Small business owners have a lot to deal with, and business recovery in tough times is rarely easy because there are many things to manage. While you may follow all the recommended business practices and procedures to ensure that your business will stand the test of time, it is nigh on impossible to control all of the variables.
The reality is that business owners can benefit from expecting the unexpected. Unwanted challenges such as natural disasters and even cyber attacks on your business can pop up out of nowhere and cause major havoc to your business.
However, having a business continuity plan (BCP) can help prepare your business for those unpredictable moments. Continue reading to learn more about business continuity plans and some of the key things you may consider including in your business continuity plan to help your business prepare for whatever comes its way.
What is a business continuity plan (BCP)?
While those three words (business continuity planning) may sound a little intimidating, they needn’t be. Business continuity planning and business continuity management is simply a framework for helping your business respond to unexpected events and situations that can interrupt your business.
One of the most common forms of business continuity planning is the PPRR model. PPRR is shorthand for, “prevention preparedness recover response”.
Why is a business continuity plan important?
A small business continuity plan provides a formal system and structure to help reduce the risks to your business. A BCP also provides a defined path for recovering from potential threats to your business. It is a clearly defined plan that helps ensure that your staff and your business assets are protected. The ultimate goal of a business continuity plan is to help your business get back up and running quickly.
Five key inclusions for an effective business continuity plan and management
Now that you know what is BCP, let’s dig a little deeper into the essential elements for a successful business continuity action plan. An ideal BCP example will likely include the following.
1. Scope and objectives: A BCP will outline the departments, functions, and locations that it will cover. The plan also highlights its objectives, such as minimising downtime and protecting assets.
2. Risk assessment and business impact analysis: Risk assessment and business impact analyses (BIAs) are used to identify threats and vulnerabilities as well as potential disruptions.
3. Recovery strategies: The BCP outlines the recovery strategy of each critical function. It focuses on the resources, personnel, and technology required to restore operations. The BCP also includes the company’s Recovery Time Objective – which is the maximum amount of time that IT systems can be down following a failure.
4. Incident response plan: A BCP includes a detailed plan for incident response that details the steps to be taken during a disruption. This includes communication protocols, roles and responsibilities, and emergency management procedures. Also consider including contact information for everyone involved.
5. Training and awareness: Through training and awareness, a BCP helps employees understand their roles within the business continuity action plan.
Business continuity plans focus on what to do when things go wrong. They are the plan B for your business. A disaster recovery plan, on the other hand, is focused on “returning to normal” after an unexpected event. Disaster recovery is the way to get back on track with Plan A.
What are the benefits of having a business continuity plan?
A carefully considered business continuity plan provides a roadmap for reducing the impact of unanticipated events on your business so you can continue trading.
A business continuity plan (BCP) – whether based on the PPRR model or on another model – provides a formal system of prevention and recovery from potential threats to your business. It helps ensure that personnel and assets are protected and are able to function quickly in the event of a disaster.
Businesses can potentially be exposed to a host of disasters that can vary in degree, from minor to catastrophic. And this is why business continuity plans exist and are an important feature of business strategy. A BCP is typically meant to help a company continue operating in the event of threats and disruptions.
This could result in a loss of revenue and higher costs, which could lead to a drop in profitability. And businesses can’t rely on insurance* alone because it doesn’t cover all the costs and the customers who move to the competition.
Taking the right steps to mitigate and eliminate a risk before it becomes a problem is a valuable step you can take when protecting your business. This can be done with things like ensuring your business premises is secure, that your staff are properly trained and aware of what to do in an emergency and having business insurance in place, such as Public Liability, Professional Indemnity insurance, Business Interruption and Business Insurance.
Develop an action plan
Outlining the steps for what needs to be done if an incident does occur can help everyone in your workplace. Things like fire drills, access to first aid kits, a list of emergency contact numbers, and a clear process can help keep the risk of the incident from escalating. Ensure that these steps and processes are regularly communicated to your team.
