What Is a Contingency Plan?
A contingency plan is the physical manifestation of the words of Maya Angelou: “Hoping for the best, prepared for the worst, and unsurprised by anything in between.” It involves evaluating every scenario that could go wrong in your business and making a tactical plan to keep things operational.
How to Create a Contingency Plan
When creating your contingency plan, try to have the mind-set of a doomsday prepper. Theory crafting and analyzing can go a long way when you're trying to equip your company plan for any scenario. Here are a few tips to help you in making sure your contingency plan is ready for any situation:
1. Emphasize the Purpose of Your Plan
The purpose of a contingency plan can be summed up to three things: (1) damage mitigation, (2) incident prevention, and (3) return of operational control. If you want your plan to be successful, make sure that it can reduce any loss due to any particular event, and that operations are still doable and can be managed. That should be the goal of your plan, and setting it up will give you a guideline of how to transition from there.
2. Assess Vulnerabilities
Be it minor or major, list down everything that your company is vulnerable to (and there are usually a lot): from natural disasters like floods, earthquakes, storms, typhoons, to local incidents like fires, security breaches, robberies, and power outages, even to plausible, business-related scenarios like a budget failure, loss of data, or any sort of crisis (anything that can harm your business). List them down and have risk management based on how likely they are, how they can be avoided to lessen the likelihood of them occurring, and what to do if they do occur (more on that below). Evaluating what can harm your company gives you an edge as it allows you to both prevent and prepare for it as much as you can.
3. Have Specific Tactical Plans for Each Scenario
This section here is how you can tell a well-made contingency plan from a mediocre one, based on the tactical strategies employed to meet the purposes and goals of tip #1. Be it emergency exits in case of a natural disaster, a procedure that is observed by everyone during a security breach or robbery, or business contacts and sponsorship plans in case of a budget failure, the detail given to the tactical plans of any and every scenario define the success of a contingency plan. Do not sleep on this part because this could save lives and the company when done right (which it should be in the first place).
4. Make Sure Employees Are Aware of What to Do
Inform your employees of the system and make sure they understand the steps of your contingency plan. Assign personnel to certain tasks like first-aid, or data retrieval operations, or whatever damage-mitigation procedure you have and provide instruction or directional signs for natural disasters and, in case they need to be located in a hurry, where the emergency exits are.
5. Update the Plan Periodically
Of course, a plan is only effective if it can handle any and all situations, so update regularly if information for more effective tactical strategies come up or if certain strategies prove ineffective. Going back to the goals of a contingency plan, use them as your guideline.