Enterprises are often defined by how they deal with events that are out of their control. For example, how you react to a disruptive technology or cope with a sudden change in the markets can be the difference between success and failure.
Contingency planning is the art of preparing for the unexpected. But where do you start and how do you separate the threats that could do real harm to your business from the ones that aren’t as critical?
Here are some important definitions, best practices and strong examples to help you build contingency plans for whatever your business faces.
What is a contingency plan?
Business contingency plans, also known as “business continuity plans” or “emergency response plans” are action plans to help organizations resume normal business operations after an unintended interruption. Organizations build contingency plans to help them face a variety of threats, including natural disasters, unplanned downtime, data loss, network breaches and sudden shifts in customer demand.
A good place to start is with a series of “what if” questions that propose various worst-case scenarios you’ll need to have a plan for. For example:
- What if a critical asset breaks down, causing delays in production?
- What if your top three engineers all quit at the same time?
- What if the country where your microprocessors are built was suddenly invaded?
Good contingency plans prioritize the risks an organization faces, delegate responsibility to members of the response teams and increase the likelihood that the company will make a full recovery after a negative event.
Five steps to build a strong contingency plan
1. make a list of risks and prioritize them according to likelihood and severity..
In the first stage of the contingency planning process, stakeholders brainstorm a list of potential risks the company faces and conduct risk analysis on each one. Team members discuss possible risks, analyze the risk impact of each one and propose courses of action to increase their overall preparedness. You don’t need to create a risk management plan for every threat your company faces, just the ones your decision-makers assess as both highly likely and with a potential impact on normal business processes.
2. Create a business impact analysis (BIA) report
Business impact analysis (BIA) is a crucial step in understanding how the different business functions of an enterprise will respond to unexpected events. One way to do this is to look at how much company revenue is being generated by the business unit at risk. If the BIA indicates that it’s a high percentage, the company will most likely want to prioritize creating a contingency plan for this business risk.
3. Make a plan
For each potential threat your company faces that has both a high likelihood of occurring and a high potential impact on business operations, you can follow these three simple steps to create a plan:
- Identify triggers that will set a plan into action: For example, if a hurricane is approaching, when does the storm trigger your course of action? When it’s 50 miles away? 100 miles? Your teams will need clear guidance so they will know when to start executing the actions they’ve been assigned.
- Design an appropriate response: The threat your organization prepared for has arrived and teams are springing into action. Everyone involved will need clear, accessible instructions, protocols that are easy to follow and a way to communicate with other stakeholders.
- Delegate responsibility clearly and fairly: Like any other initiative, contingency planning requires effective project management to succeed. One proven way to address this is to create a RACI chart . RACI stands for responsible, accountable, consulted and informed, and it is widely used in crisis management to help teams and individuals delegate responsibility and react to crises in real time.
4. Get buy-in from the entire organization—and be realistic about cost
Sometimes it can be hard to justify the importance of putting resources into preparing for something that might never happen. But if the events of these past few years have taught us anything, it’s that having strong contingency plans is invaluable.
Think of the supply chain problems and critical shortages wreaked by the pandemic or the chaos to global supply chains brought about by Russia’s invasion of Ukraine. When it comes to convincing business leaders of the value of having a strong Plan B in place, it’s important to look at the big picture—not just the cost of the plan but the potential costs incurred if no plan is put in place.
5. Test and reassess your plans regularly
Markets and industries are constantly shifting, so the reality that a contingency plan faces when it is triggered might be very different than the one it was created for. Plans should be tested at least once annually, and new risk assessments performed.
Contingency plan examples
Here are some model scenarios that demonstrate how different kinds of businesses would prepare to face risks. The three-step process outlined here can be used to create contingency plans templates for whatever threats your organization faces.
A network provider facing a massive outage
What if your core business was so critical to your customers that downtime of even just a few hours could result in millions of dollars in lost revenue? Many internet and cellular networks face this challenge every year. Here’s an example of a contingency plan that would help them prepare to face this problem:
- Assess the severity and likelihood of the risk: A recent study by Open Gear showed that only 9% of global organizations avoid network outages in an average quarter. Coupled with what is known about these attacks—that they can cause millions of dollars in damage and take an immeasurable toll on business reputation—this risk would have to be considered both highly likely and highly severe in terms of the potential damage it could do to the company.
- Identify the trigger that will set your plan in action: In this example, what signs should decision-makers have watched for to know when a likely outage was beginning? These might include security breaches, looming natural disasters or any other event that has preceded outages in the past.
- Create the right response: The organization’s leaders will want to determine a reasonable recovery time objective (RTO) and recovery point objective (RPO) for each service and data category their company faces. RTO is usually measured with a simple time metric, such as days, hours or minutes. RPO is a bit more complicated as it involves determining the minimum/maximum age of files that can be recovered quickly from backup systems in order to restore the network to normal operations.
