When I was 23, I worked for a SaaS tech startup with big enterprise clients. We were a relatively young company and thought we were on top of things. Then, the ice storm hit. Power went out across the east coast for two days.

We weren't prepared, and our customers were counting on us to be there for them, power or not. We scrambled. This was a time before the cloud. We had to physically lift and move servers and computers. We had to figure out where and how to work. Being down wasn't an option.  It was miserable for all of us. All of my friends were sitting cozy at home enjoying a snow day, and me and my team were in an all out panic.

In that moment, I vowed to have a contingency plan at all times.

No matter how small your team, no matter how young your company, have a contingency plan.

How to Craft a Contingency Plan

A contingency plan, also referred to as a disaster recovery plan, is a set of steps, written down and communicated to all, that describe how you and your team will respond in case of a future, unforeseen, disaster or hardship.

The two primary objectives of a contingency plan are:

  1. Contain and minimize any loss

  2. Continue operations as close to 'normal' as possible

There's no black and white here. They key is to create a contingency plan early, communicate it to the entire company, and update it often (ideally annually). The four pillars of a good contingency plan are:

Pillar 1: Employee Safety

Regardless of how large a risk the business is in, employee safety must come first. Employees should know what to do in case of emergency, and know that their safety is your top priority. Share employee safety contingency planning with employees as part of onboarding so that they know it exists.  

Pillar 2: Communication Plan

In an emergency, chances are that you won't  be able to communicate normally. If power is out, and/or you can't get into the office, you'll have to figure out a way to communicate:

Set up a phone number and buy a landline phone that can operate without being plugged in. I've lived in New York for almost 20 years now, and I've had this phone the entire time. I've used it exactly twice. And exactly twice it was a lifesaver. I was able to be the centerpoint of communication with my team throughout power outages that lasted several days.

Also consider creating a phone list, with everyone's number on it. Share it digitally. Also, print it out and keep it at the homes of a few executives. Furthermore, encourage employees to have backup power sources for phones and technology whenever possible, both at their homes and at the office. These can be paid for by the company.

Pillar 3: Data Backup and Recovery Plan

Most companies have data. If data is key to your company's success, you likely already have a data backup and recovery plan. If you don't yet have one, now's a good time to put one in place.  There are simple, cost effective things you can do:

  • Buy insurance

  • Have a backup power source like a generator

  • Backup your data in the cloud, and backup your backup.

Pillar 4: Finances

No business should have all of its money in one account. As soon as feasibly possible, create at least two separate financial accounts for your business. In the second account, keep cash. It doesn't have to be a lot of cash, just enough to use in case of emergency. If you are tight on cash, put as much as you can into a second account, even if it's not as much as you would like.  

Talking Through "What If" Scenarios

Once you have your four pillars in place, round out your plan by thinking through the specifics of your business. You aren't going to be able to predict which disasters will hit and when. But, if you think through a few worst case scenarios, as unpleasant as this task is, you'll be better prepared.

Disaster or hardship can come in many forms, including:

  • Natural disasters (power outages, winter storms, floods)

  • Intentional malice

  • Financial

  • Legal

  • Employee

And, disaster can be short lived or long term. Go through these disaster categories, and any others you can think of. Brainstorm with your team, what would happen to your business? What's the worst case scenario? What can you to do to protect against the worst case scenario? The prevention mechanisms you come up with should be written into your contingency plan.

Now that you have your first iteration of your contingency plan, make sure it's written down and shared with all. And then, print out a handful of copies and ask key leaders to keep a printed copy at home. And finally, iterate. Every year, review your plan, update it as needed, reshare, and reprint.