A Contingency Plan? Don’t tell us that you’ve never heard of any such thing, because it is always there. It is a plan that you have on top of all the plans about upcoming challenges and projects. It is the plan of the plans: the Plan B. You have it up your sleeves in case your Plan A fails you. This is the plan that you make in case your major plans and designs fail and it helps you take an evasive maneuver and go back to what you intended to get. Advantages of contingency planning cannot be stressed at enough, but here is an example of how not having a contingency plan fails a man.
Adolf Hitler prepared for the Russian invasion after he was done occupying most of the Europe. His plans were perfect and his army’s morale was at its highest, but he did not have a contingency plan for winter in Russia. As a result, Russians managed to devastate the German forces after winter had a ball with them. So, it is needless to say that importance of contingency plans for emergency cases are of paramount importance. This post will shed light on the importance and benefits of contingency planning.
1. Minimum Losses
From war field to corporate world, the importance of business contingency plan goes without saying. Having a contingency plan means maximum chances to success and minimum losses. Why? Because importance of contingency plan in strategy evaluation is that of a backbone in a human body. It strategizes all the possible challenges, gains and losses and thus prepares you to tackle challenges, get the most out of the benefits and evade the losses.
2. No Stress, No Panic
When you get a view of everything which is likely to happen on your way to success, you increase your chances to victory, you get a hold of yourself and you surely save yourself from embarrassment, panic and stress. The contingency planning process is all about giving you a 3D view (not literally) of what might happen in future and thus it shows you all the bumps in the road. All you have to do is slow down and avoid a shock.
3. Anticipation of Risks
No doubt that profit is the bottom line of every business, but a business is not all about profit. There are setbacks, there are losses and bankruptcy etc. You cannot afford to go bankrupt instead of becoming a millionaire. This is why you need a solid and applicablebusiness contingency plan. It anticipates all the risks for you and let you see the possible setbacks. Thus a business contingency plan is a must for you if you are about to get into a business.
4. Acing the Negotiation & Mitigation Skills
A businessman is always a considerably social person. You have to talk to a lot of people. Clients, prospects, partners, investors and obviously managers and employees etc. This is why you need to ace the art of negotiation and mitigation. A contingency plan in project managementis obviously not a negation and mitigation course, but it puts you in a position to foresee the events and thus you can anticipate the way your customers, prospects, partners, investors and rivals will react to certain business strategies that you make, and you can ace the negotiation and mitigation skills to counter their attack and make you win the mental hunger games.
5. Finding Better Opportunities
While it is not very easy to shift from one business strategy to another, and try to find new opportunities, the ability to foresee the future allows you to drop a flawed opportunity and try another opportunity that affords you better chances to success. Different types of contingency plans make it easy for you to find better opportunities and shift from one to another.
6. Comprehensive Business Plan
A good business plan accompanied with a good business contingency plan allows you to be very meaningful, comprehensive and yet come up with a concise idea. When you apply a business contingency plan, you evaluate all the risks involved, foresee all the possible situations and thus get the bigger picture. As a result, they become more and more comprehensive and they develop a better understanding of what might happen if Plan A fails.
7. Increased Strategic Mobility
One of the advantages of contingency planning is that you finally be able to mobilize your business strategies and move from one to another with speed. Since you have already anticipated the outcomes and consequences, you can always decide as to which one is better than the other and adopt the better business strategy before the implementation. This means, little to no surprises, challenges, risks and losses.
8. Fairly Unfair Advantage
A business contingency plan is not a secret. Also, you do not have to be a London School of Economic graduate to know this simple business concept. However, there are many people who prefer ambition and passion to proper care and preparation. They are vulnerable to the unexpected outcomes, while you are fully prepared for them. This gives you a “fairly unfair advantage” over your competitors and thus you can accomplish what they cannot. Sooner than later, you will be leading the niche and not them. A good example of such advantage is those American financial geniuses who foresaw the collapse of real estate market and loans, and who made a fortune out of it.
9. Increase in Capacity to Bounce Back
Remember, contingency plans are not there to not let the financial losses happen or risks occur, a business contingency plan is actually there because you want to increase your stamina and the ability to face the blow and bounce back. This will make it easy for you to plan more wisely next time and decrease the chances of a financial knockdown. Once you get this capacity, your ongoing business career will certainly sustain big or small losses, challenges and risks. This is another advantage that you will enjoy over your business rivals.
10. Proactive Nature
Importance of contingency planning is not only confined to sustaining a loss, or evading it. It is actually way beyond it. It is the whole shebang that you need to be a successful businessman. Why? Because contingency planning process tunes up your thinking and planning process. It makes you a person of plans as well as acts. It makes you a person who will act proactively based on the very clear insight and foreseeing, and thus it will make you a proactive business man. A proactive businessman keeps initiative in his hands and because of business contingency planning they are prepared to face the challenges and risks, and level them to the ground.
You must’ve heard that saying, “better safe than sorry”; if you got to put business contingency planning in a nutshell, it is actually being safe and prepared for what is coming next. This is a quality which may lead anyone to the success in their niche: even domination.A business contingency plan can be a solo show, but it gives better results if you have advisors and team of experts top advise you as to how the possible challenges can be tackled and risks can be avoided. We wish you best of luck with your business contingency planning.