A food distribution company coping with an unexpected shortage
If your core business has complex supply chains that run through different regions and countries, monitoring geopolitical conditions in those places will be critical to maintaining the health of your business operations. In this example, we’ll look at a food distributor preparing to face a shortage of a much-needed ingredient due to volatility in a region that’s critical to its supply chain:
- Assess the severity and likelihood of the risk: The company’s leaders have been following the news in the region where they source the ingredient and are concerned about the possibility of political unrest. Since they need this ingredient to make one of their best-selling products, both the likelihood and potential severity of this risk are rated as high.
- Identify the trigger that will set your plan in action: War breaks out in the region, shutting down all ports of entry/exit and severely restricting transport within the country via air, roads and railroads. Transportation of their ingredient will be challenging until stability returns to the region.
- Create the right response: The company’s business leaders create a two-pronged contingency plan to help them face this problem. First, they proactively search for alternate suppliers of this ingredient in regions that aren’t so prone to volatility. These suppliers may cost more and take time to switch to, but when the overall cost of a general production disruption that would come about in the event of war is factored in, the cost is worth it. Second, they look for an alternative to this ingredient that they can use in their product.
A social network experiencing a customer data breach
The managers of a large social network know of a cybersecurity risk in their app that they are working to fix. In the event that they’re hacked before they fix it, they are likely to lose confidential customer data:
- Assess the severity and likelihood of risk: They rate the likelihood of this event as high , since, as a social network, they are a frequent target of attacks. They also rate the potential severity of damage to the company as high since any loss of confidential customer data will expose them to lawsuits.
- Identify the trigger that will set your plan in action: Engineers make the social network’s leadership aware that an attack has been detected and that their customer’s confidential information has been compromised.
- Create the right response: The network contracts with a special response team to come to their aid in the event of an attack and help them secure their information systems and restore app functionality. They also change their IT infrastructure to make customer data more secure. Lastly, they work with a reputable PR firm to prepare a plan for outreach and messaging to reassure customers in the event that their personal information is compromised.
The value of contingency planning
When business operations are disrupted by a negative event, good contingency planning gives an organization’s response structure and discipline. During a crisis, decision-makers and employees often feel overwhelmed by the pile-up of events beyond their control, and having a thorough backup plan helps reestablish confidence and return operations to normal.
Here are a few benefits organizations can expect from strong contingency plans:
- Improved recovery times: Businesses with good plans in place recover faster from a disruptive event than companies that haven’t prepared.
- Reduced costs—financial and reputational: Good contingency plans minimize both financial and reputational damage to a company. For example, while a data breach at a social network that compromises customer information could result in lawsuits, it could also cause long-term damage if customers decide to leave the network because they no longer trust the company to keep their personal information safe.
- Greater confidence and morale: Many organizations use contingency plans to show employees, shareholders and customers that they’ve thought through every possible eventuality that might befall their company, giving them confidence that the company has their interests in mind.
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How To Write A Contingency Plan For Your Small Business
Even if your small business is running smoothly at the moment, it’s important to be prepared in case something unexpected and out of your control goes wrong.
With a business contingency plan in place, you know exactly what to do when disaster strikes. For example, when the computer system at your business breaks down, you know who to contact right away to get the computer system up and running.
What is a Contingency Plan?
A contingency plan is a strategy that outlines the course of action that management and staff of a business need to take in response to an event that may or may not happen in the future. The plan will include steps to take so your business can proceed with regular operations after the event has occurred. Usually business contingency plans go hand-in-hand with risk management and disaster recovery.
What is the Purpose of a Contingency Plan?
Having a contingency plan in place for your small business will help you be prepared for any unforeseen event and hopefully minimizes the impact on your staff and overall health of your company.
Benefits of a Contingency Plan
Creating an effective contingency plan is helpful for many reasons. Not only will it help you bounce back quicker after a significant event, but it will help improve the morale of your staff.
Learn more about the benefits below:
- It Keeps Everyone Calm: When an emergency situation arises, people tend to panic. By having a plan in place, you can avert some of this panic. Having a clear and effective plan in place will help your employees push past their initial fears, and it will help you as the business owner, to make better decisions that will help you move quickly into recovery mode.
- Minimizes Loss: When disruptions occur, they usually have adverse impacts on production. Having a plan in place will allow your business to withstand any unforeseen circumstances without having to shut down production. Creating and following the contingency plan will help minimize loss in operations and production.
- Improves Loyalty and Trustworthiness: It is common for customers and employees to leave a business when a crisis is not handled well. Having a plan in place allows your business to show your employees and customers that you are resilient and prepared to handle any challenges that arise in the future.
How to Write a Business Contingency Plan
To create a business contingency plan for your small business, follow these steps:
- Identify all the risks with your small business. These include risks related to hardware failure, vendors going out of business and core staff leaving the company.
