A business continuity plan can be the difference between surviving any disaster and shutting down as soon as tragedy happens. But what is this plan? What factors should business owners consider when writing it?
What Is a Business Continuity Plan?
A business continuity plan is a document that outlines the specific steps the organization, employees included, will have to take every time significant disruptions occur. These include:
- Natural disasters, such as earthquakes, floods, and pandemics
- Data breaches or loss
- Employee strikes or mass resignations
Its primary purpose is to ensure the business can continue to operate and generate cash flow. Otherwise, the lack of money can result in the following problems:
- Inability to support mass-production that can create profit
- Non-payment of utilities and rent
- Insufficient cash to pay for labor or wages
- Tough decision to apply for business loans that can have high-interest rates
Because of its importance, all businesses need to have it, mainly small-scale or micro-enterprises. These companies often have a limited asset size that they can convert to cash when times get tough.
Factors That Should Be in the Plan
Online, business owners can find plenty of templates and checklists to follow. They can customize these according to the needs of their organization. However, regardless of the design, a business continuity plan should have:
1. Data Backup and Recovery
During disruptive events, employees have to work from home. The office might have to close for a while. Cyberattacks can wipe out company data in a matter of hours or days. What happens then?
The excellent news is businesses can opt for business continuity and disaster recovery services. This way, they can access their data anytime, anywhere, securely.
2. Key Personnel
The business continuity plan needs to identify the specific positions and people who will write and update it and, most of all, lead the entire organization if it’s necessary to execute the program.
Otherwise, the company will be a ship without a captain. It is likely to sink once a storm comes along its path.
3. Assessment of Critical Areas
The plan also has to determine the areas of the business that will suffer the most during a disturbance. These functions might not be the same for all organizations. Once the team identifies these areas, they can proceed with:
- Exploring ways to lessen or avoid the impact
- Seeking new opportunities or pivoting
The COVID-19 pandemic provides a lot of examples of this. For instance, automakers Ford and General Motors shifted their production from pickup trucks to mechanical ventilators.
Meanwhile, a shutdown analysis revealed that many auto manufacturers could survive the pandemic without a bailout simply because they learned from the Great Recession.
4. Recovery Procedures
While the purpose of the plan is to lessen the impact of the disturbance, it doesn’t ensure that the organization will be left unscathed. No one holds the future.
However, the recovery procedure will help the business reset or restart its engines as soon as possible. It can help answer questions, like what to do with cash or profit, what functions will resume first, or whether the business needs to apply for a loan to support its operations.
Change is hard, especially if it’s unexpected. But it’s also something out of the organization’s control. What they can manage is how to react and adapt, and a business continuity plan can help in this area.