Nobody can predict the future, which means you have no idea of knowing what could happen to your business. How many people predicted the pandemic this year? It came out of nowhere, completely altering the way the business world operates. There’s every chance that something else could come out of nowhere and rock your business yet again. For this reason, you must develop a contingency strategy.
What is a contingency strategy?
It’s a plan of action for situations that sneak up on you without prior warning. You have a strategy in place to minimise the damage felt by your business in these scenarios. Every successful business owner has one, and you have to start developing yours.
The whole idea is that you try to predict what could go wrong if a disaster strikes. Obviously, you can’t predict everything, but you can look at your company and pinpoint a few areas that will always be affected by a big issue. With that in mind, here are some actionable tips to create your contingency plan today:
Buy more stock than you need
It’s always a good idea to have more stock than you actually need. We’re talking about supplies and materials your business needs, and you should buy them in large quantities. Your supply chain will always be hurt when disaster strikes. Look at COVID-19 as the example; businesses couldn’t get supplies shipped from certain countries, severely harming the way they operated. To avoid this, you need a surplus of stock to call upon if supplies dry up. This is especially important for businesses in the manufacturing industry or companies with warehouses full of machinery. What happens if your fuel supply & delivery service can no longer deliver? Or, all your raw materials can’t make it to you? Your business will just shut down until deliveries can be made. But, if you bought in bulk and had a solid supply waiting in the wings, you can carry on with some degree of normality. The same goes for all other businesses as well – if you need things to operate, but those things in bulk and stockpile.
Implement work-from-home measures
Adopt a more flexible working pattern for yourself and your employees. Spend a few days a month working from home out of the office. This gets everyone used to working remotely and ensures you already have work-from-home measures in place. So, if something happens and your building is closed, you can work from home without any issues. It enables a seamless transition that minimises disruptions and lets you carry on as normal.
Start an emergency fund
Your business needs an emergency fund to save some of your earnings for a rainy day. Basically, this fund stays untouched unless absolutely essential expenses pop up. If a disaster happens, your revenue could dry up. You have no way of making money, or you make a fraction of what you’re used to. Now, you can use your emergency fund to cover employee wages, expenses, and so on. It offers an extra financial safety net to prevent you from going under. Lots of small businesses have sadly closed during the pandemic because they had no emergency funds and simply ran out of money.
You can do many more things to develop a detailed contingency plan. Still, these three ideas are an excellent place to start. Work on your plan today, and you can stop a disaster from crippling your business tomorrow.