Businesses of all sizes are susceptible to unforeseen events and situations which can affect their financial health, professional image and day-to-day operations – from natural disasters to data theft. Because of this, implementing an effective continuity plan is crucial in securing assets, managing crises and making sure the business can continue moving forward.
Here, we offer practical guidance on how small and growing businesses can create and implement an effective contingency plan, helping them protect their physical and professional assets.
Immediate crises and operational hiccups can distract from major events, with the potential to shut down your business for hours, days or, in worst cases, indefinitely. Taking the time to map out a contingency plan will pay dividends should such disasters occur, so here are a few pointers to get you started.
The first step in creating a bespoke contingency plan is to identify the potential risks to your business. Depending on the size of your company and its sector, there are many things which could affect day-to-day operations, including:
Think carefully about the risks to your business and identify key areas which are most vulnerable or likely to cause problems. This will help focus your contingency measures, ensuring you don’t waste money, time and resources future-proofing any unnecessary aspects of the organisation.
An effective contingency plan should address the three key stages of business continuation, including immediate measures, interim procedures and the steps needed to rebuild what’s been lost to get it back up to full strength. Organising this plan into stages will help you manage the crisis and ensure that key contingency measures are delegated to the right people.
Here are a few examples of the kind of measures needed for each stage of contingency.
These are just a few basic examples of the types of measures you may need to implement to sustain your business during a crisis. Of course, how your business responds will depend on the incident, the sector and how badly your assets have been affected.
It’s essential that your business knows how to react to a crisis and adapt to mitigate loss of assets. Here, we list the key areas you should consider when drawing up contingency measures – from data theft to an evacuation plan.
Evacuation plan – Ensuring that all personnel can evacuate the premises in an emergency is one of the first things you should draw up in your contingency plan. While most businesses with staff should have an evacuation procedure anyway, it’s important that this is published as part of a contingency plan, so that all members of staff are aware of it.
Data protection – Data is an invaluable asset for many businesses, so you have to take steps to protect it. Ask yourself: could the business continue as normal if data was lost, and what impact would this have? A robust data protection plan is needed to keep information secure, so make sure you back up all relevant company data and have recovery provisions in place.
Communication procedure – Different staff, personnel and stakeholders may be affected by an incident, as well as customers, suppliers and partners. List all the people who will need to be contacted in an emergency, as well as the contact details for essential services such as plumbers, electricians or your internet provider. It’s also a good idea to keep the details of your insurance policy handy, so that you can make arrangements following an incident.
Theft and security – Make sure your contingency plan includes measures for protecting and maintaining intellectual property and company assets, including data, machinery and sensitive customer information. Back up all valuable assets and consider keeping contingency copies off the premises, so that business can continue in the event of a cyber-attack or physical theft. You should also consider a legal strategy to cover the business should sensitive data be stolen or leaked.
Mismanagement and fraud procedures – One of the most difficult negative contingencies to manage is fraud and mismanagement committed by personnel. Often, such crises can have a negative impact on a business’ public image, and can lead to ill-feeling among other members of staff. To combat these problems, draw up a series of checks and procedures, as well as an action plan, that will help prevent mismanagement issues, and liaise closely with your staff to solve potential issues before they can have a negative impact.
Look closely at your insurance policy – Ensuring that your business has adequate insurance cover is crucial in mitigating the risk of financial loss in an emergency, and this is particularly true for growing businesses with an expanding workforce. As well as general protection against theft, fire and natural disasters such as flooding, you should make sure your policy includes loss of intellectual property due to a cyber-attack, and financial provision covering the loss of key stakeholders.
Tip – some insurance providers may offer reduced premiums if you can prove you have drawn up a comprehensive contingency plan.
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While the deck may seem stacked, building a contingency plan for a small business is actually relatively straightforward since there are fewer employees and elements to consider. The size of such businesses allows them to make responsive, swift changes to market shifts, though their lack of assets to rely on does set them at a disadvantage. If this is the case, the contingency plan should rely on protecting these assets as well as anything that’s required for driving income.
When you’re deep in the crunch of a contingency situation, timing can be difficult. A rough timeline can help with the progress of your results, while giving yourself deadlines towards the steps of your contingency will also prove beneficial. What’s most important is keeping the company solvent; the business is now in survival mode, and every penny goes towards its recovery.
Creating a time-frame to get you back to your pre-contingency conditions is key. Identify how much inventory needs to be sold in that timeframe. If you’ve sold certain assets, know how much it will help and for how long. In bad situations like this, buying the business a year of recovery time is helpful, and will usually give you enough time to get back on your feet.
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The views, opinions and positions expressed within this article are those of our third-party content providers alone and do not represent those of Gazprom Energy. The accuracy, completeness and validity of any statements made within this article are not guaranteed. Gazprom Energy accepts no liability for any errors, omissions or representations.
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