Loughborough

# 12 – 12th February 2008

Contingency Planning
(Risk Management)

In business, as in everything else, it pays to have a plan. It pays double to have a contingency plan.

Talking to a business owner recently, the subject of contingency planning cropped up. My contact mentioned something about computer back-ups and I explained the simple steps that I take in my own business (local back-up of everything on to external hard-drive and CD, daily remote on-line back-up of vital files – in other words most of my files are stored in at least 3 places). We agreed that some form of back-up plan was a good thing. When we met yesterday, I asked if he had implemented any form of back-up. As with many things in the Important but Not-Urgent category it had been overlooked. A PC has now failed and my friend has lost a lot of data and email history. In his business it is a major nuisance. In your business, it could be the last straw.

PC’s are not the only business machine or item that can fail or be stolen. That is why contingency planning is so important.

Look at your plans (business plan, marketing plan, budget, exit plan) and ask yourself some basic questions:

• What can go wrong?
  
• What is most likely to go wrong?
  
• If one of these things goes wrong, what is the impact on the business or on my plan?
• What can I do to reduce or eliminate that risk?

Some of the things to consider, and what to do about them:

• Computers and software

Have a system for backing up your computer(s) and keeping the data away from the office. Check the back-ups work. Make sure they are done every day.

• Premises

Think about where you might be able to work if your current premises became inaccessible.

Make sure that you can contact people if the worst happens (staff, customers, suppliers).

Can you get access to your files and data?

• Staff

Have you taken out key-man insurance for yourself – to fund somebody to keep your customers for you while you are not available? What about other members of the team?

If you have a team, shadow each other and know how to do each others’ tasks.

If you are ill or otherwise unavailable, can the business keep running?

• Customers

Have a payment policy, written into your terms and conditions.

If you regularly invoice large sums to one client, check their credit references.

Consider insuring any debt – start by getting advice from your accountant.

Measure purchasing patterns against plan. Spot variances early and take corrective action.

• Suppliers

Ask your key suppliers about their contingency planning.

Review where you are at least twice a year. Ask about obsolescence, their own plans, how you might be affected.

If you are not sure, consult an expert in continuity planning.

Further Reading: Business Continuity Management Standard BS25999-1

 

Paul Fileman MIET CEng MCIM
Chartered Marketer
paul.fileman@talktosps.com
Tel:  01509 854447
Mob: 07969 188820
www.talktosps.com