Are you worried that your business isn’t ready for the next disaster with so much going on these days? Were you surprised by recent events, and do you want to be more prepared next time?
Recent data shows that about 60 percent of business closures due to the pandemic are permanent. Some businesses were able to withstand the events better than others.
An essential part of business ownership is making plans for the unexpected. Here’s a brief guide to creating a business contingency plan that will help you deal with anything that occurs.
What Is A Business Contingency Plan?
A contingency plan for your business focuses on how you will respond to events that impact your business. It’s a proactive step toward preparing for threats or a potential future crisis.
It’s a smart management tool that gives your team direction and instructions to follow when things have gone off the rails.
Types Of Contingencies
Most businesses create several contingency plans that respond to different circumstances. It’s an exercise in imagining ‘what if scenarios, then drawing up plans to deal with the threat.
Creative brainstorming should include personnel from all levels of your organization, as each person has something to contribute.
Inclusion supports buy-in, which is a vital piece of the plan. Learn more about creative planning from The Lean Six Sigma Company.
Examples of circumstances that you might consider are:
- Your power goes down, creating a period of business downtime,
- there is a natural disaster,
- you lose a key client,
- someone hacks your IT system,
- you experience damage to your reputation.
Each one of these scenarios requires a different approach and response. Be open to creating a Plan B response as a backup.
Steps to Creating a Plan
Identify the most significant risks and decide how likely they are to occur.
Create a plan for each event that includes the following:
- What events will trigger the plan,
- who is responsible for each part of the plan,
- the immediate communications response,
- the immediate risk mitigation response
- the names and contact information of staff responsible for putting the plan in motion.
Management must review and approve each plan before finalizing them.
Communication is Key
Once you finalize your plans, you must communicate with your staff. Ensure that all responsible persons understand their role and have access to the plan.
Not all employees need a copy of the plan, but they should know that their employer is proactively working to support them in a risk event.
Review and update your business contingency plans frequently to consider any changes in your business environment that might affect the plan. As your staff identifies new risks, consider creating another contingency plan.
Be Prepared For The Unexpected
You can create a business contingency plan that covers your bases when you expect the unexpected. Even if things don’t play out the way you expect them to, at least you have a starting point, and your staff won’t have to figure things out in the middle of a crisis.
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