Contingency planning is a must for small businesses, which can face even more potential emergencies than larger businesses.
Any unexpected situation that interrupts a company’s normal operations can be harmful to its financial health and professional image — if not dealt with properly. The harsh reality is, most small business are unprepared.
Small business owners can carry out contingency planning by following 6 easy steps:
1. Identify the key risks for your small business
Is the issue data theft? Flooding? Are several of your staff potential maternity or paternity leave candidates?
Identifying the most likely setbacks that will impact your business, will help you focus your contingency plan and not waste time and money preparing for events that are highly unlikely.
There’s no point in planning how to recover from a hurricane, for instance, if your business is not located in an area that is hurricane prone.
2. Determine operation essentials
Entrepreneurs should decide what’s absolutely necessary for their small business to start operating again if a disaster or illness forces the business to close.
Steps should then be taken to ensure that these essential resources are quickly available if needed.
3. Establish employee roles
Identifying employee roles and responsibilities is key in the case of an unexpected event.
A good way to go about this is to create a step-by-step list of actions to take post-event. This will help staff to pick up and continue working in your absence.
4. Cover your business with the correct level of insurance
Fire insurance is an example of one possible disaster your small business could experience. Along with other obvious disasters such as wind damage and flooding, entrepreneurs must also consider the damage that could result from theft.
If your business offers professional services or advice, you’ll also want to consider a professional liability insurance policy.
Having the proper type of insurance to cover your risks will go a long way towards getting your small business up and running again if disaster strikes.
5. Cover your business with adequate insurance.
Successful data backup and protection is crucial for protecting your business’s continuity.
Today, all, if not most businesses are built around some form of valuable data. Losing this data can cause major problems for small businesses, which is why it’s important for business leaders to ensure that data is backed up properly.
Creating a small business disaster plan is important in order to prepare for potential cyber security threats, storms and office closures.
6. Evaluate your contingency plan
Twice a year, business leaders should review and revise their contingency plan. This should address things such as staff changes, economic factors and other relevant issues to your business.
It’s easy to put off business contingency planning. There are always current emergencies that require your immediate attention.
However, one needs to consider how significant these emergencies are compared to an event that could shut your business down for weeks.
Taking the time to prepare your business contingency plan will pay off immensely if disaster or illness ever strikes.