Contingency Planning for Retailers and Hospitality Businesses

Business continuity management or contingency planning is about the management of risks which could damage your business temporarily or could result in its failure. These risks can arrive suddenly such as through a storm or burglary, be part of a gradually worsening situation such as unexpected long term road works outside your business or a number of things happening simultaneously. Risks can be managed if you a have a plan in place to cover short or long term difficulties.

What risks?

These can be part of an emergency situation, a natural disaster, a health and safety situation, a new law, a staff or general business issue such as a legal or financial one.

Why should I have a contingency plan?

The old expression, failure to plan is planning to fail, sums this up. Most businesses suffer at least one incident or a number of incidents that can affect their profile and profitability and in the higher risk incidents, businesses fail and small businesses are even more likely to fail. In preparing their plan some companies identify ways that they can improve their business anyway and by planning for the unexpected or occasional risk, you will be safeguarding your businesses future.

What specific risks should I plan for?

There will be numerous to consider in preparing for the expected and unexpected, so here are just a few examples-

  • Natural disaster such as floods, storm damage, subsidence
  • Utility issues such as power cuts, loss of water supply, gas leak,
  • Emergency such as fire, accident, burglary, evacuation due to a Police incident
  • External issues such as suppliers going bust, product recalls, bad publicity, road works blocking  access to your business
  • Equipment issues such as IT failure or a virus attack, essential equipment failure such as boilers, washing machine, cooker or dishwashers
  • Staff issues such as individual illness, a bug that affects all staff, a death or staff fraudulent activity
  • The final and probably important point is in the event of the owners illness or death

For some of these, actions can be taken in advance to counter the identified risks, such as fitting a power surge protector to IT equipment, having a battery attached to cash systems for temporary use, servicing equipment regularly or having good emergency call out contracts, installing a CCTV system, identifying good local temporary staff agencies, offering staff free flu jabs, having a secondary broadband supply, planning how you might operate from alternative premises etc

You may remember a few years back there was a petrol tanker driver strike and fuel rationing so emergency services and food suppliers were given preference. This meant people were going out less and supplies within businesses were affected so there was less to sell and businesses were adversely affected.

More recently there was a fire underground in London and businesses in the area were evacuated, initially they thought for a few hours, instead this went on for over a week.

A few years ago there was an outbreak of foot and mouth that affected farmers directly, but also caused American tourists to stop coming here, so businesses relying on tourism such as retail, restaurants and hotels were badly affected, and this went on for weeks.

If yourself as the owner were to fall ill or worse then would your business survive?

What should contingency planning look like?

The plan should contain a list of each risk that you have identified, what should be done and who should do it. It should also be listed in order of things to be addressed immediately, those to be done in the first 4 hours and 24 hours, and those that can be addressed up to a week later. You should include a list of contacts to be called for help or advice such as insurers, trades people, IT service providers, leaseholder, suppliers etc. You may also be part of a news story so you might need to decide who speaks to the press or in some cases, to have a solicitor to deal with any enquiries. It’s not all negative though, as some minor incidents can provide a positive way to promote your business.

So in summary-

  • Identify a list or risks that may affect your business
  • Identify ways to prevent or minimise the risk from processes and actions, to increasing insurance due to the identified risks etc
  • List actions to be taken when the risk appears and who is to undertake the actions
  • Communicate your plan to staff and have it at hand when emergency strikes
  • Keep a copy of the plan off site as you may not be able to access your premises
  • Review regularly, at least once a year

Unfortunately common sense is not so common, so you cannot rely on staff doing the best for the business in an emergency and also they might not feel empowered to do what’s required without specific instructions. Also insurance does not cover every eventuality and often there is a delay in paying out anyway so you might not recoup the full costs of an incident. Having a plan will help you deal with a crisis without damaging your company’s brand or reputation and will give your business a much greater chance of survival and keep your customers happy.

Whitepaper: Real Life Business Contingency Example

Request to receive this real life example contingency plan which focuses on what the business would do if the owner was sick or worse. It may seem a gloomy subject but its important to have the plan in place for the survival of the business.


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