If you want your business to be more stable, more successful, and capable of better long-term growth, you need to create backups and contingencies. This must occur at the ground level, with supplementary testing and overlapping, redundant responsibilities, and at the high level, with thorough backup plans for the business’s long-term trajectory.
How can you create better backups and contingencies?
Types of Backups and Contingencies
There are many types of backups and contingencies that you'll need to consider for your business.
High-level strategic backups. High-level strategic backups are designed to keep the business intact and running smoothly in the face of a diversity of different types of threats. For example, what would your business do if a new competitor suddenly offered exactly the same products and services as you for a lower price? What would you do if a natural disaster wiped out your most important physical center of operation? What would you do if a new technology disrupted your industry and forced you to rapidly evolve? A good business owner has plans for all these situations and more, though many of them will have overlapping solutions.
Personnel and team dynamics. You may also need backups related to your personnel and team dynamics. What happens if your top sales superstar suddenly decides to start working for a competitor? What would you do if there was a collapse within a specific department, leaving a wealth of vacancies that are difficult to fill? What happens if your company falls on hard times and is forced to lay off a number of employees? Again, you should have plans in place for all these occasions and more.
Ground-level equipment and instruments. It's also important to consider backups at the ground level, for your pieces of equipment and instruments. For example, electrical transformers typically have a finite lifespan. Proper dissolved gas analysis testing can help you determine when a transformer is nearing the end of its life. However, this test isn’t perfectly reliable, the interpretation of results can be tricky, and of course, transformers can fail prematurely even long before you deploy this type of test. Do you have a plan in place for how to handle this type of equipment failure?
How to Create Better Backups and Contingencies in Your Business
Across all these categories and more, there are many strategies you can employ to create better backups and contingencies in your business:
Understand the circumstances. First, you need to understand the circumstances associated with any speculative point of failure or threat. Just how important is this unit to the overall function of your business, and what would happen if it disappeared entirely? Is there any way that you could find an immediate substitute? Is there a workaround that can allow you to function without it temporarily?
Speculate about failure points. You also need to think about specific types of failure points. One of your pieces of equipment may suddenly start behaving erratically due to an internal issue caused by wear and tear; this is much different than a piece of equipment that unexpectedly stops working entirely. Many failure points can be proactively prevented, so consider deploying measures to prevent these points of failure rather than simply responding to failures that have already happened.
Focus on minimum viable alternatives. In entrepreneurship, a minimum viable product is the simplest, most easily deployable version of a product that can still be sold on the open market. It's a concept that enables entrepreneurs to think and act quicker, generating revenue before all planned features have been developed. Similarly, in your backups and contingencies, you should be focusing on minimum viable alternatives. If something in your business breaks, fails, or otherwise goes away, what is the minimum replacement or system necessary to keep things running afterward? This will buy you time to come up with a better, more permanent solution later.
Create backups for your backups. It's not a bad idea to create backups for your backups as well. Your primary contingency may not work if the failure is severe enough or if you're dealing with a type of failure that you hadn't considered. For each possible scenario, you should have multiple feasible approaches.
Document the plan. All of your backups and contingency plans need to be formally documented. It's a way of solidifying your planning, as well as communicating that planning with others. If you're in a position that disallows you to respond directly, someone else can review the documentation and step in to replace you.
Automate what you can. Automation is beneficial to businesses for many reasons. It helps you save time, save money, and improve consistency. Accordingly, you should automate backups whenever possible; for example, you can make sure your backup generators kick on whenever the main electricity goes out.
Periodically review and update. Finally, be prepared to periodically review and update your backups and contingencies. Your business environment changes rapidly and significantly, so your initial plans may not be relevant indefinitely.
Hopefully, you'll never need to tap into these backups and contingencies. But even having them documented should give you greater peace of mind. There are risks and threats associated with every business, but a competent business owner who can recognize and plan for them is in a much better position to succeed in the long term than a counterpart who only responds to new developments reactively.