- Prioritize the risks based on their impact on your small business,
- Determine the impacts these risks have on your business.
- For each risk, write down the steps of what to do when it happens. For example, determine who to contact in case of hardware failure.
- Share and maintain the plan.
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What is a contingency plan? 9 steps that could save your business when crisis strikes
A business contingency plan is a backup strategy for your team or organization. It lays out how you’ll respond if unforeseen events knock your plans off track—like how you’ll pivot if you lose a key client, or what you’ll do if your software service goes down for more than three hours. Get step-by-step instructions to create an effective contingency plan, so if the unexpected happens, your team can spring into action and get things back on track.
No one wants Plan A to fail—but having a strong plan B in place is the best way to be prepared for any situation. With a solid backup plan, you can effectively respond to unforeseen events effectively and get back on track as quickly as possible.
A contingency plan is a proactive strategy to help you address negative developments and ensure business continuity. In this article, learn how to create a contingency plan for unexpected events and build recovery strategies to ensure your business remains healthy.
What is a business contingency plan?
A business contingency plan is a strategy for how your organization will respond to important or business-critical events that knock your original plans off track. Executed correctly, a business contingency plan can mitigate risk and help you get back to business as usual—as quickly as possible.
You might be familiar with contingency plans to respond to natural disasters—businesses and governments typically create contingency plans for disaster recovery after floods, earthquakes, or tornadoes.
But contingency plans are just as important for business risks. For example, you might create a contingency plan outlining what you will do if your primary competitors merge or how you’ll pivot if you lose a key client. You could even create a contingency plan for smaller occurrences that would have a big impact—like your software service going down for more than three hours.
The differences between a business contingency plan and a project risk management plan
A contingency plan is similar to a project risk management plan or a crisis management plan because it also helps you identify and resolve risks. However, a business contingency plan should cover risks that span multiple projects or even risks that could affect multiple departments. To create a contingency plan, identify and prepare for large, business-level risks.
Contingency plan examples
There are a variety of reasons you’d want to set up a contingency plan. Rather than building one contingency plan, you should build one plan for each type of large-scale risk or disaster that might strike.
Environmental contingency plan
While severe earthquakes aren’t particularly common, being unprepared when “the big one” strikes could prove to be catastrophic. This is why governments and businesses in regions prone to earthquakes create preparedness initiatives and contingency plans.
A government contingency plan for an earthquake could include things like:
The names and information of the people designated to handle certain tasks in advance to ensure the emergency response is quick and concise
Ways to educate the public on how to respond when an earthquake hits
A timeline for emergency responders.
Technology contingency plan
If your business is particularly data-heavy, for example, ensuring the safety and security of your information systems is critical. Whether a power surge damages your servers or a hacker attempts to infiltrate your network, you’ll want to have an emergency response in place.
A business’s contingency plan for a data breach could involve:
Steps to take and key team members to notify in order to get data adequately secured once more
The names and information of stakeholders to contact to discuss the impact of the data breach and the plan to protect their investment
A timeline to document what is being done to address the breach and what will need to be done to prevent data breaches in the future
9 steps to create a contingency plan
You can create a contingency plan at various levels of your organization. For example, if you're a team lead, you could create a contingency plan for your team or department. Alternatively, company executives should create business contingency plans for situations that could impact the entire organization.
As you create your contingency plan, make sure you evaluate the likelihood and severity of each risk. Then, once you’ve created your plan—or plans—get it approved by your manager or department head. That way if a negative event does occur, your team can leap to action and quickly resolve the risk without having to wait for approvals.
1. Make a list of risks
Before you can resolve risks, you first need to identify them. Start by making a list of any and all risks that might impact your company. Remember: there are different levels of contingency planning—you could be planning at the business, department, or program level. Make sure your contingency plans are aligned with the scope and magnitude of the risks you’re responsible for addressing.
A contingency plan is a large-scale effort, so hold a brainstorming session with relevant stakeholders to identify and discuss potential risks. If you aren’t sure who should be included in your brainstorming session, create a stakeholder analysis map to identify who should be involved.
2. Weigh risks based on severity and likelihood
You don’t need to create a contingency plan for every risk you laid out. Once you outline risks and potential threats, work with your stakeholders to identify the potential impact of each risk.
Evaluate each risk based on two metrics: the severity of the impact if the risk were to happen, and the likelihood of the risk occurring. During the risk assessment phase, assign each risk a severity and likelihood—we recommend using high, medium, and low.
3. Identify important risks
Once you’ve assigned a severity and likelihood to each risk, it’s up to you and your stakeholders to decide which risks are most important to address. For example, you should definitely create a contingency plan for a risk that’s high likelihood and high severity, whereas you probably don’t need to create a contingency plan for a risk that’s low likelihood and low severity.
