Prepare for the New Year with a Business Contingency Plan

If the last few years have taught us anything, it’s that stability within the financial and business world is not guaranteed. The pandemic highlighted the importance of adaptability for companies, and although none of us could have prepared for the changes, by preparing for any possibility you have a better chance of futureproofing your business. One way to achieve this is through a business contingency plan.

What is a Business Contingency Plan?

This is a strategy covering any scenario which puts your company at risk, and how you’ll act to overcome it. They can cover any sized event from losing a client or member of staff, to business-critical issues or natural disasters. It includes who’s your key contact, action plans and financial support if needed.

How to Write a Business Contingency Plan

Although it may seem like a daunting task, it’s an essential part of business planning to prepare for the unexpected. Your contingency plan can cover several areas such as operations, logistics or market changes, but we’ve addressed 5 key areas you should consider:

1. Monitor Your Supply Chain

Many businesses rely on 3^rd party services to keep their operations running. But their own contingency plan could impact yours. Always have alternative suppliers to hand in case you need a new or more cost-effective option.

2. Preparing for Recession

Consider the different levels of recession and what your turnover would look like at each stage. As your cash flow reduces, do you have the funds or resources to cover it? If not, do you have access to any profitable assets which you could refinance? By planning for different scenarios, you can create different solutions.

3. Staffing Issues

Remember, a business cannot run on one person alone. Especially if that one person falls ill or leaves the firm. You need to ensure you have a second in command for every role within your business. You could also consider cross-training staff to boost team morale and invest within their own development.

4. Consistent Cash Flow

Some situations you can’t predict, so it’s important to have access to emergency funds if needed. Consider Finance Leases or Hire Purchases to help bridge these gaps. We’d recommend applying for these when business is performing well, as they can be harder to obtain during recessions or when business is struggling.

5. Research Your Industry

Keep an eye and ear out of what’s happening within your industry. Various factors can impact industries differently so it’s essential you know what changes in the economy could affect yours.

Ask for Help

Here at Busby Finance, we can support you through any financial concerns, providing expert recommendations on how you can secure additional funds and build a robust business contingency plan for 2023. For more information, contact our friendly team today.