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Mayday! Mayday! How to Calmly Manage a Business Crisis

Published on Mar 13, 2013


Read 'Mayday! Mayday! How to Calmly Manage a Business Crisis' at 'Time to Start Up,' the small business blog by BizFilings.
By Adam Toren Company formation comes with risk, and a public relations crisis can hit any business, large or small, established or start up. A crisis is, by nature, unpredictable and realizing that everything is not in your control can be a harsh lesson. But you can’t ignore a crisis or become too defensive about it. You’ve got to confront it. If you’re prepared and react calmly, you can minimize the negative impact of the crisis.


How do you prepare for something when you don’t know when it will occur or in what form it will appear? Well, consider countries that prepare for all sorts of scenarios that may or may not happen. They have a team of qualified individuals that discuss possibilities, analyze potential actions and reactions, and come up with a variety of plans that have been scrutinized and even rehearsed. Create your own crisis team that includes a lawyer and a public relations expert. Explore crises that are common to your industry and formulate strategies that you can follow in the event a crisis occurs. Make sure your crisis team is capable of rapid communication, and that everyone is on the same page and delivers a consistent message.

No Comment

It may be your natural reaction to try to ignore the crisis and refuse to comment to an inquiring reporter or customer – but resist this temptation. You’ve got to face the crisis and own up to it immediately, or it could expand exponentially. American culture is pretty forgiving, but it does expect honesty and an explanation of what went wrong and how. Give the press, employees, shareholders and your customers the whole story, and do so quickly. Don’t speculate and certainly don’t attack. And whatever you do, don’t make any inaccurate statements or attempt to conceal something that will be revealed anyway. Your response will have long-lasting ramifications and you want customers to regard your business as professional, measured and responsible. Collaborate with your crisis team on all of your public statements and make yourself accessible to reporters. The sooner you tell the story, the sooner you can work on fixing things and getting back to business.

Take the Hit

It may take a while for things to return to normal. The media will continue to probe and speculate, and customers may demand refunds or harbor feelings of ill-will. The key is to remain patient. Let the emotional cycle run its course. Continue your honest communication with the media and find an appropriate way to compensate your customers and make it clear that you’ve made any necessary changes. Go the extra mile and offer discounts to try and maintain customer loyalty. If you handle the crisis calmly and correctly, the public will get over it, and your actions may make you more appealing to customers. Learn from any mistakes and come out of the crisis as a stronger business than before. You can also run a marketing campaign that illustrates the new face of your business. Show the public that you’re more than capable of adjusting to all kinds of circumstances. Adam Toren is an Award Winning Author, Serial Entrepreneur and Investor. He Co-Founded YoungEntrepreneur.com along with his brother Matthew. Adam is co-author of the newly released book: Small Business, Big Vision: “Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right” and also co-author of Kidpreneurs.