You and your stakeholders should decide where to draw the line.
4. Conduct a business impact analysis
A business impact analysis (BIA) is a deep dive into your operations to identify exactly which systems keep your operations ticking. A BIA will help you predict what impact a specific risk could have on your business and, in turn, the response you and your team should take if that risk were to occur.
Understanding the severity and likelihood of each risk will help you determine how exactly you will need to proceed to minimize the impact of the threat to your business.
For example, what are you going to do about risks that are low severity but high likelihood? What about risks that are high severity, but relatively low likelihood?
Determining exactly what makes your business tick will help you create a contingency plan for every risk, no matter the likelihood or severity.
5. Create contingency plans for the biggest risks
Create a contingency plan for each risk you’ve identified as important. As part of that contingency plan, describe the risk, and brainstorm what your team will do if the risk comes to pass. Each plan should include all of the steps you need to take to return to business as usual.
Your contingency plan should include information about:
The triggers that will set this plan into motion
The immediate response
Who should be involved and informed
Key responsibilities, including a RACI chart if necessary
The timeline of your response (i.e. immediate things to do vs. longer-term things to do)
For example, let’s say you’ve identified a potential staff shortage as a likely and severe risk. This would significantly impact normal operations, so you want to create a contingency plan to prepare for it. Each person on your team has a very particular skill set, and it would be difficult to manage team responsibilities if more than one person left at the same time. Your contingency plan might include who can cover certain projects or processes while you hire a backfill, or how to improve team documentation to prevent siloed skillsets.
6. Get approval for contingency plans
Make sure relevant company leaders know about the plan and agree with your course of action. This is especially relevant if you’re creating team- or department-level plans. By creating a contingency plan, you’re empowering your team to respond quickly to a risk, but you want to make sure that course of action is the right one. Plus, pre-approval will allow you to set the plan in motion with confidence—knowing you’re on the right track—and without having to ask for approvals beforehand.
7. Share your contingency plans
Once you’ve created your contingency plans, share them with the right people. Make sure everyone knows what you’ll do, so if and when the time does come, you can act as quickly and seamlessly as possible. Keep your contingency plans in a central source of truth so everyone can easily access them if necessary.
Creating a project in a work management platform is a great way of distributing the plan and ensuring everyone has a step-by-step guide for how to enact it.
8. Monitor contingency plans
Review your contingency plan frequently to make sure it’s still accurate. Take into account new risks or new opportunities, like new hires or a changing business landscape. If a new executive leader joins the team, make sure to surface the contingency plan for their review as well.
9. Create new contingency plans (if necessary)
It’s great if you’ve created contingency plans for all the risks you found, but make sure you’re constantly monitoring for new risks. If you discover a new risk, and it has a high enough severity or likelihood, create a new contingency plan for that risk. Likewise, you may look back on your plans and realize that some of the scenarios you once worried about aren’t likely to happen or, if they do, they won’t impact your team as much.
Common contingency planning pitfalls—and how to avoid them
A contingency plan is a powerful tool to help you get back to normal business functions quickly. To ensure your contingency planning process is as smooth as possible, watch out for common pitfalls, like:
Lack of buy-in
It takes a lot of work to create a contingency plan, so before you get started, ensure you have support from executive stakeholders. As you create your plan, continuously check in with your sponsors to ensure you’ve addressed key risks and that your action plan is solid. By doing so, you can ensure your stakeholders see your contingency plan as something they can get behind.
Bias against “Plan B” thinking
Some company cultures don’t like to think of Plan B—they like to throw everything they have at Plan A and hope it works. But thinking this way can actually expose your team to more risks than if you proactively create a Plan B.
Think of it like checking the weather before going sailing so you don’t accidentally get caught in a storm. Nine times out of ten, a clear sunny day won’t suddenly turn stormy, but it’s always better to be prepared. Creating a contingency plan can help you ensure that, if a negative event does occur, your company will be ready to face it and bounce back as quickly as possible.
One-and-done contingency plans
It takes a lot of work to put a contingency plan together. Sometimes when you’ve finished, it can be tempting to consider it a job well done and forget about it. But make sure you schedule regular reminders (maybe once or twice a year) to review and update your contingency plan if necessary. If new risks pop up, or if your business operations change, updating your contingency plan can ensure you have the best response to negative events.
You’ve created a contingency plan—now what?
A contingency plan can be a lot of work to create, but if you ever need to use it, you’ll be glad you made one. In addition to creating a strong contingency plan, make sure you keep your plan up-to-date.
Being proactive can help you mitigate risks before they happen—so make sure to communicate your contingency plan to the team members who will be responsible for carrying them out if a risk does happen. Don’t leave your contingency plan in a document to collect dust—after creating it, you should use it if need be!
