When businesses are presently at their peak, it’s easy to forget about potential setbacks. But neglecting them could be very dangerous to every business, especially when the worst-case scenarios happen. Unforeseeable negative events can happen anytime, and when any of these occur, only those businesses with contingency plans can successfully bail themselves out of the situation. Others without a plan may save their business but may not anymore function like before.
Remember, If You Fail to Plan, You Plan to Fail
It’s always true that when you fail to plan, you plan to fail, especially for businesses. Anything from financial setbacks to data breaches can cause huge disasters to the company, which is why you’ll need a sophisticated contingency plan that suits your business.
Take note that the contingency plans differ from one company to another. For example, a business with a brick-and-mortar location in a hurricane-prone area should avail of flood insurance and damage recovery. It’s all the more critical for small businesses to have backups in case of emergencies. When growth can be at stake anytime, having a good failure plan will really come in handy.
Various Business Contingencies and Plans
Be wary about what could happen; otherwise, you could be a victim of loss in just a glimpse of an eye. You should hire business consultants to come up with potential negative scenarios and solutions. Here are some of the most common contingencies among businesses and sophisticated plans that can prove to be handy should such an emergency happens:
Data Breach or Loss
There’s no reason to be complacent about your company’s data, especially when you’re yet a small business. Nowadays, hackers are getting more sophisticated day by day and are picking on smaller businesses. This is because big companies tend to prioritize data security, keep up with the potentially expensive cybersecurity services from IT companies, and be ever more aware that a breach can easily cause every business’ downfall.
The upfront cost of cybersecurity services may be expensive, but it can really help modern companies feel secure. Aside from it being regulatory compliance for businesses, it assures continuity. While there is no cookie-cutter formula for cybersecurity, it at least guarantees companies to get back to their feet immediately after a potential breach.
Aside from cybersecurity, going paperless is essential for any company too. Data loss from paper-based documents can be as dangerous as a data breach. So many things can happen—misplacement, damage, or a swipe of natural disasters. Going digital and having a cloud backup can immensely help your business get to its feet right after a shortfall.
Power Loss
In a hospital, a power shortage can mean life and death; a food company’s entire stock could be put away in the lost production time. For other sectors, a power outage can immensely affect productivity. This is why backup generators are very crucial.
The best solution for power loss is nothing but a well-working generator. Businesses should keep it well-maintained, specifically running the generator for every few months (preferably monthly), cleaning the air filters every week, and changing the oil with a new one after each use.
Financial Shortfalls
Every business is at risk for financial setbacks, so it’s very important to have an emergency cash repertoire all the time. Financial contingency planning can greatly help in most emergencies but will require your company to set aside a bigger amount.
You can start with securing a saving with a realistic target amount that you can set aside each month. Cutting down costs can be a great way to increase profits, which you can make as your extra cash reserve. For instance, if maintaining your own fleet for freight transportation gets very costly, you can hire one of the flatbed transport companies to do the job. With experts handling the delivery process, you can significantly cut costs and reduce any potential damages.
To stay ahead financially, keep your reserve amount for up to six months, plan for the worst, and insure your business for any major risks.
Be Prepared in Every Contingency
Just like one saying that never gets old—plan for the worst but hope for the best. Other contingencies include theft, economic recession, terrorist attack, natural catastrophes, and more. Even the most unexpected pandemic gave a huge blow to many industries. Hiring a risk advisor may be a wise choice since there is not one contingency plan to fit all kinds of businesses.
