(3 minute read)
Worst case scenario plans!
Scary!
We’re back with the final part of our business continuity plans! Let’s take a look at worst case scenario plans. Otherwise known as ‘scenario planning’.
In previous parts, we looked at identifying key processes and then finding out what our essential equipments are.
In scenario planning, we take a long, hard look at what could happen to our business if certain ‘adverse’ events occured. More importantly, we take a look at how these scenarios affect our key processes, individuals and assets as outlined above.
In this article, I will outline some of the most common worst case scenarios and give examples on how best to mitigate them. These scenarios can serve as a rough template for you to build your own worst case scenarios!
Worst case scenario #1: Equipment breakdown
Let’s say you run an asset heavy business, like a gym. And then one of your most popular exercise machines breaks down. And then clients get angry, you have to repair the asset and it disrupts the flow of business. Even worse, more than half of your equipment experiences a break down – that pretty much grinds your business to a standstill. The risk becomes even greater the more your business relies on single pieces of equipment to do all their work (like a digger for a small time building contractor). So to prevent this situation, we can:
- Regularly maintain and service business equipment
- Purchase mechanical/accidental insurance on certain assets (especially true for vehicles/plant & machinery)
- Use the equipment for its prescribed usage (a no-brainer, but still worth pointing out)
Action plan for equipment breakdown
Should the equipment still breakdown, here are some suggestions on what you can do:
- Use alternative assets – a spare exercise machine; a spare digger or improvise using other equipment. A Stairmaster can replace a broken treadmill in a pinch.
- Fix the broken asset – while alternative measures are put in place, fix the broken asset!
- Future proofing – think about if you need to replace the current asset since it broke down. Is it worth purchasing a new asset that won’t break down as frequently.
Worst case scenario #2: Business owner falls sick
You’re not a super hero, we get it. You fall sick. Therefore, you need to plan for what happens if you fall sick. Like most business owners, if you fall sick, it is quite likely that the rest of your business suffers as well. Obviously, we can do our best to prevent this by:
- Eating well
- Exercising regularly
- Taking breaks
But this isn’t a health and wellness blog! So let’s talk about action plans!!!
Action plan for business owner falling sick
- Arrange for an appointment with the GP – well, duh.
- Arrange for cover – revert back to your key individuals list. Figure out who is available to cover for you and get them onto it!
- Cancel any client/supplier appointments – sorry, but you’re sick. Go and rest and clear out your schedule.
What happens when your kids fall sick?
Well, that depends on whether you have family nearby. Those of us lucky enough to live near to our parents can always drop off sick children with the grandparents. However, if you don’t live near family, refer back to the action plan above. If your kids require care, it’s as good as you falling sick yourself.
Worst case scenario #3: Loss of team members
Team members come, team members go. That’s part of business. But it still sucks when that guy you trained up and relied on to do stuff for you suddenly ups and leaves. So what can we do to mitigate the loss of team members?
- Have regular catch ups with your team members – it may not prevent them from leaving you, but this establishes regular communications, which in turn, helps you get a heads up if someone is going to leave.
- Make sure your expectations align with your team members – find out what it is that they want. And then do your best to align that with what your business needs.
- Review the work you have set out for them – One of the reasons people get disillusioned with their job is that they’re being asked to do too much, or too little. Check that you’ve given your team the right amount of work.
Action plan for loss of team members
Hey, it happens, but when it happens here’s what you do:
- Check with the existing team – can work be redistributed? How else can you re-jig things to keep running?
- Hire new team members – May be difficult if you live in more rural areas. Also, if you’re looking for specialised skills you may not find it.
- Come up with a training plan for new team members – more of a mitigation strategy. You should have a training module setup to train up new team members.
- Attractive remuneration – not always the most viable solution, but if someone wants to leave, try throwing some money at them and see if that’ll make them change their mind. It may be crude, but it sure as heck works! Provided you can afford it
Worst case scenario #4: Pandemic Driven Lockdown
Well, obviously there is no mitigation strategy for this. (Apart from listening to the authorities and the experts). So let’s jump straight into the action plan!!!!
Action plan for Lockdowns:
- Review the guidelines for lockdowns, can you deliver your products/services during lockdowns?
- Think about how you can work within the rules framework and deliver your services
- Apply for governmental assistance if you can.
What now for worst case scenarios?
So there you have it, some really basic worst case scenarios you can use as a basis for developing your own worst case scenario plans. Remember that every business is unique and you may have areas specifc to your business that others don’t have. If you are a hospitality business, you will likely be hit harder by the pandemic then an online accountant working at home.
If you need a tailor made business continuity plan, get in touch with me at www.shadvisory.co.nz