Once you’ve created the plan, make sure you store it in a central location that everyone can access, like a work management platform . If it does come time to use one of your contingency plans, storing them in a centrally accessible location can help your team quickly turn plans into action.
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An overview of business contingency plans
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Natural disasters, data hacking, theft—your organization has likely prepared for major catastrophes.
Less significant events can also be majorly disruptive—say your biggest customer suddenly switching to a competitor or your entire sales staff getting food poisoning at their annual retreat.
Many circumstances have the potential to disrupt, or worse, shut down your business. A business contingency plan can save the day. Follow the steps below to develop a business contingency plan that will help you stay prepared for the worst.
What is a contingency plan?
A contingency plan is a roadmap created by management to help an organization respond to an event that may or may not happen in the future—whether it’s a large-scale event like a natural disaster or a small-scale roadblock like employee theft.
The purpose of a business contingency plan is to maintain business continuity during and after a disruptive event. A contingency plan can also help organizations recover from disasters, manage risk, avoid negative publicity, and handle employee injuries.
By developing a contingency plan, your business can react faster to unexpected events. The faster your organization is able to get back up and running, the less impact you'll see on profits and revenue.
How to write a contingency plan
There are many factors to consider when building a contingency plan. These four steps are a good place to start preparing for the unexpected.
1. Identify the risks
Before you can prepare for a disaster, you need to understand what types of disasters you’re preparing for. Think about all the possible risks to your organization, including natural disasters, sudden changes to revenue or personnel, or security threats.
2. Prioritize the risks
Make sure you spend your time and resources preparing for events that have a high chance of occurring as you write and develop your contingency plan. For example, you may have listed earthquakes as a possible risk. However, if your area doesn't experience many earthquakes, you wouldn’t want to spend all your time preparing for this event. If your area is prone to flooding, you should spend more of your resources preparing for floods.
To determine which risks are more likely to occur, use a risk impact scale . This will help you to estimate the likelihood that an event will occur and determine where to focus your efforts.
3. Develop contingency plans
Once you’ve created a prioritized list, it’s time to put together a plan to mitigate those risks. As you write a contingency plan, it should include visuals or a step-by-step guide that outlines what to do once the event has happened and how to keep your business running. Include a list of everyone, both inside and outside of the organization, who needs to be contacted should the event occur, along with up-to-date contact information.
You can also create a list of ways to minimize the risk of these events now and start acting on it.
4. Maintain the plan
Maintenance of your contingency plan is arguably the most important part of the process because it’s where the work happens to ensure you’re always ready.
Review your plan frequently. Personnel, operational, and technological changes can make the plan inefficient, which means you may need to make some changes.
You’ll want to communicate the plan to everyone who could potentially be affected and clearly define what everyone's roles and responsibilities will be during a time of crisis.
Buniness contingency plan example
To help you prepare for the unexpected, get started with these business contingency plan examples below.
Ready to get started? Business contingency plans help you prepare your organization to handle anything unexpected. Give your employees a realistic plan for how they should handle any problem that arises.
Learn the 5 steps to an effective risk management process.
Lucidchart, a cloud-based intelligent diagramming application, is a core component of Lucid Software's Visual Collaboration Suite. This intuitive, cloud-based solution empowers teams to collaborate in real-time to build flowcharts, mockups, UML diagrams, customer journey maps, and more. Lucidchart propels teams forward to build the future faster. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit lucidchart.com.
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Free Contingency Plan Templates
By Joe Weller | March 25, 2021 (updated April 24, 2023)
Contingency plans offer organizations a proactive strategy for resuming daily functions and operations following unforeseen events. We’ve compiled the most useful contingency plan templates and tips on using them for various industries.
On this page, you'll find free contingency plan templates, including a simple contingency plan template , a software contingency plan template , a business contingency plan template , and a project management contingency plan template . Plus, learn how to use a contingency plan template .
Simple Contingency Plan Template
Use this simple contingency plan template to help your organization return to daily operations after unforeseen circumstances. Find sections for business impact analysis (BIA), recovery strategies, plan development, and testing and exercises. By completing these areas, you can stress-test your contingency plan. Assign contingency plan tasks to team members. Share the document with stakeholders to keep everyone apprised of the organization’s fail-safe contingency plan.
Download a Simple Contingency Plan Template for Microsoft Word | Adobe PDF | Smartsheet | Google Docs
For more resources on emergency response and contingency planning, see “ Free Risk Management Plan Templates .”
Simple Contingency Plan Presentation Template
Use this simple contingency plan presentation template to highlight the details of your contingency plan to your team members and other stakeholders. Slides include details for business impact analysis (BIA), recovery strategies, contingency plan development, and plan testing and exercises. It also includes a comprehensive version history slide including your presentation plan’s version, approved by, revision date, descriptions of changes, author, prepared by, and approved by sections. Keep everyone in the loop with this easy-to-use contingency plan presentation template.
