Contingency Planning
What is it?
Making replies ahead for numerous circumstances that might influence trade is called contingency planning. Even though undesirable actions perhaps arise in the mind at the outset, a worthy contingency plan should also address progressive proceedings that might interrupt processes - for example a big order.
Approach
There will be surprises in life, if you are unaware about what is going to happen tomorrow? To make you safe from these types of situation, a perfect contingency plan is required. A contingency plan is a course of action designed to help an individual/organization for responding effectively to a significant future events or situation that may or may not happen. Every now and then, contingency plans are also denoted as 'Plan B' because it can be used as an alternative for action if anticipated results fail to materialize. Moreover, it is a plan devised for an outcome other than in the usual (expected) plan. It is often used for risk management when an extraordinary risk would have catastrophic consequences.
Tips
- Keep aside a small portion of your earnings in liquid avenues to meet contingency requirement
- Liquid funds or the avenues where you can get your money back in a days time
- Calculate the lump sum amount or corpus required for emergency
- Let all the members know about this investment