Nah, It Will Never Happen – Oh Ya?
Written by James Sanders
Contingency plans are a topic that business owners know are important, but don’t want to think about. What happens if a key leader passes away or suddenly departs? If your company’s headquarters is destroyed in a fire, what would you do? 9/11, financial meltdowns, financial fraud (Enron, Madoff, FTX?), Covid, cyber breaches, etc. are all things that I bet were not totally thought of by the business world.
Unfortunately, I read stories about these types of events on a regular basis. Of course, you can come up with “what if” scenarios. However, what do you do when an unthinkable tragedy occurs? Below are some helpful questions to consider if you don’t have a plan in place:
- Who will write the contingency plan?
- What will be the scenarios you want to address?
- What will be the responses to those scenarios?
- Who is in charge of implementing the contingency plan?
- Who is the backup to that responsible person?
- How will you test your response times (kind of like a fire drill)?
- How will you adjust the plan for things you missed?
- How often will you revisit the plan and update it?
- Do the actions in the plan satisfy the requirements for insurance coverage?
- Do you have the correct amount and types of insurance coverage for the matters addressed in the contingency plan?
It is also important that you run these scenarios past your professional business advisors and other business owners you trust. You may be missing things or they may have a better solution. The key to remember with all this is something is going to happen that you do not expect. The more familiar your team is with the contingency plan (or sometimes referred to as a continuity of business plan), the faster you will be able to recover. Below are some other helpful articles: