Why a business must possess a contingency plan.

[Axis]

A business organization is not beyond unforeseen occurrences which of course could bring negative result and devastating negative effects or impacts. However because of this it is advice that a business owner of business manager make sure to possess what is known as a contingency plan for his or her business as it will help him or her in times when the business is faced with unforeseen occurrences especially when the results are negative.

Contingency plan involves the allocation of money for contingency purposes, occurrences which may constitute what a contingency plan is meant to handle include disaster strike, sudden economic instability, sudden increase in cost of production, and sudden decrease in standard of living.

 

[Mikes smithen]

For the purpose of handling unforeseen occurrences it is absolutely necessary that a business possess a contingency fund account. However it is important that the contingency fund account should be a separate account differently totally from the business main account of depositing revenue realize. It is absolutely important and necessary that a business possess a contingency fund account because unforseen occurrences can occur anytime, so it is better for them to be highly prepared. When profit are realized a reasonable amount of money from the business profits being realized must be allocated for contingency fund savings.