What is business contingency planning and why is it so important?

No one can predict the future, as much as we might want to! When things are running smoothly, it’s easy to forget what impact unforeseen events can have on your business. So, when a disaster strikes out of the blue, you may find yourself in a difficult situation. Perhaps it’s a global pandemic or a new product you were launching falls flat - whatever it is, these unexpected circumstances have the power to upturn your business’s day to day running and functioning incorrectly. 

That’s where business contingency planning comes into play. Acting as the ‘superhero’ of your business, this plan can swoop in to save the day. Planning is, of course, crucial to every aspect of running a creative agency, but this contingency plan is particularly vital to prevent risks that could impact its survival. So, in this article, I’ll be detailing what this plan should consist of and why exactly it is so important. 

What is contingency planning? 

A contingency is anything that occurs outside the range of normal operations that may impact the business’s ability to operate. Put simply, business contingency planning is about being prepared for unusual events - it’s the blueprint. Regardless of size, all organisations need to have a plan for when things unexpectedly go wrong. Otherwise, they’ll fall prey to panic and potentially irreversible consequences.

With a robust contingency plan, a business can quickly overcome a sudden obstacle and return to normal operations. As a result, this protects valuable resources, minimises customer inconvenience and ensures employees understand their responsibilities in regards to recovery.

Typically, senior management or you as the business owner will take charge and develop this plan. This should be regularly tested and continually reviewed to ensure employees are up to date and plans remain relevant as the organisation changes and grows. 

My quick tips for business contingency planning

Have you crafted a plan yet? Utilise these quick top tips to ensure your contingency plan is highly effective and actually addresses the potential risks associated with your creative agency. It’s super simple, but ensure you dedicate enough time and thought to the process otherwise, you may face the consequences later down the road when it’s too late!

#1 Identify and prioritise the key risks

Before you can begin building out a plan to combat these risks, you need to first identify them! Think about all the possible scenarios, including natural disasters, sudden changes to revenue or personal, or security threats. This should be an in-depth exploration, so be sure to include your team in the process as they may have additional insight you would have not otherwise considered. 

Once you have this list, you should determine how likely these risks are to happen. For example, an earthquake may be hugely unlikely and therefore, you won’t want to dedicate too much time to this possibility. Prioritising will allow you to determine where to focus your efforts - as creative agency owners, time is precious so make sure it’s well spent!

#2 Create an adaptable contingency plan for each

You’ve identified and prioritised these potential risks so now what? It’s time to put together a plan to mitigate these obstacles. This should be a comprehensive guide, detailing exactly who is involved both internally and externally, along with what the process is should one of these scenarios occur. 

It’s also wise to put specific procedures in place to minimise the likelihood of avoidable circumstances from playing out. Whilst we can’t predict the future, there are certain measures we can take to reduce the impact they have. 

#3 Share and maintain

Finally, you need to ensure all are aware of this plan. It’s no good keeping it to yourself! When disaster strikes, you want your team to have the knowledge and experience to handle the unexpected with as much ease as possible. 

Review the plan and make necessary changes when needed; business contingency planning is an ever-changing process and something that requires a little TLC from time to time. Be sure to also share any updates with your team to avoid mistakes should the moment arise when this plan needs to be called upon. 

So, why is it so important you have a robust contingency plan in place? 

A contingency plan is extremely useful if something goes wrong and therefore, it certainly shouldn’t be overlooked as an additional nicety for your creative agency. Having a visual, written guide will ensure anyone that studies the guide will have the knowledge and tools available to smoothly handle the unexpected, minimising the potential consequences. Let’s look into a few of the reasons why you might need this contingency plan aside from the obvious...

#1 Better flexibility

Not only can a contingency plan allow you to prepare for the unexpected, but it can also develop your ability as an organisation to better handle future events. For example, a new legislative act may be introduced by the Government and even though you may not have planned for this scenario, you’ll be able to adapt to the change. 

You and your team will be able to work relatively stress-free as you are adept to handle unexpected situations. Ensure your plan is flexible and can be amended to suit similar scenarios rather than remaining stuck in stone. 

#2 Quicker Reactions

A business with a contingency plan is more likely to respond quicker to unplanned events too. When a new challenge does arise, prepared organisations are able to overcome without much difficulty. Furthermore, having plans in place to deal with such scenarios can motivate employees to think on their feet - actively coming up with innovative solutions. 

#3 Preventing panic

People panic when they don’t have a solution to a disastrous event - it’s not so much the event itself. And, panic can be considered one of the most dangerous elements of these unexpected scenarios! If a plan of action exists and is known to all, the solution can be implemented and a quick recovery can take place, even in the worst of situations. This can considerably reduce panic levels and turn the situation on its head! 

Whilst it may seem impossible initially, it is possible to maintain order and prevent panic and ultimately, chaos from disrupting the operations of your business. Effective business contingency planning will serve all involved in the business, comprising of instructions and orders for all. 

#4 Last minute comprehension 

As a creative agency owner, it’s important you not make any decisions when you are angry or stressed. In this state, some of the most consequential decisions can be taken - ones that you are likely to regret later down the line. 

It can be tough coming up with a solution on the spot, particularly if you are stressed and handling the unknown. So, a thoroughly researched contingency plan can reduce the impact of these unexpected events and eliminate the risk of personal feeling swaying a decision. 

#5 Minimise loss

When a business faces disruption, whether it be a natural disaster or a loss of data, a contingency plan can help minimise the loss in operations and thereby, sales. Of course, we all know sales is the very lifeblood of any business! Plans to get back into action as quickly as possible, despite unforeseen circumstances can be the difference between a business’s survival and closure. 

Certainly, there are some excellent reasons for every business to conduct business contingency planning. It is far better to be proactive and have specific actions in place than to leave events to chance - even if the likelihood of the risk actually occurring is slim to none! 

Don’t let your plans go stale. New and existing employees should be made aware of their responsibilities with regular training provided to keep the team refreshed. If not maintained, their plan may be rendered useless - counterproductive and will have wasted your valuable time creating this. 

The conclusion...

It’s inevitable that at some point, disaster will hit your business. And whilst thinking on your feet can be beneficial, a robust plan can instil confidence and minimize the risk associated with these unforeseen situations. With 25+ years of experience in the industry, I can help you through the process of business contingency planning to guarantee your businesses survival should the unexpected strike. To learn more about me and what I do click here or get in touch here and discuss your individual requirements today.

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