A contingency plan doesn’t sound like what you would discuss with friends over cake and coffee, but it’s an essential part of any actual plans you make. You may need one (or more) for your business, school project, or even a family vacation. The biggest problem with making a contingency plan is that people often aren’t sure about what to include in it. Here is a handy guide for you to make a comprehensive one.
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What is a contingency plan?
A contingency plan is a set of actions that you will take when something unexpected happens. Think of it as a backup plan, or a Plan B. It should have instructions that you can follow when your original plan doesn’t work out due to changes in the situation.
A contingency plan prepares you to deal with any future troubles you may encounter, and gives you some sort of escape route out of any accident.
What happens if you don’t have a contingency plan?
If something goes wrong with your Plan A unexpectedly, or if accidents force you to change your current plan, chances are you will panic. Especially if you’re not well prepared to deal with contingencies, you probably can’t think straight enough to come up with the solution you need at that moment. You won’t know what to do.
What’s worse, until you’re able to get the situation under control, business can’t go back to normal. You’ll have to fix the trouble and make new plans.
What if the contingency plan is a bad one?
Don’t think making a contingency plan is a simple task. A contingency plan should be comprehensive, which requires lots of careful consideration. Otherwise, it is not helpful.
For instance, you may be prepared for the wrong kinds of accidents. And when your plan doesn’t work out as expected, you won’t be organized enough to handle the crisis. That is, you’ll panic.
How can a contingency plan benefit you?
For instance, a contingency plan allows you to deal with accidents quickly and effectively. In a business scenario, it can even help you save time and cost in repairing the situation.
Also, a contingency plan helps minimize the negative consequences or losses caused by the unexpected event. It guides you to start dealing with the situation as soon as something goes wrong and keeps you safe.
After all, having a contingency plan ready is reassuring, because you won’t have to worry about making new plans in a rush.
You may think that accidents are unlikely. You may think that your Plan A is perfect. However, you should keep in mind that the future is uncertain until it becomes the present, and that we as human beings can’t control 100% of what happens. You don’t want to regret not having a contingency plan when it’s too late!
How to write a good contingency plan?
There are basically 5 steps:
We’ll now go through them one by one:
As a contingency plan has to do with what’s unexpected, you have to first try and predict the risks:
- What could possibly go wrong?
- How likely it would go wrong?
- What’s the impact and consequences of the contingency?
- What should be your reaction or solution?
- How can you prepare for it in advance?
Using what you’ve written down in Step 1, rank your risks by their possible impact and likelihood. The more likely the risk will happen and the more serious the impact will be, the higher it should rank.
You have to decide how much weighting to put on each risk according to your situation.
The next step is to actually write your contingency plan. Keeping in mind the resources available to you, design solutions to the risks you want to cover in the plan. Be realistic about your needs: perhaps some issues have to be dealt with before some others, or perhaps you have to take actions within a certain time frame, etc.
It is also important to give clear and simple instructions, so that you won’t forget what you’ve written months later, or that someone will misunderstand them.
If your contingency plan involves other people, say, your colleagues or your family members, talk it through with them. Let them know what they’re supposed to do when certain things happen. Prepare them.
Then, if your plan includes actions to prepare for future accidents, execute them. This can help you lower the risks you may have while goal setting.
Changes happen all the time. For your contingency plan to be practical, you should review it and make adjustments regularly. Evaluate the items in your plan. Over time, some risks may become more or less likely, or may bring about different outcomes. Learn your situation well, and update your solutions accordingly.
If your plan is about large-scale risks such as natural disasters or server failures, conducting drills is very helpful to identifying any weaknesses of the plan, as well as making sure the people involved will be prepared to act according to the plan when they have to.
Some concrete examples to put things into perspective:
Example 1: Contingency plan for an outdoor exhibition
- Potential risk: Rain
- Who will be affected: Exhibitors, visitors, organizers and crew members
- Action 1: Secure exhibit items
- Who will take action: On-site crew members
- Preparation: Rain-proof covers for exhibitors’ stalls, email exhibitors with weather forecasts 3 days in advance
- Action 2: Lead visitors to sheltered areas
- Who will take action: On-site crew members, security guards
- Preparation: Mark designated areas as no-parking areas, waterproof jackets for crew
Example 2: Contingency plan for delivering a speech to a big group of audience (co-workers)
- Potential risk: The projector or the computer doesn’t work
- Who will be affected: Me
- Action: Write outline and key points on whiteboard as I speak
- Who will take action: Me
- Preparation: Notes in hard copy, 3 colored markers, printed handouts