How Small Businesses Can Prepare for the Worst


According to renowned time management expert Alan Lakein, “Planning is bringing the future into the present so that you can do something about it now.” Few businesses could have predicted the global economic slowdown caused by the COVID-19 pandemic, which has threatened millions of jobs and ended 10 years of economic growth in a matter of weeks. Some businesses, however, were better prepared due to smart planning.

If you operate a construction business, you are likely familiar with many of the responsibilities and risks associated with owning a small business. Running a tightly knit crew can come with a lot of anxiety, because world events ripple through small companies faster than large corporations. The best way to reduce that anxiety is to develop a plan that identifies what you have, what can wait, and how to keep operating in the midst of a crisis.

Here are some ways small businesses can prepare for worst-case scenarios.

Make a Business Continuity Plan

A business continuity plan (BCP) is something many large corporations rely on to continue operations during a major economic disruption. Cyberattacks, regional conflicts that threaten supply chains, or prolonged worker strikes are all things BCPs can address. 

Forbes suggests that all small businesses should develop their own BCPs, should a global event (e.g., pandemic, natural disaster) or local event (e.g., sickness or death of a key employee, loss of a major client) threaten a company’s revenue stream.

Creating a BCP involves performing a thorough risk assessment, determining where your business is most vulnerable, identifying scenarios likely to occur, and identifying scenarios that would have greatest financial impact on your business. 

If you are a small construction business, you likely have some employees or subcontractors who are unable to work in a normal capacity due to health or travel restrictions. You may also have a limited number of employees who can perform certain tasks or access certain information and software programs.

A good BCP can help you answer questions like: what are ways your employees and subcontractors can continue to work under government orders or health restrictions? What would you do if any key people died or couldn’t work for a prolonged period of time? How would you continue to operate if certain hardware/software/equipment couldn’t be accessed and where would you get what you need? 

If you don’t have a BCP in place, start by talking to other businesses of similar size, supporting unions, or trade organizations, as they may already have a template. Make sure to review your plan with your employees twice a year and make adjustments when shortcomings are discovered.

Assess and Protect Your Resources

As part of your planning, you need to identify what you have (both in liquid cash and reserves), what your monthly expenditures are, and what business functions are essential. Are there certain software programs or licenses you aren’t using? Are there tasks being contracted out that can be brought in-house? Which business functions are vital to bringing in revenue, and which can be neglected in an emergency situation? It’s important to ask these questions so you know what you have and how it can be used effectively.

People are resources as well. While no one wants to think about cutting employees in times of crisis, hard decisions have to be made if it means keeping the business afloat. No one wants to work in an environment where they feel expendable, so have a plan to support employees if temporary or permanent cuts become a reality. Implement a communications plan that identifies useful resources for employees. Also, be sure to familiarize yourself with government programs and resources available through the U.S. Small Business Administration and other organizations.

As a matter of practice, make sure more than one employee has access to important files, and be sure to cross train employees so at least one person knows how to back up the key parts of someone’s job. Ensure all your files are organized properly and always make backups of important documents and files.

Understand Your Legal Obligations

It’s important to know your rights, so take the time to fully understand how state and local orders impact your ability to work. Some states have issued shelter-in-place orders that treat all construction operations as essential, while other states are only allowing construction related to affordable housing and infrastructure. To further add to the confusion, some local governments have issued orders that conflict with state guidance. 

In the event that a project owner or local official orders the suspension of work or tries to limit access to the worksite, carefully evaluate your company’s rights and responsibilities. Many jobs can be done as long as reasonable attempts are made to maintain worker safety and social distancing. Review your professional obligations under your local jurisdiction, as some may address working during emergency or pandemic conditions.

You also need to do a project-by-project assessment of your contractual obligations, including, but not limited to: termination and suspension rights; force majeure; notice requirements; change request requirements; entitlement to time extensions and cost increases; and other clauses related to emergencies and safety. An extended cessation of work may trigger lien filing deadlines, so it’s important to review and understand your state’s Mechanics’ Lien laws.

While it’s impossible to plan for every contingency, going through worst-case scenario planning will make your team more resilient and creative when it comes to solving problems. In challenging times, thorough planning can also bring teams closer together.


Leave A Reply