Create a contingency plan of a company, It is essential for any company regardless of its size, because when you start a business even if you have applied the best organization, you know that total security regarding its success does not exist, because the market is constantly changing and therefore you will face different contingencies have, sometimes some more serious than others.
But the important thing is that the normal activity of your business recovers when before or in a period of time that does not affect the operation of the business, then …
What is a contingency plan for a company for?
The contingency plan of a company it undoubtedly helps you to establish prior to any economic disaster, etc. a regularization on the mechanisms that you will apply to start it up in the event of any incident that affects the security of your business.
The plan that you apply or establish will allow your business to maintain production or offer services even in a limited way and at the same time you will define the recovery of your business by establishing a minimum term, that is, your business can be restored to the same situation before the incident.
Even by setting it, predefining the limits of services or production, you will also prevent the company from interrupting its activities until you manage to normalize it.
By designing a good plan, you will prevent the disaster that has occurred from impacting the economic and financial life of the company.
What is the business contingency plan
A contingency plan of a company It is applied by all types of companies regardless of their size or business activity because they make up all the measures that will be carried out as a human and technical organizational mode in the event that any contingency arises.
Therefore, its objective is that a month can have continuity and at the same time establishes the method to follow when an unexpected situation arises that may affect the finances of the company.
Example of a contingency plan of a company
To create a contingency plan for a company, it is necessary that:
- You have all the basic and extraordinary material and human resources so that the measures that you will have in your plan can be carried out.
- It will be important that you delegate tasks, who will fulfill each of the roles, integrate the execution of the plan, how they will be involved and what their responsibilities will be.
- The risk analysis is essential to be carried out before creating the plan due to the dynamism of the companies and the changes in the situation that will normally occur.
For this reason, the plan must be constantly reviewed to update it and be applied in each situation.
Parts of a company’s contingency plan
The contingency plan of a company is made up of three parts:
- Emergency plan made up of the measures to be taken for reduction in the event of production effects.
- The backup plan is composed in view of the irrigation situation and the preventive measures taken regarding the risk situation.
- The recovery plan with the measures that will be taken to return to the previous situation of the contingency that occurred.
For example, if your business is in an area of earthquakes or cyclones, a contingency of this type can seriously affect your business to the point of making it disappear.
Then you should develop a plan that foresees this type of contingency, such as moving your business to an area free of earthquakes or cyclones.
Another example would be if you open your business and suddenly, despite the fact that it was an area without abrupt competition, when you set up your business, soon after a commercial premises with identical merchandise to the ones you sell opens, therefore you have new competition , but do not worry because you already planned with your plan and you know that this case was supposed to be at first and is now real
Therefore, you might consider starting with aggressive advertising to capture the attention of your potential customers who prefer your competition.
Although what your plan contains will vary according to your type of business, the size of your company and other factors, in the event of any disaster that may occur, it should contain the instructions to follow so that the company can face any threat to its security. .
At the same time, it should contain who will be in charge of carrying out these instructions, whether they are employees or managers of the company, the managers must be clearly detailed, since they are the ones who will follow the instructions.
For example, a fire can be a contingency, therefore as a business owner you must include in the plan the need to find a cave location for the commercial premises after stopping the purchase of materials and dismissing the employees, since in a commercial premises burned and impossible to continue with the work until the problem is solved.
After you find the new commercial space to rent or buy it, you can start again from scratch by hiring fewer employees, essential materials and you will return to the situation before the disaster occurred once you have established your new location and have started the business again. .
The truth is that you can rarely be realistic at the precise moment when disaster strikes. At that moment you lose control, you panic. The ter event caused stress and you can take wrong measures because you have nothing planned to apply in these disasters.
But if you have an established business contingency plan, none of this will happen because you will resort to the detailed instructions of the plan that you have drawn up and you will know in advance how to handle a situation of this type and therefore in this way you can ensure the continuity of your business.
Then from the plan you will avoid economic losses of your business, you will be able to resume the operations of the company in a reduced time, with which you will not lose the reliability that you knew how to acquire in the course of the time in which your business remained operational. ,