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Apr 16, 2024
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Boost Your Business with No-Credit-Check Financing
In the dynamic landscape of business expansion and seizing novel opportunities,...
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Keep Your Business Safe with a Business Contingency Plan
The best way for your business to survive a disaster is to be prepared. Just like the expression says, you should always “expect the unexpected” (hello COVID-19 pandemic and soaring gas prices!). While your company might not be able to imagine every possible scenario that could adversely affect your operations, creating a roadmap for how your business could respond to an unforeseen event will greatly help you mitigate risk.
What is a Business Contingency Plan?
A business contingency plan is essentially a blueprint to help your business be better equipped to handle a “what if” scenario like a natural disaster, cyberattack, or unexpected event. It helps you identify potential risks and outlines a course of action to take to reduce the impact of a disaster. If something goes wrong, having a business contingency plan in place will help you:
- Bounce back quicker
- Minimize the downtime and disruption to your company
- Save money
- Preserve your company’s reputation and prevent bad press
How Do I Make a Business Contingency Plan?
Creating a detailed business contingency plan requires a bit of time and research. Here’s how to get started:
1. Brainstorm and identify potential risks to your business
Before you can begin to plan for risks, you have to identify them. Ask yourself what could happen that could impact your business. Potential risks can be anything from a major hurricane causing irreparable damage to your retail store, to your website getting hacked, to all of your employees calling in sick on the same day. Be sure to involve your whole team in the brainstorming process because they may be able to identify risks that are related to each of their specific roles.
2. Create a list of these risks and rank them according to severity and probability of occurrence
Consider the likelihood of all of the risks you identified in step 1, as well as how severely each one would affect your business. For example, if you live in a geographical area where a hurricane is highly unlikely to occur, that would be ranked lower on your list. As far as the severity of different risks goes, it may differ greatly from business to business. A power outage that could be extremely costly to one company, may not be that serious of a problem for another.
3. Conduct an impact analysis
When contemplating the gravity of each risk, analyze each one and determine what the impact would be. Think about how much money it could potentially cost your business in downtime, negative press, lost sales, etc.
4. Develop a risk response roadmap
The roadmap should detail a step-by-step response your company can follow in order to get back to business. A few of the most important questions to consider when developing your roadmap are:
- What will our immediate response be?
- How will we communicate with employees?
- How will we inform our customers?
- Which business areas are the most vital to get up and running again?
- How can we minimize downtime and get these areas back up and running as quickly as possible?
- Which team member will be responsible for handling each of the tasks identified?
- If an insurance claim has to be filed, how will that be handled?
- How can we keep our reputation intact?
- How will we handle payroll?
5. Commit to testing and revisiting your contingency plan
Let’s face it, even the best-laid plans can go awry. Be sure to test out your contingency plan from time to time to ensure communication methods are working. Revisiting your plan often also guarantees that your risks and responses are current.
Why Should My Business Have a Business Contingency Plan?
Creating a business contingency plan is something that is often overlooked and seen as a low priority. But without a strategy in place for how to respond to an emergency or unforeseen event, it will be much harder to get your business back on track. Be proactive today so that you’re prepared tomorrow!
Having Capital on Hand Can Help Minimize the Impact of a Disaster
When unexpected costs or emergencies arise, a business line of credit ensures that your business always has capital on hand. You can quickly draw on your line of credit to fix broken equipment or cover a lull in sales during times of disaster. For more information on how we can help you secure funding for your business call us at (844) 284–2725.