Seven steps for creating your small business continuity plan
1. Set the goals of your plan
Your small business continuity plan may be designed to protect your employees and assets and to prevent financial loss in the event of a crisis. Some business continuity plans are created as a reaction to a specific incident that occurred. In this case, you may consider focusing on preventing one type of disaster while also considering other types that could disrupt your small business.
2. Create a business continuity team
Create a list of responsibilities before selecting a team to execute your business continuity planning. The responsibilities could include the following:
- A business continuity steering group of select employees from different areas of your business to create a list of all the assets or risks that could be included in the plan.
- A business continuity manager who manages daily responsibilities for the business continuity plan, such as employee education, crisis management and safety assessments.
- Members of the business continuity team, who support the business continuity program manager by following the instructions given by the business continuity program manager.
- Business continuity plan owners are key stakeholders such as HR, payroll, cybersecurity, health and safety, and other individuals who contribute to the business continuity plan for their area.
- Business continuity planners who execute instructions directly from the business continuity plan owners to support the rollout of plans.
3. Determine risks, assets, functions, and impact
The next step in developing your BCP plan is compiling a list of the most common threats and risks to your business, which may include several of the following:
- Fires, natural disasters and power outages;
- Public health crises;
- Cyber attacks and data loss;
- Economic downturns;
- Cash flow problems, including bankruptcy;
- Licence cancellations, government regulations and legal disputes; and
- Workplace accidents.
Next, do the same for your most at-risk assets, which may include your:
- company property;
- brand loyalty and customer relationships;
- license agreements;
- data centers;
- IT Infrastructure;
- supply chain; and
- intangibles, such as brand loyalty and customer relationships.
4. Set mandatory training timelines
You can ensure that your staff are prepared in the event of a disaster, even when key management staff are not present. Training is important for all stakeholders in areas that affect their work. Your cyber security employee, for example, should know who to contact if their data back-up solution fails, even when their department head is on holidays.
After you have completed your risk assessment, ensure that all stakeholders are trained in business continuity. Training employees can begin when they are hired, and you may also consider quarterly drills as a reminder. Employee training may cover fire safety, CPR, and other safety issues. In the best-case scenario, you won’t need to activate your BCP plan.
5. Identify vulnerabilities, and alternative solutions
After you have created your plan, identify the main vulnerabilities in your business. For example, an ecommerce business may be most vulnerable due to their dependence on a third-party supplier, delays in overseas shipping, or due to a cyber attack.
Consider using a scale of 1-10 to determine the likelihood that each vulnerability will occur. List potential back-up solutions and prioritise each item in your BCP plan according to the likelihood of it occurring.
6. Detail your actions for each vulnerability in your continuity plan
Structure your list of possible fixes into if/then statements with a list that includes potential solutions. A continuity plan in the event of a server crash may look like this:
If our server goes down during a weekend holiday sale, we can still increase our revenue by directing our e-newsletter subscribers to our online store, or by selling product via our social media.
You may also start considering recovery strategies that can get your business back on its feet, while also reducing the chances of the same issue happening again moving forward.
7. Request feedback
By asking for feedback from all stakeholders in your business, you can ensure sure that there are no stones left unturned in your business continuity plan. It is important that your plan is comprehensive and takes into consideration all possible risks.
A business interruption plan using the BCP example can help your business survive an emergency. Understanding your stakeholders, the risks that make your business vulnerable, and how to minimise those risks will help protect your brand, increase employee safety, and reduce financial losses. A missed vulnerability or a non-working solution can lead to a larger crisis, for which there is no continuity plan or recovery plan.
Getting back to business
Another important feature of your business continuity plan is outlining how you will get your business back up and running. Prioritise what needs to be done, what resources will be required, and create an outline of the steps needed to help you get there.
The prevention preparedness recover response (the PPRR model) is one way to approach business continuity planning, but there are others that you may consider for your business. The important thing is being comfortable and confident with your business interruption plan.
If you are reviewing your business interruption plan and how you handle business continuity management, this can also be a great time to review your business insurance. And BizCover is here to help you get your business insurance sorted fast.
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