What Is A Contingency Plan & How Do You Create One?

Creating a contingency plan doesn’t need to be difficult. Follow these seven steps to develop your contingency plan, from creating a policy state and implementing preventive controls to testing and training employees and maintaining your contingency plan.

Here’s how to create a contingency plan in seven steps:

Step 1. Create a Policy Statement

A policy statement is the outline of the authorization that exists to develop a contingency plan. This might be something as simply stating a possible scenario and noting that owners have put this plan in place.

Step 2. Conduct a Business Impact Analysis

This step digs into what would happen if no contingency plan existed. It prioritizes the systems that are imperative to the business functions.

Step 3. Implement Preventative Controls

This step is designed to mitigate any adverse scenario’s impact on the business. The goal is to reduce the costs associated with running the business on a contingency plan basis.

Step 4. Develop Contingency Strategies

These are recovery strategies that help the business ensure that it will recover quickly and efficiently after a disruption occurs. Contingency strategies may be specific to the type of disruption that happens.

Step 5. Write Out the Contingency Plan

This step takes the strategies and writes out an action plan that is designed to overcome the disruption. It is a detailed response that allows the business operation to continue to work. Step

6. Test and Train Employees

Every contingency plan should be shared with employees well in advance of needing to enact the plan. Employees should be trained on what to do in specific scenarios and help keep the business operations running as smoothly as possible.

Step 7. Maintain the Plan

Keep the plan updated based on current systems and organizational changes. You don’t want to implement the plan and then run into a hiccup because a key employee is no longer with the firm or the system doesn’t allow you to do what you want to do.