Business Contingency Planning

Scenario and contingency plans avoid the dangers of simplistic, one-dimensional or linear thinking.By raising and testing various “what-if” scenarios, managers can brainstorm together and challenge their assumptions in a nonthreatening, hypothetical environment before they decide on a certain course of action.Is the risk of a major or minor impact, and is it preventable?

Scenario and contingency plans avoid the dangers of simplistic, one-dimensional or linear thinking.By raising and testing various “what-if” scenarios, managers can brainstorm together and challenge their assumptions in a nonthreatening, hypothetical environment before they decide on a certain course of action.Is the risk of a major or minor impact, and is it preventable?

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It can allow your successors in the business to focus on the fundamental purpose of the business, instead of trying to develop an action plan while in the midst of a crisis.

The plan can be used to minimize downtime, preserve the customer base, and continue delivery of the product or service in an effort to maintain cash flow.

The more aspects of the business that you directly control, the more critical a contingency plan may be for your successors.

Your contingency plan should map out plans for management and core operations.

Even if you have made arrangements for succession of ownership of your business interest through your will or a buy-sell agreement, you still need a plan for succession of management.

A short-term contingency plan can provide for the transfer of duties and continued business operations during the transitional period leading to the transfer of ownership.Are you directly responsible for the production of the company product?Are you the only person who knows how the process works? Uncertainty about the future stability of the company after an owner's death has caused many lenders to insert language in loan agreements that makes the loan immediately due upon the death of the owner (or other specified key people), causing an immediate cash concern for the business.The more direct control you presently have over specific tasks, the greater the need for a detailed plan of action for others to follow.The following questions will guide you in formulating your contingency plan.This will evaluate the true level of risk to your business so you are able to properly manage it.Next, identify which systems are critical to supporting your business function.Scenario and Contingency Planning allows management to pressure-test plans and forecasts, and equips the company to handle the unexpected.Usage and satisfaction among survey respondents How Scenario and Contingency Planning works: Key steps in a Scenario and Contingency Planning process are: The Internet of Things is an expansive network of connected sensors and smart devices combined with advanced analytics to draw insights from the data they produce in order to monitor equipment and improve services.By: Dan Savage, Senior Vice President and Senior Trust Officer A short-term contingency plan is a strategic guide that can be used by your business to deal with your sudden, unexpected absence from the business, as in the case of disability or death.Your contingency plan should map out a procedure for the continuation of business operations that can be followed until longer-term plans are established.