Contingency means 'factors in the future that could happen but the chances of it are out of our control' and contingency planning means putting safe guards in place to make provisions for such occurrences. Some people refer to this as a Business continuation plan.
An example of this might be:
- The internet for your whole area goes off-line and you are an internet based business.
- Your supplier of retail goods goes bust and you can't fulfil hundreds of customers orders
- Or even an environmental disaster.
The contingency factors that affect planning would mean that any planning that the company undertakes, need to take into occurrences that might result in needing to consult the contingency plan.
Things to take into account when planning for change in a business are:
- Which parts of your business MUST be staffed/keep running as a priority in a disaster
- Degree of environmental certainty, this can be given a percentage of risk or a mark out of 10.
- Length of future commitments, do you have contracts and commitments that you would have to contractually fulfil even in the case of a disaster or emergency.
If you take all of these contingency factors into account when making any business decision, it is likely that there are some that will carry too much risk to go ahead with, meaning that contingency factors can greatly affect planning.