Business Advice: How to Plan for Possible Disasters


Things will go wrong if they can. It’s one of the unavoidable facts of life. Whilst we can’t change that, we can try and mitigate the effect of negative events through planning and preparation.

It’s not just about getting a good cashflow or obtaining business interruption insurance. There’s a little more to it than that.

This article will discuss just how to plan and prepare for the rainy days of business.

Do a Risk Analysis

The first step is to identify the potential risks. If you have a team, it helps, because more people mean greater understanding from different points of view. What, then are the types of risk you could face, in terms of broader categories?

Financial Crisis

There are two main types of financial crisis. One is where demand for the business product runs dry, or the company’s assets lose value.

The other occurs when there is unexpected expenditure, or the budget is exceeded for whatever reason. Perhaps the cost of source-materials goes up.

You need plans in place for both scenarios.

Personnel Crisis

This kind of event happens when an employee engages in unethical or illegal misconduct. The company’s reputation is at stake whether said misconduct occurs in the employee’s personal or professional life. Why? Because the common view is that the company’s ability to judge individuals accurately is suspect.

Organisational Crisis


This happens when a company wrongs its consumers or its employees. This can happen in one of three ways:

  • Deception: The company lies about its products or data to the public.
  • Management misconduct: The managers engage in illegal activities.
  • Skewed management values: Management values financial gain rather than social- or customer-responsibilities. This creates a negative organisational culture.

Time-related Crisis

If the client changes the deadline or the schedule overruns, you have negative impact in terms of:

  • Cost
  • Customer or client relationships
  • Reputation as a reliable company

Technological Crisis

Today, companies are highly reliant on technology to run and do tasks like keeping a website up to date. If the system crashes and you’re unable to be online, or if there is a malware attack or virus, it impacts your business strongly. It’ll affect your product or services, and your customers.

Natural Crisis

If your offices are suddenly impacted by extreme weather events such as flooding, you’ll be down for quite some time. Other natural disasters can occur which put your business at risk of losing operational power. Earthquakes, volcanic eruptions, and tsunamis need to be taken into account in areas where these events are prevalent.

Interpersonal Crisis


Conflict could erupt in the company, either between employees, or at senior management level. It could also be at the level of the public, if they have moral disagreements with what you’re doing. Either way, you can face mass resignations or public boycott.

It can even escalate to violence, where people lose their lives—for example from a disgruntled former employee who decides to attack people at work.

Crisis of Malevolence

A crisis of malevolence occurs where an opponent of the firm uses illegal means to destroy the firm or harm its reputation. They could tamper with the product, or hack into your system to gain confidential secrets.

Resource Crisis

Under resources, there are a number of factors to consider:

  • Staff, such as a top employee that suddenly quits.
  • You could suddenly run out of resources due to something as simple as theft.
  • Raw material supply could stop.
  • Your machines could break down.

Prioritise the Risks Based on Impact

It’s important not only to list what could go wrong, but also how much impact each crisis could have. You could chart the probability of a particular crisis, and cross-reference it with degree of impact. That is, high and low impact versus high and low probability. This will help with planning for each contingency, and how much priority you place on it.

For Each Possible Event, Create Contingency Plans

For every event listed above, you’ll need to create contingency plans.

There are steps you can take to mitigate and reduce risk ahead of time, and there are plans you can make should any of the events actually occur. For example, you can take out different types of business insurance ahead of time. And you could plan secure computer systems to prevent hacking.

You’ll need to determine what needs to be done to resume normal operations. Furthermore, it’s advisable to decide what each employee’s responsibilities will be in every emergency.

Communicate the Plan


Communicate your plan to your employees by means of diagrams, illustrations and instructions. It also needs to be updated regularly.


Business can go awry at any stage of the game. It’s up to you to keep your business going by planning for any emergencies.

You can’t stop disasters, but you can plan for them in order to survive and grow through challenging circumstances.