All businesses go through good times and bad; there are those periods where sales are up, customers are happy, and you need more staff, space, and capacity to keep up with demand. Then there are those times when it all goes wrong and you are hit by a disaster, or maybe just a setback, or a challenge out of the blue. In both cases your company suffers stress and that stress is transferred to you personally, big time.

You can of course ignore what might happen in the future and deal with challenges, good and bad, as and when they arise, or you can prepare in advance for these inevitable situations and practice risk management.

There are pros and cons to both approaches; hey why worry about something that might never happen? On the other hand, challenges, both positive and negative can cost you money if you don’t manage them appropriately. For instance, a new customer contacts you and wants to order a large quantity of whatever it is you sell. Can you cope with such a big order? Do you have the capacity? Do you have enough raw materials? Can your team cope with an order of that magnitude? Customers placing big orders demand better discounts, do you have sufficient profit margin in your product to meet their demands?

Then there’s the bad stuff that can happen to any business. A key staff member leaves unexpectedly, a new competitor appears in your market and begins to poach your customers, or you lose your biggest customer, an unsatisfied customer starts trash-talking you online, you experience cashflow issues, your primary supplier lets you down or goes out of business, your premises floods. You can probably think of a bunch more scenarios over which you could lose sleep.

Preparing for the “what ifs” in your business can cut the stress you will inevitably feel when something untoward occurs. Make a list of all the things that are likely, or even might possibly happen in your business and come up with a strategy to deal with each situation. Considering the ones outlined in this article is a good start. For example, how would you deal with losing a key employee? Perhaps you could actively keep an eye out for ideal employees during your regular networking, or when you are impressed with someone’s service in a store? Start collecting resumes of people you meet, or those who inquire about career opportunities with your firm. Then, if an employee gives notice you will already have people to interview for their position.

Taking a little time to consider what you will do in a wide range of difficult circumstances will allow you to be prepared for when they happen and minimize the downtime, or damage they inflict on your business.

Formalize your “what if” plans into a risk management strategy. Don’t be put off by the academic sounding name, it can be as simple as a three-ring-binder outlining your plan of action for each eventuality you list. Gather your team, or friends and family, advisors and mentors together and brainstorm anything and everything that could derail your company, or take it off track and think well in advance, “What will I do if …”