Clearly, we are stating the obvious, but we’re in the last stretch of 2018. And smart business owners, are already reflecting over what went well, what didn’t go so well, and what literally flopped. At the very least, they will jot those reflections down and use them in their business plan for 2019.
But many business owners, no matter how smart, forget one of the most important aspects of their business plan for the coming year. And that is their business contingency plan. Consider these statistics:
- 30% of businesses are inadequately prepared or have no disaster recovery strategy in place.
- 90% of businesses without a disaster recovery plan will fail following a disaster, according to a study by accounting firm Touche Ross.
John Rampton, a contributor at Forbes magazine, put it this way:
In the unfortunate event, something happens to your company, it’s critical that you have a strong, effective, and organized business continuity plan in place to help you weather the storm and come out alive.
But Benjamin Franklin said it best:
By failing to prepare, you are preparing to fail.
Convinced yet? Here are some tips for developing a simple business contingency plan:
Identify and document all potential risks.
Whether a natural disaster strikes, your hard drive crashes, your delivery truck breaks down, or your babysitter moves out of town, it’s a risk. Start a simple spreadsheet and list everything that could go wrong that would impact your business.
Prioritize the risks.
Assign each risk a value from 1 to 5, 1 being the most critical, then sort your list according to that value.
Create a contingency plan.
Beside each risk, document your contingency plan. For the high priority risks, you will need to develop a detailed plan including a list of action steps in order of priority.
- Timelines – What will you need to do in the first hour after a data loss? What about the first day? The first week?
- Communications – Decide in advance who will be in charge of facilitating the plan and communicating with everyone else for each scenario.
- Staff needs – Talk to your lead employees and have them list exactly what they’ll need to continue operating if a given scenario occurs. Then make the arrangements to provide it.
- Contacts – Keep a hard copy for emergencies.
- Reduce the risk – Reduce the risk by making sure you have adequate insurance coverage, a current backup of your data, etc.
For the rest, keep it simple. If your babysitter moves away, you might simply write “Call Grandma,” and jot down her number. If your delivery truck breaks down, “Call a Rental Company,” and jot down their number.
Maintain the plan.
Keep your plan current and store a paper and digital copy, both onsite and off. Make sure your lead employees are informed and trained to help execute your plan.
Contingency Planning Resources
If you would like additional help in preparing your contingency plan, visit: