Contingency Plans: What They Are & Why Your Spirit Box Team Needs One ASAP
By: Aria Spears
Contingency Plans: What They Are & Why Your Spirit Box Team Needs One ASAP
A contingency plan might not be the first thing you think of when it comes to Spirit Box planning for the school year, but that doesn’t mean it isn’t critical. What are contingency plans? Why does your team need one? Keep reading to learn more!
What is a contingency plan?
A contingency plan, sometimes known as a continuity plan, is a set of structured actions and procedures a company pre-defines in order to respond effectively to a crisis or unexpected event. It helps to minimize risks and negative impacts in the case of events that disrupt regular business operations. It includes many different components which are discussed below.
Contingency plans promote an efficient response.
Why is a contingency plan needed? Business contingency plans help to maintain operations so the business can still function and generate profit in a crisis (when possible). It helps a business remain sustainable in both the short and long term. You never know when a crisis or business disruption will hit, so it is critical to create a plan now.
Overall, business contingency and continuity planning can:
Reduce the loss of business assets
Save lives through crisis communication
Help speed up recovery
Examples of contingency planning
COVID-19 is a prime example of why contingency planning is so important. Many businesses had to switch to remote operations quickly, many restaurants had to become to-go only establishments, and online retailers experienced higher-than-usual demand while facing supply shortages. COVID presented many different unexpected events to which businesses (including Spirit Box teams!) had to adapt. These businesses had vendors, lease payments and employees to pay. A contingency plan helped many get things done more quickly and efficiently.
Another example would be an unexpected weather event. If the city in which the business is located has flooding, an ice storm, a wildfire or other events, it will be critical to enact a plan to help take care of employees and also save business assets.
You never know when your school or Spirit Box will encounter unexpected events or crises. If you work ahead of time to create your contingency plans, you are more likely to be able to continue operations even when unexpected events occur.
The core components depend on the business & risks.
The components you use for your contingency plan(s) depend on the kind of business. It will also depend on the kind of event you are planning for: a natural disaster will be different than something like COVID-19. Below you will find some of the primary components, but there are additional factors you could include.
Risk Assessment - Determine what risks could cause the greatest impact on the business. These could be physical, such as a pipe breaking during a freeze or the freezers going down in the loss of power. It could also entail the possibility of a server or site crashing due to high online traffic. You can find business preparedness checklists for different types of weather events.
Communications Plan - Develop a clear and focused plan for how you will communicate these risks to key stakeholders: employees, the board, vendors, customers and others affected. The messages should be clear, timely, and provide information from crisis through recovery.
Supply Chain Preparation - It is important to consider backup suppliers if your primary supply chain breaks down at one point or another. Preparing these ahead of time can ensure continuity of operations.
Insurance - It is important to consider your insurance coverage for the risks associated with your business. Does your current insurance offer enough coverage for the identified risks?
Data Protection - Ensure your data from across the business is backed up in the cloud and thus protected from physical damage to computers, hard drives, etc.
Recovery Strategies - For each identified risk, consider a few different recovery strategies you could take to resume business operations. Perhaps it is a backup generator for loss of power, a currently off-shelf product you could activate quickly to bring in additional revenue, or a remote-work plan for employees.
There are many other elements to a successful contingency plan. Once a business has a plan in place, it is imperative that the plan be tested and updated regularly to identify and resolve any gaps.
How can you make plans for your Spirit Box?
Making a contingency plan for your Spirit Box will entail you and your team can continue operations, even if your school returns to solely remote learning such as in COVID times. You could also consider what to do if your school experiences loss of power for a day or more. Questions to consider:
What will you do with perishable inventory in the case of power outages?
How will you manage vendor payments if the school goes remote for a time?
Are there other services your team can offer to generate revenue while the Spirit Box is down?
When could the Spirit Box extend hours to make up for lost revenue? (Football camp during the summer, teacher work weeks, holiday breaks, etc.)
Who will take the lead on the team if the adviser and/or team leader(s) move or are out of commission for a time?
What happens if a key vendor goes out of business or is no longer able to service your school?
These are a few questions your team can ask to start creating a contingency/continuity plan for unexpected events.
Want to learn more? Check out this additional Spirit Box blog post about contingency planning.
Spirit Box is so much more than a vending machine. It is a turn-key start-up that delivers real-world business experience to students before they even graduate. With a comprehensive curriculum, live and ongoing support and plentiful teacher resources, it alleviates many common challenges of school stores. Contact us with your questions!
Additional Resources
U.S. Small Business Administration (SBA): "Prepare for Emergencies: Contingency Planning for Small Businesses" (https://www.sba.gov/business-guide/manage-your-business/prepare-emergencies)
Ready.gov: "Business Continuity Planning Suite" (https://www.ready.gov/business-continuity-planning-suite)
The Hartford: "Business Continuity Planning” https://www.thehartford.com/small-business-insurance/business-continuity-planning
FEMA: "Ready Business" (https://www.ready.gov/business)
The Business Continuity Institute (BCI). (2020). Good Practice Guidelines 2018 Edition. BCI. Link to PDF