Expect the Unexpected – Why a Closely-Held Business Needs to Plan For Contingencies
To Our Valued Clients and Friends:
Are chief executives prescient? In a PriceWaterhouseCoopers’ annual survey of executives, 73% of them anticipated facing a crisis for their businesses within the next two to three years. As we navigate our second year of COVID-19, it makes us wonder whether any of them could have anticipated a global pandemic such as we have been experiencing, a crisis of such epic proportions. However, they were certainly right to anticipate a crisis of some sort.
We can’t ever know what the future holds, but one thing we can know – something unexpected will happen. We don’t know when, we don’t know what, and we don’t know what the impact will be or how long it will last. But it’s a good idea to anticipate and prepare for contingencies and emergencies to the extent we can – and it might surprise us to find out just how much planning can mitigate the effects of an unexpected crisis.
This email is Part I of a series on how businesses can plan for unexpected events; this week, we will offer a general overview of areas to consider when planning. As we move through the series, we will go into greater detail on each specific area of planning for the unexpected.
We’re all suffering through COVID-19; according to Score’s September 2020 report, the pandemic has affected just about every U.S. business, but closely-held businesses have been especially hard hit.
None of us can plan for each and every possibility; it’s counterproductive and too expensive to try. But it is possible to develop a mindset of overall readiness, to institute flexible disaster-response policies and procedures which will help keep your business running in any crisis. You should continuously re-evaluate these policies and practices to improve their effectiveness, and you should maintain and update a business continuity agreement in order to ensure your business stays afloat in a storm.
Key elements of planning your businesses’ preparedness:
- First and foremost, know your risks. Identify the most likely disruptions to your business, and focus on preparing for those.
- Make sure your technology and data storage resources are secured, backup systems in place.
- Set your team up for remote work.
- Review your Business Interruption insurance to ensure it provides sufficient coverage. If you don’t have such coverage, get it.
- Have a written disaster-preparedness plan; make sure it is disseminated and discussed with your team, so everyone knows what’s expected of them. Make sure you review this plan once or twice annually and revisit the discussion every time you make an update.
- Test your plan periodically, to see whether it works in practice for your business, yourself, and your team.
- Make sure you have a business succession plan in place, as well as a business continuity agreement.
One last note – some emergencies stem from the unexpected result of a project or change initiative. It’s a good idea to plan out potential scenarios before putting the final touch on your project or change, preferably with input from those who will be most affected.
What preparations have you instituted to prepare your business for the unexpected?
Please click here to email me directly – I’d love to hear your strategies!
Until next Wednesday –