Most small businesses only find out they needed a business contingency plan on the day something goes wrong. The laptop dies with every invoice on it. You are flat on your back for two weeks with three jobs booked. Your biggest client emails to say they are taking the work in house. The supplier you rely on shuts its doors. And you realise, while it is happening, that there was never a plan B.
A business contingency plan for a small business does not need to be a binder. It is one page that answers four questions for each thing most likely to stop you working: what would stop you, what are the first two moves, who needs to know, and where is everything they will need. Write it once, keep it where someone you trust can find it, and look at it twice a year.
This guide covers how to tell whether you are running without a plan B, why so many good operators do, what it costs when the bad day arrives, how to write the one page this afternoon, what to do if the thing has already happened, and how to make the business less fragile so the page matters less. It is general guidance. Where insurance, contracts, money or your health are involved, a broker, an accountant, a lawyer or your doctor is worth calling, and they come up below where they matter.
Is this you?
- If you were ill for two weeks, nobody else could send an invoice, answer a client or tell anyone what was booked.
- Your invoices, quotes and client details live on one laptop or one phone, and you are not sure when it was last backed up.
- One client pays a large share of your bills, and you have not worked out how long you would last if they left.
- Only you know the passwords for the bank, the email and the software the business runs on.
- You have business insurance, but you could not say what it actually pays out for.
- Something has already gone wrong, and you are working it out as you go.
If the thing that went wrong is a mistake you made, our when things go wrong collection has a guide for that too. This piece is for the events that arrive from outside: illness, a lost device, a client leaving, a supplier failing, a month with no money in it.
Why it happens
Everything runs through one person
In a one or two person business, the owner is the salesperson, the worker, the bookkeeper and the only person who knows where anything is. That is efficient on a normal day. It also means the business has a single point of failure, and it is you. Nobody plans around themselves, because it feels like planning for something that will not happen.
Contingency planning sounds like big company paperwork
Search for a business continuity plan and you find templates written for organisations with a facilities team and an IT department. A sole trader reads twenty pages about evacuation drills and concludes, reasonably, that it is not for them. The useful part, which is a short list of what would hurt and what you would do first, gets thrown out with the rest.
Good months hide the risk
When work is steady, the fact that it all comes from one client, one supplier or one laptop does not feel like a risk. It feels like things are going well. The dependency only becomes visible on the day it breaks.
The thing that goes wrong is usually ordinary
Most plan B moments are not disasters. They are a broken phone, a dose of flu, a client's new finance director, a price rise from the one supplier who stocks what you need. Because each one feels small and unlikely on its own, none of them gets planned for, and together they are close to certain to happen at some point.
What it costs if nothing changes
The US government's Ready.gov guidance on business impact analysis lists the kinds of damage a disruption does, and they map closely onto a small business: lost sales and income, delayed sales or income, increased expenses, and customer dissatisfaction or defection.
Income stops before costs do. Rent, software, loan repayments and insurance keep going out while nothing is being billed. A week off with no plan is a week of costs and no invoices, and the invoices you do send go out late, so the money arrives later still.
One lost client can be most of the business. This is more common than most owners assume. In 45% of small businesses, one client accounts for half or more of a year's billing (58 businesses). For any of those businesses, plan B is not a nice to have: it is the difference between a bad quarter and closing.
Source: Billbooks invoice data, 8,483 invoices from 112 small businesses, September 2024 to September 2026 (aggregate only, figures shown only where 25+ businesses contribute). See the study.
Clients go quiet when you do. A client who hears nothing for a week assumes the worst and starts looking elsewhere. The same client, told on day one that you are ill and when you expect to be back, usually waits.
Insurance may not cover what you think. The UK Financial Ombudsman Service describes business interruption insurance as cover for loss of income suffered by a business because it has had to close or restrict its activities due to certain events. The phrase that matters is certain events. Which events count depends entirely on your policy wording, and finding that out after the fact is the worst time to learn it.
And it costs you. Scrambling through a crisis with no plan is exhausting, and the decisions you make in the first panicked days are the ones you are most likely to regret. A page written on a calm afternoon does some of that thinking for you in advance.
