Is Your Business Prepared for the Worst?
Author : 1628 Ltd.
3 minute read | Author : 1628 Ltd.
3 min read
Is Your Business Prepared for the Worst?
by Tamara SchwartingFire or flood; billing error or prolonged illness. Even a small interruption can significantly impact your business if there is no plan in place for promptly resuming “business as usual.” Though common in large corporations and financial institutions, Business Continuity Plans (BCP) are often overlooked by smaller companies who perhaps put too much faith in insurance policies alone. An insurance policy may help you recoup economic or property losses, but it cannot help you navigate the logistics of operating your business after you experience a serious disruption. Getting operational quickly and efficiently requires the strategic planning and foresight of a BCP. The benefits of a BCP are to improve responsiveness by the organization, minimize confusion, and ensure clear decisions are made during a time of crisis. BCP is the official term for your business’s emergency or contingency plan. Sometimes called a “Disaster Recovery Plan,” these proactive plans put procedures in place to rapidly recover from unfortunate circumstances that may arise as a business owner. Implementing a BCP can mean the difference between success and failure in the case of even a small or temporary emergency. Why might you need a BCP? The possibilities are endless: a fire or flood in the building; a computer hard drive crash or cyber attack; a sudden or serious employee illness; a disruption in business-critical supplies; a strategic business partner or vendor going out of business. Taking the time to plan for these worst-case scenarios may not be your favorite part of the job but, as a business owner, it’s your obligation nonetheless. Things to consider while creating a BCP Creating a BCP involves performing a risk assessment, determining the potential financial impact, and running practice scenarios to determine the best way to recover from likely events. These assessments help create the protocols that will, someday, help get things back to normal after an unexpected interruption. Pro tip: Consult other business partners and supporting organizations like unions and trade organizations before beginning. It is possible that a template already exists that can save you valuable time, effort and money. If you’re creating a BCP from scratch, take into consideration the nature and location of your business and the risks of where you are and what you do. Do you own your building or are you leasing from a landlord who could suddenly change the terms of your lease? Do you produce a product with hard-to-source materials? Are you in an industry subject to high employee turnover? Do you collect and keep sensitive client information? Determine where your business is most vulnerable. Consider everything. Which scenarios are moderately or highly likely to occur? Then, determine which of these situations would have the highest financial impact on your business. Create a plan for scenarios with both a high likelihood of occurring and high financial impact. Then, for each scenario, ask and answer the question, “What steps would I take to recover quickly?” The formal plan you put in place will likely include the following written information and procedures: – Clear and executable steps to resume normal activities. – A comprehensive contact list that includes employees, key partners/suppliers and legal contacts. – A list of tools or supplies to hold in inventory for use during an emergency or a disruption in supply chain. – A list of critical systems needed to resume normal activities. – A list of (and access information to) key systems and accounts. – A list of key business decisions and responsibilities, including which individuals have authority, in succession. – A communications plan to engage the public and prevent the loss of customers in the event of prolonged closure. Practice and prepare After creating your BCP, you must test your plan to ensure you have created actionable solutions. Think of this like a fire drill. Conduct table-top negotiations and step-by-step simulations with key staff members. Together, walk through each scenario and the continuity plan to expose any errors or omissions and clear up the confusion. Make notes of all ways your plan may be insufficient and consider what things could be improved. Make changes immediately, while it’s fresh in your mind. Review your plan regularly; update and change it as needed. Ask yourself if anything has changed inside or outside the organization that could affect possible scenarios or outcomes. Minimally, check passwords and contact information a few times a year. As you move forward with a BCP, you’ll be better prepared for a possible catastrophe that comes your way. Make your BCP a foundational part of your organizational structure, teach your staff to use it, so it can provide the framework to resume to normal business.
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