Download a Simple Contingency Plan Template for PowerPoint
To learn more, read this comprehensive guide on contingency planning.
Software Contingency Plan Template
Use this software contingency plan template to identify, describe, and categorize risks, create an impact level and impact description, and create a contingency plan for each, in order to mitigate risks. For each risk, the template also includes a Trigger Points column (e.g., “What triggers the contingency scenario?”) and End Plan Trigger column (e.g., “What triggers the end of the contingency plan?”), so that team members understand the need for the contingency plan. Software project managers can use this template to create contingency plans related to data security, user privacy, geographically discrete data centers, or apply it to software development and software testing.
Download a Software Contingency Plan Template for Microsoft Excel | Google Sheets
Read this guide to contingency planning to find tips for improving your contingency preparedness.
Information Technology (IT) Service Contingency Plan Template
This easy-to-fill template focuses on keeping IT operations up and running in the event of a disruption. Use this template to document details of the scope, recovery objectives, recovery team, recovery strategy, and return-to-plan strategy of your IT department’s contingency plan. Be fully prepared for any incidents that cause downtime by using the proactive steps in this all-inclusive IT service continuity planning template.
Download an Information Technology (IT) Service Contingency Plan Template for Microsoft Word | Adobe PDF | Google Docs | Smartsheet
IT Service Contingency Plan Presentation Template
This easy-to-use information technology (IT) contingency plan presentation template is the perfect solution for presenting your IT contingency plan to key stakeholders. Slides include scope (service area, service offerings, and service areas that depend on the service at risk), recovery objectives (recovery time objectives, RTO; and recovery point objective, RPO), recovery team (service / role / function, responsibility, dependencies, and expected response time), and recovery strategy (initial recovery and overall recovery strategy). Easily gain buy-in from team members, management and other stakeholders with the all-in-one, IT-specific solution for outlining and refining your IT department’s service contingency plan.
Download an Information Technology (IT) Service Contingency Plan Template for PowerPoint | Google Slides | Smartsheet
Business Contingency Plan Template
Keep tabs on your organization’s comprehensive business contingency plan (BCP) with this distinctive business contingency plan template. It guides you through your business function recovery priorities, relocation strategy, alternate business site, recovery plan, recovery phase, records and backup details, restoration plan, recovery teams, and recovery procedures. This BCP template is useful for determining accurate planning and courses of action to ensure the success of your business’s contingency plan.
Download a Business Contingency Plan Template for Microsoft Word | Google Docs | PowerPoint | Adobe PDF | Smartsheet
Business Contingency Framework Template
This one-page template features a broad-strokes framework for performing a business impact analysis (BIA), along with working out your recovery strategy, plan development, and testing and exercises. You’re never far from the big-picture vision of your business contingency plan with this efficient one-page business contingency framework template, available in Microsoft Word, PDF, Google Docs and Slides, and presentation-friendly PowerPoint formats.
Download a Business Contingency Framework Template for Microsoft Word | Adobe PDF | Google Docs | Google Slides | PowerPoint
For more resources on business contingency planning, see “ Free Business Continuity Plan Templates .”
Project Management Contingency Plan Template
This project management contingency plan template is ideal for creating a comprehensive contingency plan for any type of project. The template enables you to create a high-level executive summary of your project’s contingency plan, including risk evaluation, a synopsis of your risk-prevention mitigation strategies process, and roles and responsibilities. Use this template to define risks and their events or triggers, consider budgetary implications, and define your potential plans of action.
Download a Project Management Contingency Plan Template for Excel | Google Sheets
Visit our article on contingency planning in project management for more information.
Small Business Contingency Plan Template
It’s critical for small businesses to have a comprehensive contingency plan that team members can reference in the event of a debilitating event or emergency. Designed specifically for small businesses, this template uses a pre-built, all-inclusive contingency plan to provide guidance for modestly sized organizations. Take the guesswork out of creating a contingency plan from scratch, and leverage the advantages of this small-business-specific template.
Download a Small Business Contingency Plan Template for Microsoft Word | Adobe PDF | Google Docs
For more resources on emergency response and contingency planning, check out our roundup of disaster recovery plan templates .
Contingency Plan Checklist Template
This two-part, fully customizable contingency plan checklist template contains a pre-built contingency plan checklist based on disaster-recovery steps, and a step-by-step, linear recovery procedure section. Use the latter section to ensure that everyone is aware of your contingency plan, if there is an event or occurrence that triggers the need to implement your plan. Then, use the checklist section to ensure that all steps in your contingency plan are in place, should you need to execute your contingency plan.
Download a Contingency Plan Checklist Template for Microsoft Word | Adobe PDF | Google Docs
What Is a Contingency Plan Template?
A contingency plan template provides a step-by-step process to communicate actionable items in the event of a disaster or disruption. The document takes the guesswork out of emergency planning, so you can protect resources, minimize interruptions, and identify go-to team contacts.
