“Disasters” for small and midsize enterprises (SMEs) can arise from many sources and come in all shapes and sizes. Many studies report that 60% to 80% of SMEs that are hit with a major disaster don’t survive … unless they have a contingency plan.
The big news items that catch our attention are usually about natural catastrophes like pandemic viruses, or by hurricanes, tornados, floods, and wildfires. But SMEs can also be severely impacted by death or disability of owners or key employees, strategic blunders, or by lawsuits from clients, partners, or competitors.
The costs of any disaster can be significant, and very often there is inadequate or no insurance coverage. In contrast, the out-of-pocket costs of preparation planning are tiny. And yet, we find most often a contingency plan is one of those “important,” but rarely “urgent” things on many to do lists.
Simplify Your Planning
- Make a list of internal staff and external experts who can help you get a handle on this Contingency Plan project. Jot down the ideal roles and responsibilities for each specialist. Your team can help with timetables, motivation, and input. Don’t do this alone!
- Identify your business vulnerabilities. What could be a “disaster” or crisis for your business? This is the key starting point and a good time to create a cause and impact worksheet: how could it happen, and how bad could it be. Team members can provide creative ideas.
- List each vulnerability. Something that could cause a disaster – can have different causes and impacts. List these on your worksheet.
- For each “cause,” consider how to prevent a loss or disaster from happening.
- Each “impact” will need a contingency or mitigation plan. What plans can you create in advance to help a faster and less-costly recovery?
- Each plan step can be expanded with specific action items, team member assignments, responsibilities, and authorities (i.e., budget). This is where checklists can be an essential aid to team members.
Note: you will find many over-lapping action steps, so you’ll be able to re-use lots of steps to mitigate the impacts of different disasters.
- Some research with outside resources may be useful to complete your action plan checklists. Expertise may include: insurance, legal, accident investigation, training courses, regulatory requirements, contingency plans of major suppliers and clients.
- Set timelines to get initial plan drafts, then updates with input from others. Celebrate the team’s accomplishments of even the small milestones!
- Practice is important but often neglected. Go through each step with a “tabletop” exercise of possible disaster scenarios. Verify the team’s contact lists and the URLs of resources.
- Recognize the additional benefits of prevention and mitigation planning. What operational inefficiencies have you found? What process or admin bottlenecks can you eliminate right now? What new “aha!” ideas for preventing losses have surfaced? Which team resources have you discovered as most important in a crisis?
Check out C2CB.co if you need a clarifying, no-obligation discussion, or some pro-bono consulting help about how to get any of this done.