How to write a one-page contingency plan this afternoon
You need a sheet of paper or a single document, about an hour, and your bank and software logins to hand. Work through these in order.
1. Name the five things most likely to stop you
Do not try to plan for everything. For most small businesses the list looks something like this:
- You cannot work for two weeks or more, through illness, injury or a family emergency.
- You lose your records: a laptop or phone is lost, stolen, broken or locked by ransomware.
- Your biggest client leaves, or stops paying.
- A key supplier or tool fails: the supplier closes, the software you rely on changes its price or shuts down, the van is off the road.
- Cash runs short: a slow month, a large unexpected bill, or several clients paying late at once.
Swap any of these for something more likely in your trade. A café might put a freezer failure or a road closure on the list. A designer might put losing access to their main software account.
2. Write the first two moves for each
Not a full plan, just the first two things you would do. For example, if you cannot work: one, message every client with a booked job and give them a realistic date; two, send invoices for any finished work so money keeps coming in. If you lose your laptop: one, change the passwords for email and banking from another device; two, restore from your backup. The point is that on the bad day you are reading, not thinking.
3. Write down who needs to know, and who can help
List the clients with live work, your main suppliers, your accountant, your insurer or broker, and your bank's business line. Then name one person you trust who could step in for the basics: a partner, a family member, a fellow tradesperson or freelancer you would do the same for. Agree it with them now, not on the day.
4. Write down where everything is
This is the part most owners skip, and it is the part that makes the page useful to anyone but you. Where are the client list, the open quotes, the unpaid invoices and the contracts? Which bank, which accounting or invoicing tool, which email? How would your trusted person get in? A password manager with an emergency access feature is one tidy answer. A sealed note with your accountant or a family member is another. Do not put the passwords on the page itself.
5. Make sure the records exist somewhere other than your laptop
The UK National Cyber Security Centre advises small organisations to make a backup of the data your business needs to operate, which it says could include your website, emails, invoicing, documents, contacts and customer information. It also advises checking that you know how to restore a backup and that it contains all your important data. The US Small Business Administration's emergency guidance makes the same point plainly: regularly back up data on all your computers. A backup you have never restored from is a hope, not a plan, so try restoring one file this week.
6. Know how many weeks your cash would last
Add up what the business must pay every month whether or not you work: rent, loan repayments, insurance, software, your own minimum drawings. Divide the cash you can reach by that figure. That is your runway, and it tells you how long every other line on this page has to work. If the answer is under a month, building it up is the first job on the list.
Find out how many weeks you could last
Put your cash and your fixed monthly costs into the Burn Rate Calculator. It shows how long the money lasts if income stopped today, which is the number your whole plan B hangs on.
7. Read your insurance policy once
Find the policy and check three things: whether it includes business interruption cover at all, which events trigger it, and whether there is any cover if you personally cannot work. If you cannot tell from the wording, ask your broker or insurer in writing and keep the answer with the plan. They will tell you what you have; whether you need more is a conversation worth having with them or with your accountant.
What the page looks like
An illustrative example for a one-person bookkeeping or design business might read:
- I am ill for 2+ weeks. 1. Text the five clients with live work (list on the back). 2. Ask Sam to send invoices for finished jobs from the invoicing app. Sam has the emergency login.
- Laptop lost or locked. 1. Change email and bank passwords from my phone. 2. Restore from the cloud backup onto the spare laptop.
- Biggest client leaves. 1. Invoice everything owed to date the same day. 2. Contact the three past clients on the list who said they would have more work.
- Main software or supplier fails. 1. Export the data monthly so I am never locked in. 2. Second supplier: name and number on the back.
- Cash short. 1. Chase every overdue invoice this week. 2. Pause the costs marked with a star.
- Runway: 7 weeks at today's balance. Insurance: broker's name, policy number, what it covers in one line.
Print it, save it somewhere you can reach from your phone, and tell your trusted person where it is.
If it has already happened
If you are reading this in the middle of it, the page above is still useful, but do these first.
Tell people early, and give a date. Contact every client with live work today. Say what has happened in one line, what it means for their job, and when you will next be in touch. You do not need to share details about your health or your finances. Clients deal far better with a delay they were told about than with silence.
