What is a business contingency plan
Today’s topic is related to the protection of our business “Business Contingency Plan”. The term “contingency” means any kind of happening or changes in changes. There are many types of business planning that we do before starting a business, for the essential growth of business. Same as a business contingency plan helps you in an upcoming situation. Such disasters occur in life and they directly affect our financial life. To avoid all this, we have to make a plan for business contingencies so that we do not let those situations affect our life at all.
In simple words, we can describe this, “Don’t think about that thing happening suddenly and directly affect financial health”. It’s not that contingency will be negative only, it can be either positive or negative but most of the chances of negative events occur that affect our financial growth, reputation, goodwill, strength, ability of business.
Business contingency plan is an essential part of business fitness because if we keep a plan in advance, then we will be able to grow the strength and efficiency of business. With a business contingency plan,we are fully prepared to handle the upcoming situation and at that time we do not fall into the financial weakness. It should be in the business priority list because it helps us to make business strategies for future events, achieving desired goals in that situation without facing any obstacles.
You know what, most of the big organizations and governments also make contingency plans for future prospects because they know that they may have to face any situation at any time whether it is positive or negative. Maybe that’s why they achieve success with the biggest setback in business.
Creating a business contingency plan is also a very big minded job in itself. No single person of organization ever makes a business contingency plan, but the entire management is formed with their own strategies, thoughts, ideas, creativity. In a business contingency plan, management has to solve some complex situation such as a puzzle to make a successful plan. It requires a lot of advanced research to make a suitable business contingency plan.
Examples of positive and negative event
- Positive event: Sudden unexpected profit in business.
- Negative event: Earthquake, floods, fire, etc.
Suppose an employee of our organization goes abroad for a business meeting and if a plane crashes and an employee dies so for this situation, the organization needs to make a business contingency plan.
If a worker of an organization works on a machine and gets injured. So for this, the organization needs to make a contingency plan.
Process for creating business contingency plan
Identify business risk
First, we need to identify our business risk, that is how much risk in our business in each and every department. Its possible when we measure risk with each department managers and what risk will put a negative impact on our business and how it will improve such as:
- Human resource department
- Sales department
- Production department
- Purchase department
Priorities list of risk
We need to make a priority list of risk consult by managers of each department of an organization. They will tell which field will have more negative impact, then it will be placed on the first priority list of risk.
Consult with experts to solve risk with effective plans
We need to consult with employees, managers, executives, teams, subject experts, and even outside advisors who are known for financial advisors. These such advisors will help us to create innovative ideas, think advanced, build understanding and thoughts.
Create seperate plan for each event
After identifying the risk, we need to create a successful contingency plan which directly has a positive effect on business. The one who has the highest risk should be taken on the first priority. We need to follow some procedure such as:
- Clarify all responsibility of employees
- Clear communication with others
- Give always the latest update to the employees, clients and everyone who is part of the organization.
- Take instant action against mistakes
- Make our business insurance by best insurance companies
- Focus on employees activity
Share plans with responsibility
After making contingency plans, we need to share our plans with managers in each department and give them responsibility and make sure you have to handle this.
Keep maintains each plan
We all know that regular changes keep coming in every department and we have to run business with the same changes. It’s not that once we have made a plan, after that the same plan will be a lifetime, rather the plans are always changed with new technologies, strategies.