Last Thursday, I had my appendix removed. I had just finished eating an organic, vegetarian burrito when I started getting these sharp pains in the lower right side of my abdomen.
Initially, I thought it was gas pains from my lunch, but hours later, it was still there. I looked up my symptoms on the internet, and the results recounted story after story of people who experienced the same symptoms, and it was their appendix.
Reluctantly, I let my husband take me to the nearest hospital, and a few tests later, they were able to confirm it was indeed my appendix. The surgeon was wonderful, and my recovery was relatively quick and uneventful, but I did learn a few things about our business.
The biggest lesson was that we don’t truly have a solid contingency plan. Since we are a husband and wife team if something happens to either one of us or our children that will require our attention, who will take over operations so that our business can continue to function?
So it is in the aftermath of this experience that we realized we needed to put together a solid back-up plan so that we’d be prepared for those unexpected events that might impact our business.
Here are four steps you can use to build your own small business contingency plan.
1. Assess the Risks
To adequately plan for the unexpected, you have to take some time to look at where you are most vulnerable. This can break down into several subcategories, mainly:
Staff and Partners:
How will your business operate if specific people are unable to work? Do you have people cross-trained and able to step in if needed? What partner relationships are integral to your business, and what’s the back-up plan should something happen to them? Does one person hold all the intellectual property? How are you going to get that knowledge transferred to someone else should something unexpected happen to them?
If you rely on technology to run your business, what plans do you have in place to protect your data? Do you have a team you can turn to should your equipment stop working or your website goes down? What will you do if there is a natural disaster and you don’t have electricity or an internet connection? Do you have a plan in place to save and restore critical data? What course of action will you take if your system is breached?
Do you have inventory or assets you need to protect? What plans do you have should acts of nature, fire, or theft occur? Are your interests insured?
Legal and Crisis Management:
Do you have your bases covered legally? Are there protections in place that protect you from lawsuits? Are there federal or local laws that impact your business directly or indirectly of which you need to stay abreast? Do you have a solid communication plan or partners you can lean on should you face some sort of media crisis?
This list can go on and on. The point is to stop and think about the aspects of your business that MUST be running for your business to function and what your plan B will be should something unexpected occur.
2. Prioritize and Write the Plan
You’ve analyzed the risks; now, it is time to prioritize which scenarios would have the most impact on your business and write your contingency plan accordingly. Maybe there are some functions or people that are integral to your operation while other aspects could wait a bit or be less impactful to your customers. Your plan should clearly reflect these priorities.
Don’t forget to outline communication plans for your customers, partners that will be counted on to step in, and timelines your team will need to follow when implementing the contingency plan. You may have to map out different plans for each contingency, but by prioritizing, you’ll know which areas necessitate the most time and resources from you.
3. Get Your Team Ready
It is one thing to have a concept of what your contingency plans are, but another thing altogether to be equipped to execute those plans. The next important step is to get your team ready to implement the back-up plan. Assign and explain everyone’s roles and responsibilities. Walkthrough them the plan to be sure everyone is on the same page. Solicit their feedback as you do this because they may be more familiar with a given process or potential resources that could be tapped into. Cross-train your team if needed and conduct regular practice drills. If everyone is familiar with the plan, they will be ready to jump in and keep things moving should something occur.
4. Repeat the Process Annually
Businesses and their processes, staff, and even products can be quite fluid. That’s why it is important to review and update your contingency plan each year. Your current team could probably use a refresher, new people will need training, and it pays to think about the risks and how you prioritize those risks from year to year.
Hopefully, you will never have the need for a small business contingency plan. But, if something unexpected does occur, a plan will safeguard your livelihood and give you peace of mind as you weather the storm.
What would you add to this list? Share an unexpected circumstance you have faced and what you learned from it. If you already have a contingency plan, have you ever had to implement it, and what was your experience?