Why Contingency Plans are Important for Small Businesses
Whether you run your small business alone and work out of your basement, or have several employees based at multiple office locations, it’s always important to have contingency plans in place.
Preparing in advance and knowing how you intend to react in the face of a disaster or health emergency provides more than just valuable peace of mind. It could be the path to keeping your business afloat in stormy conditions. Although you never want to have to use your contingency plans, you’ll be thankful for having them in case they are ever needed.
Determine the biggest risks
The first step to proper contingency planning is recognizing your main risk factors. Are you vulnerable to data theft? Is flooding a fear in your area? How would you handle long term disruptions in telephone or internet service? What if one of your main suppliers couldn’t come through as scheduled? Sit down with senior employees and work together to determine the biggest dangers your business faces.
Make sure you have insurance
Once you know your main risk factors, protect yourself as much as possible by purchasing insurance. The protection offered by the right policy could be vital for getting your business back on track in the wake of a disaster, so take the time to understand precisely what you’re insured for, and what kind of coverage you’re getting.
Know what you need to get back on your feet
Imagine that your business has been destroyed by fire or is otherwise irreparably damaged. What are the essentials you’d need to get up and running again? Could you manage with a few new computers and a couple of key staff? Maybe there’s a piece of specialized equipment or a particular person that you just can’t do without. Make a list of the must-haves you’d need if forced to start from scratch, and come up with a plan on how to acquire those items if the worst should ever happen.
Have a plan to handle strikes and work stoppages
A work stoppage elsewhere could mean big problems for your business. For example, it’s worth having a plan in case of a shutdown in postal service, which could halt deliveries to customers and prevent you from receiving some payments. Besides keeping extra cash on hand to get your business through such periods, it’s wise to investigate alternative options for shipping via courier and being able to receive payments electronically. All these things will help you guard against the negative effects of a prolonged strike.
Develop a communications strategy
Part of your contingency planning should include a strategy for communicating the severity of the situation to your employees, and to your customers. Distribute printed copies of employee contact information to senior managers so your staff can be reached in an emergency and given guidance on how to act.
If you’re forced to adjust your hours or shut your business down entirely in the wake of an accident or disaster, use your website and your social media accounts to communicate the situation to customers. Reach out personally to key clients to explain the situation. Tell people when you hope to re-open your doors, and offer them alternative solutions in the interim.
Produce a written plan, and assign roles and responsibilities
Working in tandem with senior staff, produce a clear, detailed plan of the different steps to be taken in the event of a disaster or emergency. Don’t store the file on a computer where it could be lost or deleted – make printed copies and keep them in binders in safe locations around the office.
Make sure your employees know what’s expected of them if the plan ever has to be put into effect and hold occasional drills, if necessary. Provide proper training to all current staff and make sure any new hires are brought up to speed on their responsibilities.
Once or twice a year, update the response plan to account for any changes in your situation, factoring in such things as updated risks or new personnel. If carrying out the plan requires any special equipment, make sure it is properly serviced and maintained; you won’t want it to fail at the critical moment.