A business contingency plan is a comprehensive set of backup procedures to follow in case your company experiences a crisis such as an office fire, public criticism over the actions of one of your employees, or theft of key equipment.
In effect, it’s a “Plan B” for your company to follow when emergencies threaten the stability and productivity of your business. If you don’t have a business contingency plan yet, consider this simple fact – most business affected by a major disaster don’t survive long without one.
Why Does Your Business Need a Contingency Plan?
Having a business contingency plan not only minimizes confusion and boosts confidence in your company when disaster strikes – it also ensures that your company can get back to work as quickly as possible.
Whether you’re in the first year of running a startup, or have operated a company for several years, one thing you should never go without is a business contingency plan. That’s because it only takes one unforeseen emergency to put your company’s survival in jeopardy.
Here are several major business risks that make contingency planning necessary:
- Physical Contingencies: Dealing with physical emergencies such as fire, theft, and civil emergencies (strikes/riots/etc.) can literally destroy your business.
- Windfall Contingencies: Dealing with a huge product/service order or agreeing to complete a big project can put your business at risk if you don’t have the capacity to manage the workload.
- Market Contingencies: Dealing with changes in customer buying habits, technology, government regulations, and even culture directly affects the productivity and survivability of your business.
- Succession Contingencies: Dealing with the loss of key employees (retirement/resignation/death) can lead to a leadership/innovation gap that can bring your company down. However, this can apply to any key member of staff, not just management.
However, these aren’t the only contingencies your business will need to plan for. Depending on the size and nature of your company, your business contingency plan can range from a few pages to hundreds of pages.