Emergency contingency plan for your business – April 2014

Emergency contingency plan for your business – April 2014

Your business is critical to your financial well being and could also be a necessary service to the wider community, so it’s important to protect what you can in times of crisis. There are of course all the natural disasters such as bush fires, floods and even earthquakes that can strike without warning, but Australian business owners have been found to often lack a plan for other possible negative situations.

Emergency management is not just about natural disasters (although you should be prepared for these too), as there are many other circumstances that can arise that could potentially knock your business out of kilter or even out of action.

A contingency plan should outline alternative solutions to problems and procedures to follow in the event of an unexpected event or emergency. In a small business, any downtime in operations can be extremely costly and can result in you losing money and customers to your competitors.

Business Building Blocks is a free online learning resource for small business owners and is a government funded initiative through the Council of Small Business Organisations of Australia (COSBOA), Business Enterprise Centres Australia and the University of Western Sydney.  Business Building Blocks suggests that when developing a contingency plan for your business, you should consider the following potential situations:

• a key employee is unable to work for an extended period of time due to illness or injury
• your supplier is unable to provide your business with the supplies you need to remain operational
• a crucial piece of equipment, machinery or a vehicle breaks down
• a severe weather event causes extensive damage to your premises and you cannot use it for a period of time
• a computer virus corrupts the data on your main computer which you are unable to recover
• an employee suffers a workplace accident and requires immediate assistance and medical treatment
• a large, long term customer cancels their contract with your business resulting in a dramatic fall in sales revenue.

Contingency checklist

If your business experiences a partial or total interruption to normal trading, a state government small business resources website provided the following checklist to help get back on track:

• examine your legal responsibilities with a solicitor: who can help interpret employment contracts, leases, contracts of supply, insurance policies, and give advice on your legal options
• identify all current payments that can be delayed: for example, talk to suppliers about deferring payment of invoices temporarily until the business is trading again
• meet with your bank to discuss restructuring any business or personal loans: check if they are willing to delay loan repayments, mortgage payments and the like until the business is trading again
• contact your regular suppliers to advise of your situation: if possible give them an approximate date when you will resume business. If necessary, work out alternative arrangements
• contact your leasing company: discuss alternative payment arrangements
• communicate with the landlord if you rent your premises: make arrangements such as temporarily deferring rental payments with an arrangement negotiated for the business to catch up with rent once trading resumes
• contact your industry association: see what information is available. Industry associations can often assist with information on employment contracts, alternate suppliers, and consultants who may be able to help you manage the emergency
• contact your clients/customers to advise of your situation: if possible give them an approximate date when you will resume business. If necessary, work out alternative arrangements – similar businesses in your network may be able to assist with supply of product or services.

Critical information list

There is no warning for the unexpected, so a critical information list can make it easier to hand over the running of a business to others. Here is a sample of a critical information list from a state government small business website, which you can print out and keep. And the federal government’s business.gov.au website has several guides and templates that will help with your emergency contingency planning.

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