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Thresholds Of Endurance

The Clifton Review  


The Clifton Review is a tri-weekly column that examines the question of the Clifton project along with the evolution of the war between two billionaires. We covered the start of this war with articles describing the battle over easement rights, the mysterious burning of a home, the blocks to rebuilding, and countless questionable court filings.

While the 2018 series salutes fashion mogul Peter Nygård’s Golden Jubilee detailing his rags to riches story, his incredible business success over these past fifty years and an inside look at how he did it, The Clifton Review will also continue to address current affairs as they relate to the good of The Bahamas.  


Thresholds Of Endurance

By P.J. Malone 

You’ve increased awareness of the potential risks to your business viability, but you now have to consider when a risk becomes a dire threat to your distinct business. It is an essential part of assessing risks that each business person must perform.

No matter what type of business you are in and what level of risk you may or may not face, you will need to prepare by determining business risk measures and your thresholds of endurance.

In other words, before you can decide what strategies to employ to mitigate the threats to your business, you have to determine what risk looks like for your business specifically. For example, how much loss in revenue constitutes a threat to the viability of your business?

If you had a great year of profits, though not desirable, maybe your business could withstand a little loss in profits. However, in other cases, a loss in sales revenue could destroy your business. So, identify the ‘key risk indicators’—those things that spell a definite threat to your business survivability:

To illustrate, for fashion mogul Peter Nygard, there were several key risk indicators, or factors that suggested danger was aheadin the late 80s and early 90s when he was faced with the market change that was moving away from polyester products.

1. His core product was polyester. Any move away from polyester would be a threat to his business focus.
2. The department store customers had several suppliers. If Nygard didn’t give them what they wanted, the department stores could look elsewhere to get it, which would mean a loss in business for Nygard’s company.
3. Nygard also faced the challenge of his department store customers possibly being offended by his not giving in to their new desires, which may have resulted in them wanting to end their business relationships with him.

4. If Nygard switched his product from polyester to the new trend, he would lose the customers he had who wanted his polyester products.

5. Nygard was ‘king of polyester’. If he moved away from polyester, he had no guarantees that his new products would be just as popular with a new market.

These were the risks exposure he faced and had to consider when strategizing to mitigate the risks to his business. You too can identify what factors may present a threat to your business and decide the level of loss you can take in each area before dire consequences ensue.

So, ask yourself, what’s an acceptable level of risk? Consider how much financial loss your business can withstand before it is in trouble.

If a threat is in the form of a loss of access to resources, like losing your supplier for example, or an increase in the cost of resources, decide what this threat looks like—what levels of resources need to be kept at all times; or what timeline for getting resources would be threatened, etc.?  

Are there key individuals in your business that if they were no longer working there would threaten your business viability? An example of this would be if you only had one person with the specific skill to operate a machine in your business—losing this person could represent a threat to your business depending on the extent to which the machine is needed for business operations and if there are any alternative ways to work without it.

So, as much as possible study your business and look at what changes could derail your business and what specific levels have to be maintained to avoid disaster.

Once you have risk measures in place, then you would need to have strategies that can be implemented before the situation gets to any dangerous levels for your business.

Written by Jones Bahamas

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