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 thats 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 its 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.

Whats 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.

IBMs 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? Im sad my farmer friend may have realised too late and may rue the day he heard of avian flu.

Tip If we dont know to which port we are steering, no wind is favourable.

A further thought; we need a strategy for safety, we cant control external factors like avian flu.