How to Create a Contingency Plan for your Small Business

Jinky Romero Ironwood Insights

No matter how well business is going right now, it’s crucial to be prepared for when things start going out of plan. If or when that happens, you’d want to be ready with remedies. This is why having a business contingency plan is important. The more thoroughly written it is, the more helpful it will be.

Here’s a guide on how to create a well thought out and effective contingency plan for your small business:

  1. Determine the main risks for your business

In order to create an effective and useful contingency plan, you must first identify the main risks that can affect your business the most and is most likely to happen. These include – depending on the location and nature of the business – natural disasters, burglaries, data theft, fraud, equipment failure, and loss of core staff.

This entails more than just sitting and writing down a list of things that could possibly go wrong for your business. In order for your contingency plan to be as effective as it can be, you must do your research – talk to your employees, look into your systems and equipment more thoroughly, etc.

  1. Identify the impacts they would have on your business

Be thoroughly specific in identifying what these risks may do to your business. Again, the more specific you are, the more reliable your contingency plan will be. Leave no stone unturned.

  1. List down steps to take for EACH risk

This is not the task to be lazy about. Go through each risk to your small business that you’ve listed down and under them, write contingency plans with steps and precautions to take. Don’t forget to include contact information that might be useful, timelines, and employee roles.

  1. Distribute plan to key people and back up data

As much as you would like to be physically present for when an emergency happens with your business, this will not always be the case. It’s important for other people in the business, co-owners or employees, to have a copy of this contingency plan as well in case something goes wrong and you’re not there. Make sure that a digital copy is not the only version of it, keeping a hard copy is useful in case the emergency comes in the form of data theft/data loss.

  1. Maintain the plan

It’s inevitable, changes will happen between the time you write this plan and when you actually have to execute it. Make sure that your contingency plan is updated with whatever changes your business will go through. This means that this plan should be reviewed at least monthly to ensure the accuracy of it in relation to where your business is at.