Business contingency plan
SACS Consulting

Do you know that business continuity, risk management, and disaster recovery can all be prevented by a business contingency plan? There are a million possibilities that every business will face a breakdown at an unknown time. What then helps you discover and tackle those problems when they happen? Now you see, it all boils down to a business contingency plan. But what exactly is a contingency plan for a business by definition? How does one define a business contingency plan? Are there any templates for a business contingency plan? These are questions that will be carefully buttressed below.

What Is a Business Contingency Plan?

By definition, a business contingency plan is a set of actions that any business would take to repair reputational or financial damage that occurred unexpectedly. It is more like having a “plan B” just in case the worst occurs. These occurrences can be in the form of natural disasters, fires, IT network failures, or even data breaches.

Mind you, a business contingency plan is not in relation to crisis management. Crisis management is usually an unprepared action taken when any corporation faces any sudden negative event. It is reactive, while a contingency plan is proactive.

A business contingency does not just cover negative events, it can also relate to a positive response. This positive response can even be in form of a small-scale business getting an unexpected huge contract that is beyond their normal capabilities. A business contingency plan can also be possible when your company faces an unexpected influx of money from a nonprofit setting.

A contingency plan should be part of every business that is out to create a continuity strategy for the benefit of their corporation. Many companies and government organizations now spend their quality time creating multiple sets of business contingency plans. Now, how they do it is to set up a variety of contingency plans for a variety of common threats. They also go ahead to research these threats. They then choose the most prominent ones and prepare for them before they happen.

How to Create a Contingency Plan for Your Business

When creating a business contingency plan, you can look up business contingency plan examples or templates. This will enable you to have an idea of what you are going to create. Before you start creating, engage in some research processes and follow some procedures. This action will help you construct a unique contingency plan. You can also follow these steps during your contingency planning process.

#1. Formulate an Official Policy

The first step to take will be to create an official policy that includes statements on the unfaithful event that took place. This process is important because when the disastrous event finally happens, the employees and staff of the corporation will work together in response to the occurrence.

#2. Identify the Risks

You are advised to understand those possible risks, research endlessly on them, and note down the possible risks your corporation can experience so that when you are preparing for the disaster, you will be ready for anything. Even as you keep reminiscing on them, you can also involve your employees and other teams, because your plan covers the whole organization.

#3. Identify the Risks

When you have successfully discovered the possible risks your business can experience, you will then pour all attention and resources into those risks that are likely to occur. How do I find those risks? By simply ruling out uncommon risks around your environment. Try imagining building your corporation around a flood-prone area. Your main priority risk should be flooded and how to handle it when it comes.

#4. Draft Your Contingency Plan

It’s obvious you know what time it is. This next step is where you craft your business contingency plan. How do you do that? By carefully outlining those prioritised risks. Then state out a step-by-step guide on what your corporation will do when the events happen.

This supposed plan should also include how you are going to keep the corporation running while you fix the event. You will also need to have the up-to-date contact information of everyone in your company. This process is for you to reach them on time in case the event should occur. You will then need to circulate the plan to all employees and ensure that they have easy access to it.

#5. Test Plan

This step requires you to conduct some tests on your business contingency plan. When you test your plan, you will be able to know its weaknesses and strengths. You would also see how effective it can be and where some adjustments need to be made.

#6. Preserve All Plans

When all the steps have been carried out, you will need to maintain and preserve them. To maintain your plan, you will always need to update it based on regular changes in your environment and corporation. Ensure that the stakeholders know their roles when the event spikes up, and if it is not stressful, you can conduct a rehearsal to cross-check that everyone is on the right track. Always review your plan to make sure that it is up-to-date. If these processes are all put in check, then your corporation is ready to accept future changes.

A Business Contingency Plan Template

The essence of a business contingency plan template is to have a clear guide, especially for a new experience. This article has enlisted some business contingency plan templates that can help you compose a simple and concise business contingency plan.

To create a plan with a template, it is best to understand each function enlisted in the business contingency plan template slide. After that, you can then list the details of your corporation in it. This business contingency plan template has been made easy just to keep everyone in the loop. You should also note that the design of a business contingency plan template only covers the risks you can identify.

Things to Consider When Creating a Business Development Plan

Owning a firm means that you will be ready to carry all the individuals in your corporation along with you in every decision you take concerning the firm. When creating a business contingency plan, you would need to get input from everyone. Other actions that you should put into action include:

#1. Financial Stability

In the event that this disastrous event finally happens, the corporation will have to continue with its normal activities. But how can continuity happen when the finances or cash flow are not there? So, before you create a plan, your financial decisions should be considered.

#2. Customer Fidelity

Even if your firm faces a setback from the event, you still owe your customers the services you promised them. The corporation must still uphold its loyalty and rapid response to avoid losing its customers or staining the corporation’s image.

#3. Negative and Positive Events

While making your contingency plan, do not forget to plan for both a negative and a positive event. Either of the two can occur. And even if you ignore the plan, then failing won’t be hard to achieve. To get all angles right, plan for the worst scenarios.

An Example of Contingency Plans for a Small Business

How important are these business contingency plan examples? These business contingency plan examples will give you a better view of how you can handle some unexpected events. It will also show you how to boost any corporation in no time. Let’s take a good look at some real-life examples and how to tackle them with a business contingency plan.

#1. Fire

In a fire case, a corporation lost sales, customers, and increased expenses. According to the corporation’s contingency plan, their immediate action was to install a sprinkler system and identify a temporary alternate location. They also had a post-event action, which was to report the event to the insurer, and if a location was not provided within 3 days, they would move to an alternate one. Now, that’s a plan.

#2. Power Outage

In the case of a power outage, a corporation lost sales and customers. Let’s analyze their plan. In their immediate action, they bought utility interruption insurance and a generator. Their plan is to operate with a generator if the power outage lasts more than 24 hours.

#3. Equipment Breakdown

In a case of an equipment breakdown, a corporation lost sales and customers. They also had an increase in expenses, now let’s see the nature of the plan. For their immediate action, the company bought equipment breakdown insurance. They also sorted out resources to repair, replace or rent. Their post-action was to contact a repair shop and get ready to rent equipment if the repair would take longer than 3 days.

Look What We Have in Stock for You…

If you have read this article, you should be aware of the importance of a business contingency plan. it is not a type of plan you would want to overlook. It is a must-have.

Beyond a contingency plan, preparing a comprehensive business plan is just as important. For example, a personal trainer business plan can help guide your steps and goals as a personal trainer, which in return can attract potential clients.


The main purpose of a business contingency plan is to enable any business or corporation to stand back on its feet without minding the severe crisis in the work arena. Planning ahead of time can help you strategize and organize your resources. With a contingency plan, you are sure to protect your resources, identify key staff and reduce customers’ inconveniences. Therefore, having a plan in place is vital for every corporation. In all, if you fail to plan, you plan to fail.


What are contingencies in business?

A business contingency plan can be defined as those mapped out actions that a business can take when an unexpected event occurs.

What are the steps of contingency planning?

The basic steps of a contingency plan to follow in a case of an outbreak cannot be limited to Program Management, Planning, Implementation, Testing/Exercise and Program Improvement.

What are the benefits of contingency planning?

When you have a contingency plan, you can save lives, money and time. A contingency plan can also help you minimize damages and aid your firm and its team bounce back to their feet within a short period.

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