In the last article we talked about having a contingency fund for cash flow crunches. Unfortunately, lack of cash flow is only one of many possible issues can spell disaster for a business. Calamities without Contingencies, #4 on our list, should be a wakeup call for any entrepreneur or manager that hasn’t written a Contingency Plan. There are several different types of issues that are more or less important, depending on your business, facilities, and number of employees. Here, we’re going to focus on a few operational disruptions, but we hope you’ll investigate further. Public Safety Canada is a good place to start.
Threats to Plan For:Utilities – What will happen if the power goes out? What if you don’t have water or the sewage system backs up? Are you dependent on natural gas? In each of these scenarios, plan for short, medium, and long term outages, considering what you could do in advance to mitigate the impact. For example, have all of your computers plugged into a battery backup system, allowing files to be saved and computers to be shut down properly – procedures that should be documented in your plan.Natural Disasters – Fires, floods, and earthquakes are happening with increased frequency, and sometimes in areas with little history of such incidents. Your plan should cover protecting your business assets, including employees, to the extent possible, as well as alternatives to getting back up and running as soon as possible. Also think about your major suppliers, distributors, and customers. What if they are impacted?Illnesses – This has been the worst flu season in North America, and flu is just one of many contagious diseases that can impact on the work place. Employee illness can be an even greater concern if you have staff that travel frequently, particularly overseas. Your plan should consider the sudden loss of workers, and the cost/benefit of mitigating risk with paid sick leave, or foreign travellers staying home for a day or two following their return.
Equipment – How quickly can you make repairs or replace essential equipment? Consider production, transportation and communications. Remember that you may need to protect yourself from disasters that happen to your vendors and suppliers as well.