Question

Why is it important for a company to have contingency plans.

Please don't hand write.

Thank you.

Answer 1

Contingency plans

It is the plan which is devised for an unexpected outcome. These are the backup plans which the company's make for an unanticipated situation. Contingency plan purpose is to safeguard the important data and for safety of everyone.

It is important for a company to build contingency plans because-

1) For better flexibility

Contingency plans help the company to be more flexible and empower the company to face any unforeseen situation which may occur in the near future. With the help of contingency plan, the company will be able to face with any difficulties head on.

2) It helps in preventing panic

If any unexpected situation occurs with your company and there are no plans made on how to tackle it, then the company will be in panic. But with the help of contingency plan, the panic can be prevented as a quick plan exists to handle the situation.

3) It helps in minimizing losses

If the company faces any disturbance, the contingency plan helps to minimize losses in the production and sales department, as the plans are already made on how to get the company back in its position.

4) It improves peace of mind

When you know that you have a contingency plan and you can handle any unforeseen situation in the future, then you can focus more on your current work. You can easily move the company forward and not fretting over.