Question

Objective: To provide you with an opportunity to implement, monitor and modify contingency plans as required to maintain financial objectives.

Case Study: Susie’s Sweet Shop

Susie’s Sweet Shop is a small retail shop on a busy road in the outer eastern suburbs of Melbourne. Operating since 2004, it has a commercial kitchen at the rear in which most of the sweets are produced. Some sweets are also brought in from a supplier in the UK. It is staffed by a team of 4 which includes 2 customer service staff and 2 confectionary chefs. The business is owned by Susie herself and whilst she no longer works in the store, she handles all the financial management, business planning and marketing.

Identify 3 contingencies that Susie should consider.

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Recently her supplier in the UK has emailed her to let her know that all prices will be going up by 3% next year.

How should Susie plan for this? How should she implement her contingency plans? How will she know if her plan is successful? What modifications might be needed?

(Minimum 200 words)

Answer 1

Contingency plan refers to defining the course of action to be followed if a disaster occurs, like the business suffers from significant losses, then step by step process required to restore the critical business function to normalcy

Here are list of Contingencies to consider

a. Identify and Prioritize business Resources- Not all business resources like employees, IT systems, physical assets are crucial day to day functioning of business operation.

Here Susie can consider following critical business resouces

commercial kitchen, Confectionary Chefs

b. Identify potential risks related to priority resources- in business following are some risks Purchasing- Key supplies goes ou of business Business facilities- Natural disaster like flood, hurricane strikes Staff- Staff leaves without notice, hire due to unexpected work order

Here Susie should consider risk of confectionary chefs leave her firm, natuaral disaster cuasing damage to commercial kitchen

c. Formulate strategies and techniques to minimize identified risks- in business delegate responsibility to employees for emergency situations. Planning for alternative soucre of credit taking right insurance for business facilities and protecting financial data from cyber attack etc

Here Susie should consider informing Confectionary Chef about their responsibility in case of emergency situations. Insure Commercial kitchen for mitigating natural disaster risk

Susie should consider finding alternative supplier locally for efficient pricing and increase Sweet sales

Susie should review regularly different business risk at different stages of business, update contingency plan accordingly and distribute this plan to all employees / managers for timely action and become sucessful in business