Seven factors to include in covid-19 business contingency plans

11 May 2020 3 min. read
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Having a business contingency plan in place, combined with responsive risk management, is crucial for businesses to successfully navigate the covid-19 induced turbulent times ahead. Experts at professional services firm BDO outline seven areas that should be included in any business contingency plan.

Due to the pandemic panic, migrant workers have left their places of work and have returned / are returning to their homes. This has resulted in a massive manpower crunch for businesses, mainly in manufacturing, logistics and real estate sectors. Such businesses would need to find a way to substitute or replace critical work force to ensure business continuity. 

Service sectors including retail, airlines, hospitality, are anticipating a sharp decline in demand and may need to cut down their workforce to stay afloat. However, with the government issuing advisory and directions, including requesting employers to abstain from laying off employees, these businesses would need to assess the impact on their cash flows. 

Supply chains
Recovery of business operations may be dependent on a vast network of suppliers and vendors. There is a possibility that these vendors may be facing financial challenges of their own and may not be able to continue operations. Further, where suppliers are located across the country, such procurement may be challenging. In such situations, businesses need to find ways to mend the broken links in their supply chains.

Business contingency plan

Renegotiation of business contracts
Businesses may find it impossible to perform their contractual obligations. In such cases, businesses should consider implementing the Force Majeure clause in their contracts, to de-risk their business operations and protect themselves against any legal damages that may be lodged due to failure in complying with contractual obligations.

Government relief
While analysing the process changes that can be made to ensure business continuity, businesses should identify areas that would require regulatory clearances/approvals and reach out to the government authorities to seek relief, wherever possible. Businesses could also consider submitting representations to the government seeking additional subsidies, deferral schemes, export incentives and concessions for sale in specific geographies.

Insurance coverage
Many businesses in the manufacturing and process industries, may suffer equipment damages due to non-usage for extensive periods, which would result in a further loss of business. There may also be businesses that will face damages, due to the inability to use raw materials or sell finished products, that have a short shelf life. In these situations, businesses should review insurance policies for business disruptions and stock loss coverage. 

IT recovery
With the adoption of work from home policies, cybersecurity is a growing issue. In such situations, businesses should identify likely attacks as a result of more employees working from home and prioritise the protection of their sensitive information and critical applications. 

Fund raising strategies
Businesses would need to evaluate their funding strategies and needs, keeping in mind the changes to their longterm growth plans. Re-negotiating debt repayment obligations would be advisable and would provide immediate financial relief to the business. 


The contingency plan prepared should be periodically tested and tweaked, to ensure that the solutions for various scenarios are workable. The planning strategy should be responsive and malleable to accommodate any ensuing situational changes and varying government policies and protocols.