly reviewing and updating your technology stack to keep pace with new developments and changing business needs.
Our ERP consultants can conduct a Technology Assessment and help you navigate the ERP software market. Contact us below for a free consultation.