How will your business respond when faced with an unexpected situation? With a business continuity plan, you’ll know exactly what steps to take.
Managing a small business can be demanding, as 20% fail in their first year and a whopping 50% shut down within five years as per a January 2021 Entrepreneur article. Various factors contribute to these failures, including poor financial management or inadequate leadership. However, the ultimate test of a company is its ability to handle unforeseen circumstances. What do you do when a challenging predicament arises? If you don’t have a plan, you’re contributing to the dire statistics above. The good news is that a business continuity plan (BCP) is an ideal leadership tool to help you tackle the unexpected.
WHAT IS A BUSINESS CONTINUITY PLAN
A Business Continuity Plan (BCP) involves predefined protocols and strategies for emergency response in case of any disaster. Simply put, think of it as a collection of backup plans that detail precisely how to proceed when disaster strikes. This should extend to every aspect of an organization, from tech departments to human resources and all other key assets.
The plan should also contain protocols that direct responses during natural and man-made disasters, financial or cash flow issues, and equipment failures. The BCP’s primary aim is a high availability of necessary resources, enabling continuous operation and expedited disaster recovery.
BCPs are paramount; any lack of planning can result in disastrous consequences, as infrastructure failures cost businesses an average of £68,000 per hour. Implementing a good BCP minimizes these costs by limiting the damage and impact of such breakdowns on the business.
THE FIVE STEPS FOR BUILDING A BCP
Now that you understand the importance of having a BCP, it’s time to create one for your business. Follow these steps to ensure your BCP is as comprehensive as possible.
STEP #1 – PERFORM IN-DEPTH RISK ASSESSMENTS
Start by creating a list of every possible risk that your business may face. This list should include risks related to all of the following areas:
- Industry
- Geographical
- Trends and Market Movements
- Stakeholders
- Employees
- Business Infrastructure
Once you have completed your list, work through it to prioritize the risks based on their likelihood of impacting your business.
For example, a company based in an area that’s prone to natural disasters, such as earthquakes or hurricanes, may place a higher priority on this risk than they would issues related to stakeholders.
Your prioritized list tells you which issues to focus on first when creating your BCP.
STEP #2 – IDENTIFY CRITICAL FUNCTIONS AND CREATE RECOVERY PLANS FOR EACH
Once you understand the risks, it’s time to focus on the impact that those risks coming to fruition might have on the business.
To do this, create a list of the critical functions your business needs to be able to undertake to deliver its products or services. Then, examine how each potential risk could impact each function.
When you find a function that would get affected by one of the risks, build a recovery plan for that function. This plan may involve creating backups of crucial data, enabling employees to work from home, or maintaining a secondary location or backup hardware stock.
Repeat this process for each critical function, identifying the level of risk it faces and what you need to have in place to ensure swift recovery of the function in the event of an incident.
STEP #3 – DEFINE EMERGENCY ROLES
During an emergency, your staff members are as important as the recovery plans, and it’s their swift actions that enable you to implement the plans. To prepare, allocate roles to key staff for every potential situation. Define the emergency coordinator’s role and responsibilities, so they know exactly what to do.
Preparing for emergencies may necessitate staff training or obtaining specific licenses. Your plan may also outline staff reallocation protocols if your business is multi-faceted. The main aim is for your team members to know their role in emergency situations that may arise in your organization.
STEP #4 – DOCUMENT YOUR PLAN
No BCP can be effective if it resides solely in the leader’s head. After all, one of the issues identified may be the loss of the leader to an accident or something else.
As such, you must document your BCP so that others can access and follow it when needed. Make sure to store the 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
Business continuity plans (BCPs) can’t stay static as new challenges arise. Therefore, it’s vital to align your BCP with current risks and your business’s capacity. Building an emergency preparedness team to revisit the plan and run regular tests to identify gaps are sensible tactics. Perform these tests whenever significant industry changes occur, such as new regulations.
A BCP PROTECTS YOUR BUSINESS
Effective business leadership relies on more than the capacity to build and motivate teams. It equally demands safeguarding your enterprise so that your teams can operate optimally regardless of the situation. By deploying a Business Continuity Plan (BCP), you attain this level of protection.
A comprehensive BCP sets out all emergency procedures and safeguards you through any eventualities. Creating one is no cakewalk, particularly for smaller businesses which lack requisite resources. However, our team can help simplify the process. If you would like to schedule a 15-minute consultation on building a BCP or other aspects of business leadership, please do not hesitate to reach out.