When health emergencies or natural disasters strike, it’s only natural for many small businesses to feel nervous. Anxiety and uncertainty surround these types of unforeseen events. While you may feel that there are many elements out of your control, there are steps you can take to minimize the potential impact on your business. Contingency planning is building a procedure to prepare for worst-case scenarios. When things go wrong, you can turn to your contingency plan to help get things back on track again. Learn how you fortify your own business through small business contingency planning.
Contingency Planning Steps You Can Take Right Away
The majority of contingency situations are out of your control. When these unforeseen events occur, knowledge is essential, and that starts by staying up to date with official news sources. Particularly in rapidly changing situations, you need to be equipped with as many facts as you can get. Being informed will help you feel more prepared to make decisions for your business, answer questions from customers, and plan for the days ahead.
Take a look at your cancellation and rescheduling policies. This can be a fine balancing act. It’s tempting during good times, when business is booming, to make these policies as lenient as possible. However, when times get tough, you want to make sure your business is protected. Do your best to care for your employees while still taking care of your business.
Manage your client relationships. For a small business, over-communicating is better than under-communicating. Check in with them, see how they are doing, and let them know the status of your business. That could mean creating a video message for your website, posting updates on social media, or even sending them a personalized greeting card.
Contingency Planning Steps You Can Take In the Next Week
After you’ve taken some immediate contingency planning steps, the next thing is to start looking ahead, and that means creating a backup plan. What happens if you are sick or injured and can’t perform your job? Small businesses need a backup plan, a person, or people you trust who can step in when and if needed. Make sure employees and clients are aware of your backup plan and who they can turn to if you aren’t available. Another option, if your employees can’t make it to work, is investing in video meeting software. Then, when or if you can’t hold in-person meetings, you can hold them via video meetings instead.
Once you have your backup plan in place, you need to make sure you are fully acquainted with your financial position. How is your cash flow? What are your monthly costs? How much business can you afford to lose each month while still maintaining a positive cash flow? These may be hard questions to ask, but the answers will determine your next steps. If your projected cash flow over the next 3-6 months is negative due to loss of business, it will be essential for you to identify some new revenue streams or pivot your business strategy. Could you focus on a different market? Offer digital or remote services? Remember that a pivot on your business strategy, or exploring new income streams, could affect your brand. It’s important to communicate any business changes through messages and imagery on your website and social media channels.
One additional step for your finances is to create an emergency fund. This can be a two-pronged approach. First, set up a savings plan. Take a look at your cash flow and set a monthly savings goal. Second, get a pre-approved emergency line of credit.
Best Practices for Small Business Contingency Planning
Write everything down. Even those small details that feel inconsequential. Pretend that someone else will need to follow your contingency plan, and you won’t be there to answer any questions. Give them all the information they might need to run your business.
Don’t forget to take care of yourself and your employees. Particularly during times of stress, it’s important for everyone to be both emotionally and physically cared for. While everyone has different needs, there are some things everyone can benefit from, namely eating well, getting enough sleep, getting in some quiet or reflection time each day, and getting regular physical activity. Taking care of yourself and your employees will help everyone do a better job of taking care of business.
At Safeguard, we are here for you. We’ve got solutions that make managing and marketing your business easier, even in difficult times. Give us a call to get connected with your local Safeguard advisor.
- Contingency planning is building a procedure to prepare for worst-case scenarios.
- When things go wrong, you can turn to your contingency plan to help get things back on track again.
- The majority of contingency situations are out of your control. When these uncontrollable, unforeseen events occur, knowledge is essential.
- Use best practices for small business contingency planning.