When coming up with techniques for financial planning for their business, most business owners expect and plan for business growth, rather than planning for their businesses failing. This optimistic outlook is a great asset to have for a business owner, however, planning for growth without creating a financial contingency plan is not realistic.
When planning a financial contingency plan for your business, you must take into account all the unexpected circumstances which could negatively affect you. These circumstances could be anything from employees’ injuries, natural disasters, cyber attacks, fraud or equipment malfunction. All of these could severely impact your business, and so that’s why it’s essential to create a comprehensive plan, taking into account all possibilities.
You should assess the potential risks which are specific to your business. Some risks are easy to foresee, such as safety risks linked to a specific industry, or to some of your employees, such as employees with disabilities. In those cases, you should put in place some strategies to minimise the risks. For example, you could organise annual safety training for your employees, and ensure that your employees with disabilities are specifically catered to, especially in the case of fire danger.
Delegate responsibility to others
When managing a business, it can be easy to get caught up in day to day details and forget the bigger picture. The reality is that you are only one person, and if you try to manage all situations arising at the same time in your organisation, you will not be able to cope in case of emergency situations. It’s best to have a plan for assigning responsibilities to each of your employees in case of emergency, according to their strengths and abilities.
Review and update the process regularly
While creating a financial contingency plan is a great start to ensuring continued success, it’s necessary to revise it regularly, as economic shifts and work changes happen. Going over your plan every 6 months is a good idea to ensure it’s up to date.
If you would like help dealing with your business’ finances, get in touch with us, our accountants at the Kelvin Partnership will be glad to put their experience at your service.