Contingency plan is: understanding, and how to make a good contingency plan

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Contingency plan is understanding and how to make a good contingency plan

Contingency plan is: understanding, and how to make a good contingency plan

Contingency plan is understanding and how to make a good contingency plan

Basically, the definition of Contingency Plan is a process in preparing companies in order to respond to some events that cannot be predicted. Reporting from Wikipedia, the Contingency Plan can also be used as another option if the expected results are not able to be realized, or commonly called Plan B.

Well, in this article, let’s learn together about contingency more in-depth and also about how to make it. The following is the explanation.

Contingency Plan is

Contingency plan should be owned by smart managers who realize that there will always be a risk that will hit its business. Without the Contingency Plan, the percentage to be able to complete a project will decrease or can fail miserably.

In most cases, the Contingency Plan was created to be able to respond to various negative events that were able to damage a business reputation. Simply put, the Contingency Plan is a proactive strategy compiled to be able to assess various events that might interfere with business operations.

As we already know together that uncertainty and uncertain market conditions are a big challenge that must be faced by all business people. But with the presence of contingency plans, every businessman will be able to face these bad events while remaining calm.

How to compile a good contingency plan

Before we discuss further about making Contingency Plan, you need to know the best ways to compile contingency plans. The following is the way.

  • Contingency Plan must be arranged simply. All languages ​​and instructions in it must be easily understood by every employee, staff, or anyone who relates in it.
  • Contingency plan is compiled for formally explained to all company divisions, and they must understand the importance of having contingency plan.

Steps in compiling contingency plans

To be able to compile a good contingency plan and be able to save the company’s business, there are several steps that must be taken. Some of these steps are:

1. Identification and prioritize resources

Do certain research in the company and arrange the entire list of crucial resources contained in the company, such as equipment, teams, facilities, etc. Afterwards, you will be able to prioritize which ones are more important and which are not important from the list.

To be able to help you compile the priority scale, there are some very useful tips for you, namely:

  • Try to focus on some critical conditions that you might have to face in the future. Give a value or scale from 1 to 10 for each estimate. In addition, you must also recognize the effect that will arise from these conditions.
  • After that, you can develop rankings to assess how often these conditions can occur in the future.
  • Focus on working on the highest score first. You can place the highest priority at the top.
  • Next, develop various scenarios for some of the highest rankings. You must create a realistic scenario for any risk that you can develop a more effective contingency plan. In this section, you can also determine the effects that might arise from an event.

After that, you can develop various gradations of scenarios from several similar scenarios, such as the best scenario to the worst.

2. Look for the most important risk

Try to be able to find out related to a complete assessment of events that might endanger the resources you have. Try also to analyze each team, division or department in it. If necessary, you can ask for more experienced consultant assistance

3. Create a draft contingency plan

If possible, try to write various draft contingency plans at each risk that you can identify. Try to start it from the top or from the most important to the continuity of your business.

Whatever the decision is planned, then the thought that supports behind it must be used as a step that must be realized to continue the normalization of your company.

In addition, make an emergency plan at any risks that might occur, to be able to explain the various steps you have to do, then there are some things you should consider, namely:

  • Time line

When you make contingency plan, try to see the contingency plan from the side of the time line. For example, whatever you have to do at the first hour when losing a data, how about the following days.

So, you must be able to schedule for each scenario related to physical, corporate and institutional vulnerabilities. Place different people to be able to realize the plans that have been made when there are unexpected conditions.

  • Communication

Try to determine anyone responsible for being able to communicate with all people on each existing scenario.

  • Staff needs

Communicate with every existing company department and have them to make a draft that contains all their needs when the scenario is run. Then, make the settings needed to be able to provide these needs.

  • Reduce the risk

For example, if at any time there is a natural disaster, you will be able to minimize various risks relating to adequate insurance companies. Whereas in minimizing the risk of data loss, you can save it safely in the cloud or in other data storage applications.

4. Disconnect what steps can be taken to re-run your business

For example, if at any time it turns out you have to face flooding, then determine what things you can do to be able to anticipate these events, both in terms of building infrastructure or in terms of empowerment of their environment.

In addition, you must also ensure the analysis of its impact on your business, so you can fulfill the entire company’s mission and can continue to run the company business even though there is undesirable conditions.

5. Share the draft plan

When you compile contingency plans, make sure that all individuals in your company have a copy of the contingency plan.

As good as any emergency plan that you are arranging, the plan will not be able to work optimally if you cannot communicate it well. For this reason, make sure each individual from your company is well aware of their respective roles.

If necessary, give training related to this. Later, it will be able to minimize panic when there is poor condition in the company.

6. Test the Contingency Plan

You can do cost-effective trials by doing testing at several stages. If it is proven that there is an area that is defective or contrary to the emergency plan of several other departments, you can change or reevaluate your contingency plan.

7. Simulate the plan

If you have made a good contingency plan and have spread it to all individuals in the company, then then you have to make sure the contingency plan can run well. You can confirm it by doing simulation.

8. Perform a review

How well the contingency plan that you make, you must be able to review or reevaluate it to be adjusted to the conditions that might occur. Like, when there are changes to the company’s structure, employees, technology, or other important resources. Do continuous contingency plan updates.

9. Save your contingency plan in a place that is easy to reach

There are a few tips that you can do for the Contingency Plan and also make sure your contingency plan is fine when a certain event occurs. Here are the tips:

  • Try not to keep contingency plans in digital form. If the electricity is in the company and you lose the data, then you will find it difficult to access it. For that, save the copy in the form of paper to guard.
  • Keep your contingency plan slain outside and inside the office. Make sure there are staff you can trust to be able to access the contingency plan when you do a particular business trip.
  • Save your contingency plan in a place that is indeed easy to access, safe from fires, or flooding though.


Based on the explanation above, we can take the conclusion that the Contingency Plan is a process in preparing the company in order to respond to several events that cannot be predicted.

Contingency plan is also often referred to as an emergency plan or plan B because it is used in the face of a certain scenario that cannot be predicted, such as natural disasters or other events.

Well, the contingency plan must be made on various business scales, whether it’s a big business or small business. So, business success can be achieved correctly. In addition, in the Contingency Plan you must also be able to prepare a mature financial plan with certain financial management so that your business can still move.

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