Is your business prepared for the unexpected? Do you know how your business will respond when facing unexpected circumstances? By creating a business continuity plan, you’ll be better prepared to act and safeguard your business.
Running a small business is certainly no easy endeavour. According to a January 2021 article published by Entrepreneur, up to 20% of small businesses will fail within their first year of operations and 50% fail within five years.
While there is no simple, one-size-fits-all reason why small businesses have a higher early fail rate, it often comes down to issues from cash flow problems, leadership challenges and more importantly the ability for a small business to deal with issues that unexpectedly arise.
It’s easy for a small business to operate when everything is going in its favour, but how does your business respond when business circumstances suddenly change? For many small businesses not having this answer is a fast ticket to being part of the statistics mentioned earlier. The good news is that by building a Business Continuity Plan (BCP), you’ll have an ideal leadership tool to prepare yourself for the unexpected.
WHAT IS A BCP?
We often get asked what exactly a BCP entails and how to go about creating a business continuity plan. In essence, BCPs are a set of predetermined protocols and strategies that will define how your business will respond when facing a disaster or emergency. Another way to see a BCP is a collection of ‘backup plans’ that provide a roadmap to tell you exactly what to do when the worst happens.
Your BCP should encompass every aspect of your organisation, from how your tech department will remain operational, how human resources will provide the necessary assistance, to how your financial budget may be affected and reallocated when facing an emergency. One key factor when you develop business continuity plan, is its imperative to also contain a list of protocols that will help define how your business responds in the event of any of the following situations:
- Natural disasters
- Equipment Failures
- Financial or cash flow issues
- Man-made disasters
The goal when creating a business continuity plan is to ensure the high availability of the necessary resources, therefore ensuring that your business operations are minimally affected following an emergency.
You may have heard the saying, ‘those who fail to plan, plan to fail’. According to figures shared by IBM, infrastructure failures cost businesses an average of $100,000 per hour. Building a business continuity plan mitigates these costs by minimising the effects of these failures on your business.
THE FIVE STEPS FOR BUILDING A BUSINESS CONTINUITY PLAN
Now that you know how important it is to have an effective BCP, take the first step by following these simple steps.
STEP #1 – PERFORM RISK ASSESSMENTS
To start building your business continuity plan, you’ll want to start by curating a list of every possible risk that your business may face. Attempt to factor in what’s likely but also some worst-case scenarios. This list should include risks related to all of the following areas:
- Industry Factors
- Geographical Factors
- Trends and Market Movements
- Employees & Human Relations
- Business Infrastructure
Once you have completed your list, work through it to prioritise the risks based on their severity.
A risk’s likelihood and impact will help dictate how important a particular situation or event may be for your business’ operations as well as other entities that could affect an organisation in different ways.
For example, if your company is based in an area prone to natural disasters, such as flooding or bushfire, you may place a higher priority on this risk than issues related to stakeholders.
Your prioritised list will help create a guide on what needs to be focused on moving forward.
STEP #2 – IDENTIFY YOUR BUSINESS’ CRITICAL FUNCTIONS TO ESTABLISH RECOVERY PLANS FOR EACH
Once risks have been identified, it’s important to consider their potential impact on the business.
This is the stage of creating a business continuity plan where you can now create a list of all the critical functions your business needs to be able to operate during an emergency. Following this, you should examine how each of these critical functions will be impacted by each potential risk.
When you find a business function that would be affected by one of these risks, start building a business continuity plan around that function. This may involve creating backups of crucial data, enabling employees to work from home (WFH) or establishing a secondary location or backup hardware supply.
From here, you’ll want to repeat this process for each critical function, identifying the level of risk associated with it and the protocols and procedures you need to have in place to ensure the swift recovery of that function in the event of an emergency.
STEP #3 – DEFINE AND ESTABLISH EMERGENCY ROLES
Your team will play a vital part in your response to an emergency. Often, it is the rapid action of your team that will enable you to put your business continuity plan in place.
With this in mind, it’s important to spend some time assigning the necessary roles to the key team members for each potential situation you’ve identified as part of Step #2 of this plan. Establish who will act as an emergency coordinator and what this position will entail.
In some cases, preparing for the unexpected will necessitate that you train your team members or obtain specific licences. Creating your business continuity plan may also include protocols for staff reallocation, especially if your business has multiple locations.
A key takeaway from Step #3 is that your team needs to know what they have to do when and when they have to do it when an emergency occurs.
STEP #4 – BEGIN DOCUMENTING YOUR PLAN
No BCP will be effective if the information isn’t documented. After all, there is always the possibility that one of the issues planned for may be the loss of key personnel to an accident or something else.
As such, it’s at this stage of building your business continuity plan, where you will need to sit down and document your BCP so that others can access and follow it when needed. It’s imperative to store your BCP in a secure off-site location, as this reduces the risk of the plan being lost or damaged in the event of a disaster.
STEP #5 – TEST THE BCP REGULARLY
Step #5 is all about ensuring that you are testing your BCP periodically. You may even consider preparing your team for some of the identified situations with mock drills to simulate an emergency. It’s important to ensure that your BCP remains consistent with the current risks, threats, and capacity of business at all times.
It can be helpful to establish an emergency preparedness team that revisits your BCP regularly. You should also test the BCP for its consistency whenever a significant change occurs in your business or industry, such as the introduction of new regulations.
A BCP SAFEGUARDS YOUR BUSINESS
Strong business leadership is more than just the ability to build and inspire teams. You also need to focus on protecting your business so that your teams are capable of doing what you need them to do in the unfortunate event of a disaster.
That’s where your BCP comes in. A good BCP defines every protocol to follow in the event your business faces an emergency. By creating a business continuity plan, you will be in a better position to lead your business through any crisis.
If you need assistance with Business Continuity Management get in touch with us! Connected Platforms is the trusted name in Small Business IT Support Brisbane wide. Call on 1300 866 096 or get in touch online today!
Based on the original article published by The Technology Press.