You can begin the contingency planning process by completing a contingency plan template so that you’re adequately prepared. By recording accurate and thorough information to ready yourself for an emergency, you can determine your priorities, relocation strategy, and recovery plan details. A contingency plan also helps you plan your organization’s recovery phases, work to ensure records backup, create a restoration plan, establish a recovery team, and assign roles to key individuals.
When to Use a Contingency Plan
You should use a contingency plan if there is the risk of an unexpected event that could impact your project’s success. A contingency plan is a backup plan that outlines steps for you to take in case the original plan encounters unforeseen obstacles.
The following provides a list of typical scenarios where you should use a contingency plan:
- Risky or Uncertain Situations: When there are potential risks or uncertainties that could impact the success of your project, it's a good idea to have a contingency plan in place to mitigate those risks.
- Time-Sensitive Projects: When you have a tight deadline or critical timeline that you must meet, a contingency plan can help ensure that your project is completed on time, even if unexpected issues arise.
- Resource Limitations: When you have resource constraints, such as budget or personnel, a contingency plan can help you effectively allocate resources.
- Emergency Situations: When emergencies (e.g., natural disasters, pandemics, or other crises) can impact your ability to complete your project, a contingency plan can help you and your organization respond quickly and efficiently.
Overall, you should use a contingency plan whenever there is a potential risk or uncertainty that could impact the success of your project or goal, or when there is the possibility of emergencies. When unexpected events occur, it's always better to be proactively prepared by having a plan in place, instead of scrambling to come up with a solution.
Sections of a Contingency Plan Template:
While your contingency plan will vary to meet the needs of your project, below are the common elements of a contingency plan:
- Recovery Priorities: Enter contingency plan priorities, including recovering essential operations and restoring critical functions.
- Relocation Strategy: Add the relocation strategy when your contingency plan requires moving your primary services.
- Alternate Site: Document alternate site details when you determine the secondary site where you can continue operations.
- Recovery Plan: Enter the step-by-step recovery-plan details to get your organization operational again.
- Disaster Occurrence: Use this phase to identify what constitutes a disaster that requires your organization to activate the contingency plan.
- Plan Activation: In this phase, your organization puts your contingency plan into effect, which continues until your organization secures an alternate site and can relocate operations.
- Alternate Site Operation: Operations continue at the secondary facility until you can restore them at the original site.
- Transition to Primary Site: The organization prepares to move operations back to the original site.
- Records Backup: Enter contingency plan details about how you’ll back up records and make them accessible in the event of a disaster or disruption.
- Restoration Plan: Add your plan for ensuring that all operations, records, etc., are able to be operational in the event of a facility disruption or disaster.
- Recovery Teams: List the recovery team(s) and members. Assign contingency plan tasks based on job role and title.
- Recovery Procedures: Enter details of specific activities or tasks required to adequately recover normal and critical operations.
Additionally, a contingency plan template enables you to track changes to your plan through a section for version history, comprising the following data:
- Version: Enter the unique version number for the most up-to-date iteration of the plan.
- Approved By: Ensure that department heads or other stakeholders have approved the contingency plan.
- Revision Date: Provide the date when a substantial revision was made to your contingency plan.
- Description of Change: List details of the change(s) made to the plan.
- Author: Record the name of the plan’s primary author.
How to Create a Contingency Plan
When creating a contingency plan, be proactive, thorough, and adaptable. By anticipating potential risks and developing a well-documented plan of action, organizations can minimize the negative impact of unexpected events and ensure continuity of critical functions and key services.
Here are some key steps to follow when creating a contingency plan:
- Identify Potential Risks: First, identify potential risks or unexpected events that could impact the success of your project. Brainstorm with stakeholders and team members to identify as many potential risks as possible.
- Assess the Impact: Once you have identified potential risks, assess each risk’s potential impact. This will help you prioritize risks and determine which ones require immediate attention.
- Develop Response Strategies: Based on your impact assessment, develop response strategies for each potential risk. This may involve developing alternative solutions or workarounds, identifying additional resources, or establishing clear communication protocols.
- Assign Responsibilities: Determine who will be responsible for executing the contingency plan if and when it is necessary. Assign specific roles and responsibilities to stakeholders or team members to ensure that everyone knows what they’ll need to do.
- Establish Communication Protocols: Establish clear communication protocols so that team members and stakeholders know how to report potential risks or unexpected events and receive updates on the status of the contingency plan.
- Test and Refine Your Plan: Test the contingency plan periodically to ensure that it works effectively. Make adjustments as needed.
- Document Your Plan: Document the contingency plan in a clear and concise manner and make it easily accessible to all relevant parties.
Keep in mind that a contingency plan is only effective if you regularly review and update it to reflect changing circumstances and new risks that may arise.
