Contingency Plan – More than Backup
Editor’s Note: This post was updated September 2020. – More than a decade ago I wrote this post about backing up your business. I never imagined I would still need to be talking about basic a contingency plan after all this time. But here we are.
Let me start by saying, I am an optimist. I believe things will work out. However, when it comes to my business I also know that things can go wrong, and having a contingency plan is not being negative, it is being prepared.
Accidents happen and even minor mishaps can be major catastrophes for small business owners. Every year, thousands of companies are unprepared for the interruption caused by a minor fire, flood, and burglary or computer meltdown. Whether you are dealing with natural disasters or simply working remotely, these precautions are more relevant today than ever before.
Create and Implement a Business Contingency Plan
Access to Your Information
If you are like most small business owners, your computer is the heart and soul of the business. Contracts, financial records, project plans all live in a virtual state on your desktop. Unfortunately computers crash, virus’ attack, natural disasters occur and every user makes mistakes from time to time.
The consequences can be disastrous. Rebuilding financial information, contact lists, E-mail records or project files can be time-consuming, expensive and sometimes impossible.
Have a robust data back up plan in place. You have lots of options ranging from a second on-site server to sending copies of all your files to the cloud every night.
Not sure if you need to spend the money? Ask yourself these questions: If my computer didn’t turn on tomorrow:
- Would I still have a business?
- Would I lose a significant amount of time, and money rebuilding my data
- Would I know what to do?
If you don’t have a robust back up spend some time with an IT professional. Talk about how often you update critical files which are integral to your business and they will make an appropriate recommendation.
Having access to your information is a key starting point, but surviving a crisis requires a contingency plan that looks at more than just data recovery.
The Rest of the Contingency Plan
Where you will operate if your office is damaged or destroyed? Beyond restoring your data, you need to plan for equipment replacement. Talk to your insurance agent to be sure you have enough coverage to replace furniture, equipment, inventory and other assets. Take the time to inventory all the assets in your building. Have a list of important equipment, serial numbers, purchase date and even photos. This will really simplify the process of filing that insurance claim.
Where will you and your team work if your building is not accessible? While these days it is easier than ever to work from home. Putting systems in place for employees to work remotely is helpful even if it is only a day or two interruptions caused by inclement weather. You just don’t want to test those systems for the very first time when something big goes wrong.
Disasters have a way of piling up. Not only will you need to deal with the things listed above, you may incur additional expenses for moving or damages caused by missed deadlines. Business continuity insurance will help cover the other unexpected costs.
Who will take care of your customers if you can’t? In the event you can not complete a project or meet a deadline because of the business interruption, you should have relationships with someone else who can serve your customers on a short term basis. This will allow you to preserve the customer relationship for the long term.
A Contingency Plan Helps Your Business Survive
According to the Financial Planning Association, of the businesses that suffer a disaster, 40% fail to reopen and 25% that reopen close within a year. Plan ahead!
Disaster may never strike and you may never need to execute your plan. But if something does happen, a well thought out continuity plan will help you through the transition and increase the odds that a temporary business interruption does not become a permanent one.
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Lorraine Ball will speak at the Six-Figure Salon Conference on September 14-18. This is a virual event for women business owners looking to grow
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I participated in a one day promotion, with smart women business owners from around the world. I learned so much from each of them.