Critical risks and contingencies business plan

Next, identify the threats that could harm each critical operation. But what if your main supplier suddenly goes bankrupt, your entire sales force comes down with food poisoning, or your website is held to ransom by hackers?

Critical risks and contingencies business plan

But what if your main supplier suddenly goes bankrupt, your entire sales force comes down with food poisoning, or your website is held to ransom by hackers? Or you may choose not to formally plan for some lower-priority risks at all, but to manage them if they do happen. Product Issues: for example, what would happen if your product needed to be recalled? Create the Contingency Plan At this stage we have a prioritized list of risks, that is, a list of things that might go wrong including how they might go wrong, and what impact that might have on the organization. The organization structure has changed. However, if your product was found to cause actual bodily harm to one of your customers then this would require not only internal communications but also very carefully managed public relations. A simple process we can use to assess risks is as follows: a. In this article, we explore how to create and maintain robust contingency plans, so that you've always got a backup option when things go wrong. Measure each of these threats based on how likely they are to occur and how much damage they could do to the business. Assess the Risks Before we can develop our contingency plan we need to understand the potential risks being faced by the organization. Identify the needs of all stakeholders up front and involve them in creating the contingency plan. Each identified risk can be rated on a scale of one to five, with one being the least likely to occur and causing the least damage and five being the most likely to occur and causing the most damage.

This is to avoid the very undesirable situation where a disaster such as a fire, destroys not only a key building but also the contingency plan itself!

It can also prepare you for more commonplace problems, such as the loss of data, staff, customers, or business relationships.

Sales contingency plan example

In our example above, this means that we would create a contingency plan for risks 1 and 3 before moving on to the lower priority risks. Governmental Issues: for example, what would happen if the sales tax rate suddenly changed? In this article, we explore how to create and maintain robust contingency plans, so that you've always got a backup option when things go wrong. What if the entire sales team was ill for a week? For example, what if a certain supplier went bankrupt? Supplier Issues: for example, what would happen if a supplier terminated their contract? But what if your main supplier suddenly goes bankrupt, your entire sales force comes down with food poisoning, or your website is held to ransom by hackers? These could include the loss of key staff, technical failure, or a change in government policy, for example. The first step is to identify your business-critical operations. The most sensible way to start this work is to tackle the highest priority threats first. These charts help you to analyze the impact of each risk, and to estimate how likely it is to happen.

Fires, floods, tornadoes — these are the type of events that we often associate with contingency planning. Aim to include a broad range of scenarios — for instance, cyber attacks, prolonged staff absences, IT malfunctions, loss of suppliers, serious power outages, or structural problems with your business premises.

contingency plan pdf

They key to identifying yours is to conduct a thorough risk assessment. Document communications: different contingency plans will require different communications.

Examples of mitigation and contingency plans

The four basic approaches to risk are risk avoidance, risk reduction, risk sharing or transfer, and risk retention. Risk managers can create detailed plans to deal with the most likely situations the organization will face or those that will do the most harm. What if the entire sales team was ill for a week? In this article, we explore how to create and maintain robust contingency plans, so that you've always got a backup option when things go wrong. The first step is to identify your business-critical operations. There are two ways in which to approach keeping your contingency plans up to date. Then, map out what should happen in each case see Examples 1 and 2, below. This can range from a fire evacuation plan to appointing an emergency coordinator to help with evacuations or media contacts. While it may not be possible to plan for every possible emergency, most businesses can identify those they are most likely to face and those that will cost them the most if they come to pass. Tip: Contingency planning is one response to risk. Our article, Communicating in a Crisis , explores how to plan and deliver effective communication in difficult situations. Or you may choose not to formally plan for some lower-priority risks at all, but to manage them if they do happen. Legal Issues: for example, what would happen if you were alleged to be in breach of copyright?

Equipment Issues: for example, what would happen if a key piece of equipment or software failed? Risk Option Evaluation Once identified, a business can decide what it will do with the risk it faces.

Importance of contingency planning

Despite there being no right or wrong way to put together a contingency plan, you may find the following pointers useful: Determine the precondition: what event has to happen for the contingency plan to be activated? That is, to simulate the triggering of a contingency plan to perform a dry run through the steps detailed in the plan. Response Include a brief overview of the strategy that you will follow in response to the event. However, if your product was found to cause actual bodily harm to one of your customers then this would require not only internal communications but also very carefully managed public relations. This will help ensure that the plan is fit for purpose. Risk reduction means putting procedures into place that will make the risk less likely to occur or mitigate the effects if it does occur. These could include the loss of key staff, technical failure, or a change in government policy, for example. Triggers Specify what, exactly, will cause you to put your contingency plan into action. Conducting a Risk Assessment Every organization faces a unique set of risks that it needs to plan for. Identify the Risks For each of these critical parts of the business, find the risks being faced.
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Managing Risk and Contingency Planning