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What Is a Business Contingency Plan?
Small Business Contingency Plans Explained
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A business contingency plan is a course of action that will be taken if an unexpected event occurs that could disrupt the business. It's a backup plan that ensures the business can continue to operate despite an adverse event.
A business contingency plan is a “plan B” or blueprint for how to keep your business running in the event of a natural disaster, major technical issue, or other unforeseen disruption. A contingency plan identifies potential risks to your business and outlines steps your management team and employees can take if confronted with one of those risks. It helps protect the health and safety of your workers after an event has occurred, while also minimizing business interruptions that can result in financial losses. A well-thought-out plan can mean the difference between staying in business and shutting down.
- Alternate term : Continuity plan
Do You Need a Business Contingency Plan?
Every business should have a contingency plan so it can resume its operations as soon as possible after a disruptive event occurs.
A plan will save you time and money since you've already decided what resources you need and actions to take to keep your business going. It can also alleviate some of the stress you're likely to feel when disaster strikes.
Rather than fretting about what you should do, you can simply follow the steps you've laid out ahead of time.
How to Create a Business Contingency Plan
The first step in creating a contingency plan is to determine what risks are most likely to impact your business and the functions they will impact. Think about how your business normally operates and the types of events that could disrupt its major activities. Your risks depend on the nature of your business and your geographical location. For instance, hurricanes and earthquakes are risks in some areas but not others. Here are examples of events that could cause disruptions:
- Physical damage by fire, windstorm, or other peril to a building that your business occupies
- Damage to machinery or breakdown of equipment
- An extended utility outage (electricity, water, gas, or telecommunications)
- Resignation or extended absence of key employees
- Damage to your computer system or a data breach
- Interruption of your supply chain
- Blocked access to your business location
Some of these events could also have legal implications. For example, all 50 states, along with D.C. and U.S. territories, have laws requiring businesses to notify individuals whose personally identifiable information has been stolen or released in a data breach.
Run an Impact Analysis
The next step is to conduct a business impact analysis so you can predict the potential outcomes of a disruption of one of your business functions or processes. An analysis can help you estimate the operational and financial impacts of a disruption. It can also help you gather the information you will need to develop recovery strategies. Here are examples of the potential operational and financial impact from the disruption of business functions and processes:
- Lost or delayed sales or income
- Increased expenses, such as overtime, outsourcing, and expediting costs
- Regulatory fines
- Contractual penalties or loss of contractual bonuses
- Customer dissatisfaction or defection
- Delay of new business plans
When estimating the impact of events, be sure to consider timing and duration.
A hurricane, structure fire, or data breach may have a greater effect on your income or costs if it occurs during your busy season than when business is normally slow. Likewise, a disruption that lasts for a day will have less impact than one that extends for a week or a month.
You can use the results of your impact analysis to rank your risks in order of priority. Risks with the greatest potential impact should be listed first.
One of the easiest ways to write a contingency plan is to use a template, which is provided by several state and local websites including, for example, the one for Cambridge, Massachusetts .
Plan for Continuity
Once you've analyzed your risks and estimated their impacts, you can begin writing your contingency plan. You'll need a plan for each of the risks you've identified. For example, suppose your manufacturing business is highly dependent on a grinding machine. If the machine became inoperable due to physical damage or a malfunction, your business might have to shut down temporarily. You draft a contingency plan outlining steps you will follow if your machine becomes unusable. Your plan, in turn, might include contact information for two companies that rent machines similar to yours.
When writing your contingency plan, be sure to identify specific people who will need to take action. For instance, suppose your firm employs a highly-skilled salesperson named Susan, who generates 50% of your firm's sales. If Susan left your firm or was unable to work for an extended period, your sales would plummet. You know a retired salesperson (Jim) who could step in for Susan temporarily. However, before you include Jim in your plan, you should explain the roles and responsibilities you'd expect him to fulfill and obtain his consent.
Once you've completed your contingency plan, be sure to share it with your managers and staff who will be responsible for implementing it. Ask them for their feedback, as they may think of a potential risk or impact you didn't consider.
Contingency Plan Example
Here's an example of how a company might use a contingency plan.
Tom owns Tasty Treats, a manufacturer of frozen prepared meals. The firm generates 60% of its revenue from sales of frozen pizza, all of which is made at a central location. Tom worries that his business could be severely impacted if a catastrophe occurs at the pizza manufacturing facility and he's forced to shut it down. Tom thinks his biggest risks are fire, windstorm, equipment breakdown, and an extended power outage, and that all have a high probability of occurring. He drafts a detailed contingency plan. Here are the highlights.
Ready.gov. " Business Impact Analysis ." Accessed Jan. 28, 2021.
National Conference of State Legislatures. " Security Breach Notification Laws ." Accessed Jan. 28, 2021.
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