Facing Adversity? Here's How a Business Continuity Plan Helps
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Business owners have a lot to handle these days: high inflation, war threats, supply chain issues, pandemics, government policies, and natural disasters. Each one can feel like an existential threat for businesses, big or small.
Consider recent hurricanes Helene and Milton, two of the strongest Atlantic hurricanes on record. These storms claimed hundreds of lives, destroyed homes and livelihoods, and caused an estimated $100 billion in damage. The massive devastation to local economies has left many businesses struggling as revenue streams dried up.
And hurricanes such as Helene and Milton are just one of the factors that can put a business out of operation. Therefore, it's no wonder the uncertainty index hit an all-time high of 103 in September 2024.
However, despite these challenges, many businesses still overlook the importance of a business continuity plan. In fact, a 2023 Mercer study found that only 49% of global businesses have one. If you're among those without a plan, or if you're still unsure whether you need a business continuity plan, here are three key reasons why it should be part of your business strategy.
The Urgent Need for a Business Continuity Plan
If you're still unsure about the need for a business continuity plan, consider the following statistics. Fifty-two percent of businesses experience operational downtime due to inadequate business continuity planning. Moreover, the average cost of downtime for small businesses can range from $8,000 to $74,000 per hour. Most alarming, however, is that 40% of small businesses that experience a disaster never reopen.
On the other hand, having a business continuity plan as part of your strategic planning can have numerous benefits. Here are some of those-
A well-made business continuity plan can help your business stay open when problems arise. Every minute your business is closed, you might lose money. Remember, small businesses can lose between $8,000 and $74,000 for each hour they're closed!
Businesses with good plans can get back to work faster after a problem. This means they lose less money and time.
Having a business continuity plan shows that your business is strong. Customers and other important people like to see that a business can keep working even when things go wrong. This makes them trust your business more.
When you have a plan, it tells customers, workers, and other people that your business can handle tough times. This helps protect your business's good name.
60% of small businesses that lose their data shut down within six months of the disaster. Data is the new oil for businesses. So, data loss due to disruption can not only inflict severe financial damage but also results in a serious blow to your business's reputation.
Business continuity plans drafted under strategic planning emphasize the protection of invaluable assets such as data, intellectual property, and physical infrastructure. This ensures their security and integrity, preventing long-term repercussions from their loss or compromise.
Drafting a Comprehensive Business Continuity Plan
The sections above clearly outline the risks of not having a business continuity plan and highlight how such a plan can be a lifesaver during a crisis. Now, let’s look at the components of a comprehensive business continuity plan so you can start incorporating it into your business strategy.
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Step 1: Risk Assessment
Creating a business continuity plan begins with identifying the risks your business may face. Start by making a table listing each risk. For each risk, note its likelihood and the severity of its potential impact. This process will help you prioritize the most critical risks your business should address. Risks with the highest likelihood and most severe impact should be prioritized, followed by others.
Figure 1 Risk matrix
Step 2. Crisis Management
Effective communication during a crisis is critical. Clear messaging can reassure stakeholders and prevent chaos. Developing a communication plan in advance ensures clarity during challenging times.
Define roles and responsibilities within your organization, specifying who will communicate and what information will be shared. It’s also wise to have a backup plan in place for unforeseen events. Train employees on your crisis management and communication plan to avoid confusion.
Step 3: Disaster Recovery and Data Protection
Data is among your most valuable assets, so a data backup and recovery plan is essential. While security measures help prevent breaches, it’s equally important to maintain backups, at least for critical data. A robust backup plan ensures continued operations, even during severe data disruptions.
Bonus Tip. Leverage Remote Staffing
Partnering with a remote staffing company should be on top of your business continuity plan. By hiring remote employees, you can continue to serve your customers during times of crisis. Here are some of the other benefits this arrangement brings.
Wrapping up
Businesses today face an uncertain environment that can threaten their very existence, making a business continuity plan essential. In the sections above, we’ve covered the risks of not having a plan and the advantages a continuity plan provides. We also discussed how hiring remote employees can be a powerful strategy to help address uncertainties and adversity. Connect with us to learn more and stay tuned for insights into other relevant topics.