Contingency Planning for Small Businesses

There have been quite a few apocalyptic-themed movies released lately, from “This Is The End” to “World War Z” to “Rapture-Palooza.” This got me to thinking: Would my business be prepared for a (business) apocalypse?

Regardless of your reasoning, all businesses can benefit from some sound contingency planning. Any unexpected situation that disrupts a company’s normal operations can be damaging to its financial health and professional image—if not dealt with properly. And the sad truth is, most small businesses are unprepared. Here are four contingency planning tips to make your life a little easier in a time of crisis:

What do you do if a key employee is out?

This, of course,depends on the person and the situation.That being said, it is important to cross-train—and effectively communicate—with your employees, so that there is always a general awareness of what’s going on. That way, if a key employee is absent for some reason, there are people who are in the know and trained to fill in for that moment. Key employees are key for a reason, but this way, you will have the best-case backup scenario, and you can get through the absence with a minimal amount of business disruption.

Do you have proper backups of critical company records?

Given that digital storage is becoming cheaper every day, I would advocate investing in scanning key paper documents, and storing them in at least two locations, so that you are immune to the risk of a single event wiping out some key data or documents. And although scanning can be somewhat expensive up front, it’s not nearly as expensive as permanently losing key documents or data.

What do you do if you experience theft or destruction of intellectual or physical property?

Not all companies have a single piece of information, like Coca Cola, that they can put into a vault. Most of us have many pieces of information and key pieces of property that we use on a day-to-day basis, and as a result we need to insure against the theft or destruction of those things. Having a good insurance agent who can adequately assess the risks is critical.

Accidents are going to happen, and there’s no way to predict or prevent them 100% of the time, and when they happen the only thing that’s going to help your company move forward in a reasonable way is having insurance. You should think about not just the cost to replace any critical items themselves, but also of the cost of the business disruption.

Are you sure you have the correct legal procedures in place to help minimize any damage caused by a catastrophic event?

I would advocate that you try to, at least once a year, sit down with your corporate attorney or in-house lawyer to do an assessment of any changes in the laws or regulations that impact your business from the outside, as well as any changes from the inside of your business, to ensure that you are adjusting with the changes over time. Too many companies have outdated legal policies, and while many businesses don’t want to spend the time or the money on these types of legal costs, it can ultimately save you 10- or 100-fold in the long run.

Mark Briggs has been representing businesses and their owners for nearly 20 years, first as an associate and partner at the national law firm Quarles & Brady and now with Briggs Law Group, which he founded in 2009.  Among his many other awards and accolades, Mark has been peer-review rated AV Preeminent, the highest possible rating for both legal skills and ethics, by Martindale-Hubbell for the last six consecutive years.

Image courtesy joguldi

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