A Rock-Solid Business Continuity Plan Could be a Lifesaver in a Crisis
It’s June — you know what that means?
Yeah sure. Hitting the beach, going camping, maybe even a cross-country road trip. All fun stuff. That’s not what I’m talking about, though.
June 1st marked the beginning of hurricane season on the east coast of the US. And, as we’ve seen plenty of times in recent years, even a comparatively mild tropical storm can cause havoc for businesses. Power outages, service disruptions, shipping delays resulting from damaged infrastructure... that’s just scratching the surface of the potential impacts.
I picked a hurricane as an example, but a big storm is just one of many possible sources of a business disruption. From natural disasters to cyber attacks, there are more threats to your continuity than you can count. That’s why it’s so important to have a business continuity plan in place before disaster strikes.
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What is a Business Continuity Plan?
- Business Continuity Plan
A business continuity plan is a proactive strategy that outlines the procedures and instructions an organization must follow in the face of disaster to ensure that critical functions continue to operate. The BCP cover identification of potential risks and the creation of recovery protocols to minimize disruption and facilitate fast resumption of operations.
[noun]/biz • nəs • kän • tə • no͞o • ə • dē • plan/
A business continuity plan — also called a BCP — is a strategic framework that can help you overcome sudden and unexpected challenges to your business. It ensures that you can keep up critical operations during and after an unexpected disruption of service.
Your BCP outlines procedures and instructions that you will follow in the face of natural disasters, cyber-attacks, or other significant interruptions. The aim here is to minimize downtime, protect assets, and defend the interests of stakeholders by ensuring a swift and structured response.
Having a BCP in place makes it easier for you to be resilient and protect your ability to deliver essential services. It also helps you offset risk; as we’ll see, insights gained through development and deployment of a BCP can help you identify vulnerabilities — and opportunities — that you didn’t know you had.
The Value of a Business Continuity Plan
The experience of living through the covid-19 pandemic should give you a sense of how important a continuity plan is to your business. But, just to drive the point home, consider the following:
When you have a good business continuity plan in place, you don’t have to scramble to figure out how to respond in a crisis. You’ve already done the work.
A lot of factors can influence the details of your plan. Take your choice of business entity, for instance.
Entities like LLCs (limited liability company) or corporations provide liability protection against business debts and legal issues, which can be crucial during a business crisis. This will help you ensure that your BCP is effective while your personal assets are safe and maintaining financial stability.
Your BCP gives your a structured and premeditated response to unforeseen challenges. It reduces the amount of time it takes to restore normal operations. And, it helps you better protect your employees, critical infrastructure, and sensitive data.
A well-prepared BCP can also help boost customer confidence. If you can maintain a high level of service, even during crises, then your clients feel reassured, and can have confidence in your organization. In a way, your BCP can give you a competitive edge; imagine what your customers will think when your competitors are struggling to recover from disruptions, but you’re chugging along, business as usual.
Risks of Not Having a BCP in Place
Your BCP protects your operational continuity, financial health, and reputation. It can also put the spotlight on you as an example of how to “do things right” when the pressure is on. On the same token, failing to put a BCP in place could be a major risk to your business.
Here are just a few consequences of failing to have a plan in place when you know what hits the fan:
Reputational Damage
Most of your customer might understand that accidents happen, and that certain crises are unavoidable. But, they’ll also demand a swift and effective response to any disturbance or disruption of service, regardless of its scale. How you handle a crisis can significantly influence your reputation for years to come — for better or worse.
Risk to Employee & Customer Safety
Your primary objective, regardless of the incident, should be to ensure the safety of your employees and customers. This task becomes a lot harder without a well-thought-out business continuity plan. If you don’t have a good plan in place, you could risk injury to your workers and customers. You’d be violating the number one necessity of managing a business
Financial Consequences
The costs associated with business disruptions can range from $5.8 million for fires or explosions, $4.4 million due to storms, and $0.55 million from water damages. Extended downtimes contribute to greater financial setbacks. Having a good plan in place minimizes downtime and improves service in the meantime. Additionally, depending on the crisis's severity, your company might face liability issues — like chargebacks for services not provided — potentially escalating the costs further.
How to Develop Your Business Continuity Plan: Step by Step
So, it’s clear why you need a business continuity plan in place. Next question: how do you get started?
Below, we’ve outlined the key steps you need to take to develop the kind of robust and resilient BCP you’ll need to overcome any challenge.
Your business continuity plan should be a work in progress. You should periodically test your plan under conditions that simulate actual emergencies, like practicing a fire drill when you were in elementary school. This ensures your BCP is effective, and that you stand a good chance of identifying areas for improvement. Remember, an outdated BCP can be more detrimental than having none.
Real-World Example: A Sample Business Continuity Plan
Your business continuity plan doesn’t have to be a dense, impenetrable tome. You're not trying to rewrite Moby Dick over here. For most businesses, a few pages with critical information will do.
Here’s a basic rundown of the information to include as you craft your own BCP:
Do You Have a Plan in Place?
By now, it should be clear that a well-structured business continuity plan is going to be essential for organizational resilience. It will be the lifeline that keeps you afloat in difficult times.
This document will be a kind of “quick reference” guide to help you define evacuation procedures, assign roles and responsibilities, and establish a robust audit protocol. Remember, though, that the development of a BCP doesn't have to be an overwhelming and complex process. Using the template provided above can help you streamline the process.
Have other questions about business continuity? Want to learn how effective planning can help you protect your revenue and prevent losses resulting from chargebacks or canceled services? Contact us today to learn more.
FAQs
What are the consequences of not having a business continuity plan?
Failing to have a business continuity plan can lead to significant disruptions, prolonged downtime, and loss of revenue during unforeseen events. Additionally, it can damage your organization's reputation and result in a loss of customer trust.
Do you have to have a business continuity plan?
A business continuity plan is not legally required. However, a good BCP is still essential for every organization. It ensures that critical business functions can continue during and after a crisis, minimizing disruptions and safeguarding your revenue and reputation.
What should a business continuity plan include?
A business continuity plan should include a detailed strategy for maintaining operational functions during a crisis, identifying key personnel, critical business processes, and necessary resources. It must also incorporate communication protocols, recovery procedures, and regular testing and updates to ensure its effectiveness.
How to write a BCP plan?
To write a BCP plan, begin by conducting a thorough risk assessment to identify potential threats and their impact on business operations. Next, outline clear procedures for response and recovery, assign roles and responsibilities, and establish a communication plan to keep stakeholders informed during disruptions.
