Page 18 - Growth and Contingency Planning Toolkit

GROWTH & CONTINGENCY PLANNING GROWTH & CONTINGENCY PLANNING

1. It makes planning easier. your planning procedure, you ensure that you are always prepared to respond to crises and miti-

2. You have better control over your profits. gate the damage from everything from small problems to worst-case scenarios.”
3. It enables you to plan your materials and purchases more accurately.
4. Clearer indication as to how many people you need to employ.

Bonus! If you appear to have control of your business, it gives comfort to your
employees, your board, your shareholders, and the financial and stock market institutions.

Items to Cover Before Activating Your Contingency Plan:

1. The market research should be complete.
2. You know what the customer would buy.
3. Processes are designed and tested, software written, and materials sourced and priced.
4. You’ve determined distribution channels and how you plan to go market.

5. Pilot runs initiated, costs understood, and pricing agreed. Initial marketing materials should be
discussed so they can be designed and executed quickly.

Keep in mind that contingency planning is not limited to designing new products and ser- Once supported by your overall business planning process, a rock-solid contingency plan helps
vices. It may be that some level of growth can be achieved through suitable acquisitions, expand- ensure growth and sustainability.
ing a current service, etc. We generally recommend that product and service innovation contin-
gencies are greater than or equal to 15% of your overall sales plan.

When Do You Activate Contingencies?

There are many situations in which a company should consider activating contingencies:
when revenue is likely to drop because of unexpected events in the marketplace, as a re-
sponse to sudden increases in customer demand or market opportunities, or as part of
the next year’s sales growth plan. If the growth targets can be achieved by expanding current lines
of simply selling more, you may not need to activate a contingency the entire year.

Don’t forget, when one or more of the contingencies are activated, another one needs to take its
place on the list. In fact, the Contingency Plan is a “living document” that is revised and updated on
at least a quarterly basis and consists of a list of fully developed projects, projects in development,
and a list of ideas for consideration. These ideas show the Board of Directors that people are
thinking beyond just the next 12-month period.

Now’s the time to make contingencies part of your standard operating procedure. If you don’t
have a well-developed program of contingencies in place you will almost certainly pay the price for
being unprepared!
As we say in our new book, Get in the Game, “By making contingency planning a regular part of

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