Why Your Business Needs a Contingency Plan

The old saying ‘if you fail to plan, you plan to fail’ feels doubly relevant when it comes to planning for the future of your business.

Nobody wants to focus on all the things that could go wrong, but unexpected issues are a reality of life – and they’re why you need a contingency plan.

Making sure you have steps and timelines in place can be the difference between one disaster sinking your entire business or being a mere bump in your road to success.

 

What is a business contingency plan?

Contingency plans are used all the time, and are an essential part of your business toolkit. Knowing you have prepared alternatives in case of emergency is worth every bit of time and effort, and helps future-proof your business.

Be realistic

Sitting down and ruminating on all the things that could be disastrous to your business sounds rough, but it’s a vital list. Going in with the knowledge that a) nothing is risk-free and b) your goal is to find preventative measures and solutions to these issues will help you work smarter, and feel more secure in your business.

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Identify your key threats

Think of everything that has the potential to stop your business in its tracks, from staffing to supply, right down to natural disasters. Identify every gap in skills and knowledge if one of your team is unable to come to work, or if you yourself need to remove yourself from day-to-day operations temporarily.

You’re likely to wind up with a long list, but that’s the goal!
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man-writing-in-notebook_925xRank your risks

Get your list and tick off any quick fixes – some scenarios are likely to be covered by your insurances or could be prevented by investigating what insurance and legal protections you already have and what changes you could make to improve them.

With the remainder of the list, order them from most to least critical.

If a potential issue could shut down your entire business, it needs to be your priority over other issues that might simply cause inconvenience.

 

Plan

Once your list is ordered, it’s time to start your problem-solving. If you find it useful, sit down with your team or a peer and brainstorm ways to negate or minimise your threats, and see if you can find solutions that will work for more than one issue.

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Modify & Update

Your contingency plan will become a fluid document, and lend itself to any new procedures or staffing techniques.

You should revisit it semi-regularly to identify new risks or re-evaluate potential issues and solutions, and investigate new solutions that may have developed as you gain more knowledge and experience.

Knowing you have your own contingency plan in place lets you focus on growing your business.

Hub Australia

With spaces in AdelaideSydneyMelbourne and Brisbane, and membership offering access to our national network, Hub Australia brings premium coworking to Australia’s growing businesses, offering tailored workspaces, a curated community and member services.