Starting A Business Abroad: How To Create A Solid Contingency Plan

Posted on 13. Jan, 2010 by Emmanuelle Archer in Blog, Expat Life, Working Abroad
1 comment

We’ve already talked about contingency plans when discussing why you’re going to succeed and how to choose the right business structure. Today we’re going to go into further detail, so that by the end of this post, you’ll be able to easily create your own plan and never have to worry about it anymore.

Simply put, your contingency plan tells you what to do when things go wrong. It’s not about preventing things from going wrong – it’s about coming up with a strategy to deal with big bumps in the road, as efficiently and as painlessly as possible.

What to plan for

You want to plan for events that are concrete, life-changing, and relatively likely to happen.

Ask yourself, “What if happened? What would I do?” Jot down the steps you would take to deal with the situation, and keep this list somewhere safe, yet accessible (in case other people need to refer to it).

Start with what scares you most – we all have one thing that we’re almost irrationally worried about, be it getting ripped off by a business partner or becoming physically disabled. There’s nothing like a concrete plan to give you peace of mind, so address your biggest concern first, even if it’s unsettling to think about it.

There’s no such thing as a one-size-fits-all contingency plan. You know the risks you’re exposed to far better than I do. Generally speaking, though, there are a few broad categories that you may want to consider:

- Health concerns: What would happen if you got sick and were unable to work, either temporarily or permanently?

- Visa issues: Is there a possibility that your visa may not be renewed? If you’re an accompanying partner, could you lose your visa if your partner loses his or her job?

- Events beyond your control: Do you know what to do in case of a natural disaster? Depending on where you live, could political instability, general strikes or major construction and roadwork disrupt your business?

- Family issues: What if your parents need you back home due to an illness or accident? What will you do if your children or your partner are unable to cope with life abroad?

- Business issues: How would you cope with losing a key employee or business partner? What would happen should a customer sue you? Is your business overly dependent on a single client or supplier?

What not to plan for

Remember that you’re not planning for failure. If you develop a contingency plan around what happens if your business fails, you’re basically making it safe to fail. I don’t need to tell you what that does to your motivation and your drive to succeed.

I know some of us are more prone to worrying than others (hi, mom!), but don’t go overboard. You’re not writing the script for the next doomsday blockbuster movie, so please don’t waste time planning for events that are unlikely to happen – as scary as they might sound.

Only you know where to draw the line. Political unrest or armed conflict may be a possibility where you live, whereas it’s very unlikely to affect me here in Vancouver, BC. On the other hand, I live in an active seismic zone, so I do need to figure out what I’d do if a major earthquake were to hit the Pacific Northwest tomorrow.

So, yeah, it’s safe not to develop contingency plans in case of an alien invasion or vampire infestation – try to figure out how to market your products to them instead… 

How to create a useful, solid plan

You want to find a happy medium between half-baked strategies and obsessive planning.

Half-baked strategies are way too vague to be helpful. A perfect example is “Oh, if it doesn’t work out, I’ll just go back home.” You can see how this doesn’t get you any closer to having an actual plan. Too many key questions are left unanswered.

How long will it take you to wrap up your life in your home country? Will you need to sell your house, your car, your business? How will you go about it? How will you pay for your move? Once you’re back in your home country, where will you live? How will you earn a living?

You need to outline the critical steps and resources needed, and figure out how you would make it all happen if you had to. If you need to take concrete action, such as building up emergency savings or writing your living will, don’t procrastinate. Take care of it today, and get it out of the way.

Don’t try and plan everything down to the last detail, though. That’s just a waste of time. If an action step doesn’t require advance planning, leave it for when – or more accurately, if – you do need to worry about it.

Decide on a strategy, nail down the essential details, make a list that you keep in a safe place – and you’re done!

Give yourself a pat on the back and breathe a sigh of relief. Now that you’ve created a solid contingency plan, you can let go of your biggest fears, and go back to growing a successful business.

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Emmanuelle

Image by ArielAmanda via Flickr Creative Commons