The Best Time to Apply for Business Financing is Before You Need It

The best way for your business to survive a disaster is to be prepared. Just like the expression says, you should always “expect the unexpected” (hello COVID-19 pandemic and soaring gas prices!). While your company might not be able to imagine every possible scenario that could adversely affect your operations, creating a roadmap for how your business could respond to an unforeseen event will greatly help you mitigate risk.

What is a Business Contingency Plan?

A business contingency plan is essentially a blueprint to help your business be better equipped to handle a “what if” scenario like a natural disaster, cyberattack, or unexpected event. It helps you identify potential risks and outlines a course of action to take to reduce the impact of a disaster. If something goes wrong, having a business contingency plan in place will help you:

Bounce back quicker

Minimize the downtime and disruption to your company. A business contingency plan is essentially a blueprint to help your business be better equipped to handle a “what if” scenario like a natural disaster,

Save money

Preserve your company’s reputation and prevent bad press. A business contingency plan is essentially a blueprint to help your business be better equipped to handle a “what if” scenario like a natural disaster,

How Do I Make a Business Contingency Plan?

Creating a detailed business contingency plan requires a bit of time and research. Here’s how to get started:

1. Brainstorm and identify potential risks to your business
   Before you can begin to plan for risks, you have to identify them. Ask yourself what could happen that could impact your business. Potential risks can be anything from a major hurricane causing irreparable damage to your retail store, to your website getting hacked, to all of your employees calling in sick on the same day.
2. Create a list of these risks and rank them according to severity and probability of occurrence
   Consider the likelihood of all of the risks you identified in step 1, as well as how severely each one would affect your business. For example, if you live in a geographical area where a hurricane is highly unlikely to occur, that would be ranked lower on your list. As far as the severity of different risks goes, it may differ greatly from business to business. A power outage that could be extremely costly to one company, may not be that serious of a problem for another.