Keep the money moving. Invoice any finished or part-finished work now, rather than waiting until you are back to normal. Chase what is already owed. Money arriving buys you time for everything else.
Protect the cash you have. List every payment due in the next 30 days. Pause what can be paused, and if you cannot meet something, call the supplier, landlord or lender before the due date rather than after. A conversation before a missed payment is very different from one after it.
Call your insurer early. If there is any chance the event is covered, tell your insurer or broker now. Policies often have notification rules, so read yours or ask, and keep records of costs and lost work from day one.
Use a temporary workaround, not a permanent decision. Borrow a laptop, ask a fellow freelancer to cover a job, rent the van. In the first week, avoid permanent moves such as cutting your prices, signing a long contract or closing the business. Make those decisions once the dust has settled and, where the money is serious, after talking to your accountant.
Look after yourself. If the thing that happened is your own health, recovering is the plan. If the stress of it is affecting your sleep or your health, talking to your doctor is a practical step, not an indulgence.
How to stop needing plan B so often
A plan helps on the bad day. These make the bad day less likely, or smaller when it comes.
- Review the page twice a year. Put a reminder in your calendar. Clients change, passwords change, the backup drive you mentioned may be in a drawer somewhere.
- Reduce the single points of failure. A second regular client, a second supplier for anything you cannot work without, a second person who knows how to send an invoice. Each one turns a crisis into an inconvenience.
- Build the runway slowly. A fixed amount set aside from every payment that comes in, however small, adds up faster than waiting for a good month. Our guide to creating a business budget covers how to find the room.
- Keep records somewhere a lost laptop cannot take them. A spreadsheet saved to cloud storage does this. So does any online accounting or invoicing tool. If your invoices and client list are still on one machine, Billbooks keeps them online and on the mobile app, so a dead laptop does not stop you invoicing the same afternoon, and a trusted person can be given their own login. Whichever tool you use, check you can export your data from it.
- Know your insurance. Keep the one-line summary of what your policy covers on the page, and revisit it when the business changes. The guide to insurance for freelancers is a starting point for the conversation with a broker.
Two free checks to run before anything goes wrong
Frequently asked questions
What is a business contingency plan?
A business contingency plan is a short written plan for what you will do if something stops the business working, such as illness, a lost laptop, a client leaving or a supplier failing. For a small business it can be one page: the events most likely to hurt, the first two moves for each, who needs to know, and where everything is.
How do I write a contingency plan for a small business?
List the five things most likely to stop you working. For each, write the first two things you would do. Add the people who need to know and one trusted person who could step in, note where your records and logins are kept, check your backups and your cash runway, and read your insurance policy once. Review it twice a year.
What is the difference between a contingency plan and a business continuity plan?
The terms overlap. A business continuity plan usually describes how an organisation keeps running through any disruption and is often long and formal. A contingency plan is usually narrower: what you will do if a specific thing happens. For a one or two person business, a one-page contingency plan covers most of what a continuity plan would.
What should I do if I am too ill to work and run the business alone?
Tell every client with live work as early as you can, with a realistic date. Ask someone you trust to send invoices for finished work so money keeps arriving. Pause any costs you can, call your insurer if your policy may cover it, and make your recovery the priority. Agreeing a trusted person in advance makes this far easier.
Does business interruption insurance cover me if I cannot work?
It depends on your policy. Business interruption cover pays for lost income when the business has to close or restrict its activities because of certain events, and which events count is set by the policy wording. Many policies are built around damage to premises, so ask your broker or insurer in writing what is and is not covered.
How much cash should a small business keep for emergencies?
There is no single right figure. Work out your runway: the cash you can reach divided by the costs you must pay every month whether or not you work. Decide with your accountant how many months suits your business, then build it gradually by setting aside a fixed amount from every payment.
How often should I update a contingency plan?
Twice a year, and whenever something big changes, such as a new main client, a new supplier, a move or a new member of staff. Check that the contacts, the logins, the backup and the runway figure are still right.
The one thing to do today
Write down the five things most likely to stop your business, and next to each one the first move you would make. That is half the plan, and it takes fifteen minutes. Then tell one person you trust that the page exists and where to find it.
This is one of the problems in our when things go wrong collection, alongside the other problems that tend to arrive without warning.
