Step 7 – Contingency Plan
The seventh, and last, chapter/section in the business plan is the contingency plan section (or the “what if?”). Since very few plans happen exactly as planned, and to demonstrate good planning acumen assuming a question like: “What will you do if you do not make the plan?” – from anyone who reviews the business plan, you need to contemplate the two obvious scenario’s:
- What will we do if business is “better than” planned?
- What will we do if business is “worse than” planned?
This then anticipates that the management team has developed Key Performance Indicators (KPI’s) that can be tracked every month. KPI’s being those 6 or 7 key indicators of business health for any business.
These KPI’s should have “trigger points” where it is obvious that the business is doing either “better than” or “worse than” the volumes in the best case scenario contained in the business plan. Reaching these trigger points should indicate that it is time to implement one of the predetermined contingency plans outlined in this section of the business plan.
Tracking these KPI’s in combination with the review of progress against the quarterly strategic milestones in the strategy section, the management team has a proactive methodology for maintaining control over the business.
Once developed in the way in which advocated in the plan-for-planning process, any management team can easily create a winning business plan.