It’s rare for a business to fall short due to reckless decisions; it’s more common for something to have been overlooked or assumed to have already been done. Especially as businesses go through stages of growth, blind spots can easily form. These blind spots often develop into risks that go unnoticed during day-to-day operations. So let’s take a look at the most common blind spots that business owners should have on their radar.

Over-Reliance on Advisors & Experts

Lots of businesses use external consultants to support the running of their business, and they’re often heavily involved. But it’s important as a business owner to keep control over external parties. We often assume that professionals, like Accountants, can be left to their own devices, but even the most qualified can have gaps in their knowledge or make mistakes. When advisors or experts go unchallenged and errors have been made, they can escalate quickly and before you know it, you’re filing claims of professional negligence.

Informal Agreements & Handshake Decisions

It can be easy for business owners to fall into the trap of informal agreements, especially in the early stages of running a business, as they feel more flexible. At the time, a simple agreement via a loosely worded email seems harmless until a problem arises.

These problems can occur at any time; however, there are some occasions when it may be more common than others, for example, periods of intense financial pressure. Without a clear, written agreement, business owners can quickly find themselves exposed and vulnerable.

Weak Internal Processes & Documentation

When businesses are growing rapidly, they often continue to prioritise growth, and therefore usually focus on getting more customers or clients, while quietly pushing internal systems and processes to the back of their minds.

Losing control of internal processes such as record keeping and compliance processes can quickly create blind spots. These can easily be missed day-to-day but, when the business has an audit, for example, they can come to light and damage the business. In a worst-case scenario, documentation like this can be the strongest piece of evidence if the business faces a legal challenge. Clear processes and accurate documentation are vital to protecting your business.

Assuming “It Won’t Happen to Us”

Success can easily lead to complacency, as overconfident owners or leaders think that things can only go wrong for others and never to them. When things are going well, it’s only natural to assume that current systems are well-optimised and that disruption is unlikely.

This optimism bias can cause businesses to underestimate major risks, like data breaches, as they believe that sort of event couldn’t possibly happen to them. A good business should hope for the best, but prepare for the worst. They should have systems and procedures in place that can safeguard their success in the scenario of an unlikely but high-impact event.

Over-Reliance on Key Individuals

It’s surprisingly common for businesses to rely on one or two key individuals who hold crucial knowledge and/or decision-making power. These aren’t always the most obvious employees, like directors or senior managers; they can be long-standing, mid-level employees, whose roles have continued to evolve with the growth of the business without formal safeguards.

If these individuals were to leave, it could cause absolute mayhem. In my experience, I’ve seen people who represent a surprising bulk of a business’s organisational memory or operational productivity depart and be replaced by two or three other employees – an expensive solution, where matters can go from bad to worse with just one bad hire.

These members of the team are all too often overlooked because their workload or knowledge is so normalised that everything appears to be functioning well until it doesn’t.

As an owner, if you can identify blind spots early, it reduces the risk of numerous internal and external factors damaging your business. By keeping tabs on external parties, ensuring internal processes are tight, and avoiding optimism bias, your business can effectively prevent blind spots from being hidden and improve its financial resilience.

Written by Damien Woods