• Team Business-360°

Contingency plans are crucial for business continuity – here’s how to plan one.

Updated: Jun 16, 2021

COVID-19 opened our eyes to unforeseen risks a business is vulnerable to. A pandemic isn’t something one expects to happen in one’s lifetime, it did and even in the heart of capitalism, as Fortune US reported, it shuttered nearly a 100,000 businesses by Sept 2020. Natural calamity, labour trouble, cashflow crunch, accidents, data breaches are only some of the factors beyond your control which could lead to disruptions. Continuity is the lifeblood of any business but what happens when it is threatened by such forces. The usual reaction is to get into crisis management mode, however it is a post facto reaction, whereas contingency planning can help mitigate that crisis.

As a preventive control which could mitigate financial or reputation damage - contingency plans are a must for business owners. It’s the Plan B to minimize damage. It takes only a little effort to put in place but the payback is immense. Of course such plans don’t always have to be made for negative experiences, it could also be created for positive situations like sudden scaling of demand.

The very first step in making the plan is to know and prioritize your current resources. You should have a list of people, processes, functions that you cannot do without. You then need to map the possible risks such critical aspects of your business could face. Map as many scenarios as you can so that the contingency plan can be a comprehensive go-to guide. Each scenario will need a plan B attached to it with an eye to mitigating damage. The final step is effectively communicating the plan to your employees.

In the current scenario companies who have moved to a WFH model for the foreseeable future, are an example of work force contingency planning. A service business which does not allow one client monopoly is an example of contingency in case of key client failure. A manufacturing unit which can ramp up capacity overnight is an example of demand contingency planning. God forbid that such plans are needed but in case God allows it, you should be able to pull them out and ensure that the show goes on, as it must.

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