Life throws us all curveballs every now and again. As hard as it can be to get through disaster situations as individuals, it can be even harder for businesses to survive.
Difficult, yes. But not impossible!
There’s not much you can do to stop a disaster like Coronavirus, a hurricane, or an earthquake from hitting – so the question you should really be asking is “What can my business do to make it through a disaster?”
Here is where you’ll find the answer you’re looking for – get the full breakdown of business continuity plans below.
What is a business continuity plan?
A business continuity plan (or BCP) is a system designed to protect the assets and people of your business if a disaster were to ever strike. Part of a business continuity plan is a business recovery plan, which is specifically meant to help your business bounce back as quickly as possible after a disaster has its effects.
It’s important to note that a completely functioning business continuity plan does incorporate a business disaster recovery plan but also keeps your business up and running even throughout the disaster.
It might not be the most fun thing to imagine, but let’s use an example to illustrate the point. Imagine a toy store in the heart of town that’s just been hit by a hurricane, and flooding has left that part of the town ruined and inaccessible. What might that toy store do to ensure it can continue operating during such a devastating disaster?
Here are a few quick examples of what you might see in a business continuation plan for this imagined toy store:
- Store the bulk of the inventory in a secure location that isn’t susceptible to flooding
- Run an online store where customers can make purchases when the storefront is closed
- Be prepared to negotiate prices with the landlord, utility companies, and other service providers
- Maintain a strong social media marketing strategy and online presence in general that can be utilized to draw in more customers
- Stay ready to reorganize the business’s budget when certain expenses are no longer a factor during a disaster (electricity, water, internet, etc.)
These are just a few ways that could work in this very specific case. Each business’s disaster recovery plan must be unique to its particular size, industry, potential threats, long-term goals, and so on. We cover those details below!
[Not So] Fun Fact: FEMA (Federal Emergency Management Agency) reports a startling statistic that 40-60% of small businesses that are hit by disasters never open back up. You don’t want to become part of that statistic!
Top threats to business continuity
While disasters are often unpredictable (*ahem* COVID *ahem*), some are actually predictable to a certain degree. For example, it’s normal for Gulf Coast states to be fairly well-prepared for hurricanes – weather forecasts are pretty good at catching huge storms, after all. On the other hand, for businesses that are based in California, earthquakes are known to happen and may be a much more real concern than hurricanes – but earthquakes aren’t predictable the way storms are.
The point is, you’ll need to prepare your business for the unexpected, yes – but you should still focus your effort on building a business continuity plan that addresses threats that have a higher potential for happening.
At the end of the day, the results of a disaster striking your business can be quite similar regardless of the type of disaster that hits. Your business may suffer great losses of property due to destruction, long periods of being forced to stay closed, losses or complete freezing of sales and/or operations, and more. For certain types of business disasters, the business’s reputation may also be in jeopardy (e.g. when cyberattacks make a business look weak, unprepared, and unprofessional).
Whether it’s the threat of physical, financial, or reputational damage – you’ll want your business continuation plan to be ready to address a wide range of potential situations.
Learn how to incorporate COVID-19 office safety into your business recovery plan.
Here is a short list of potential threats that may impact your business:
- Fires / Wildfires
- Epidemics / Pandemics
- Terror attacks
How to ensure your business continuity plan is successful
To create a business continuity plan that operates successfully in times of need, be sure to follow the CREATE method:
C – Comprehensive
Your business continuation plan should be ready to protect all of the pieces that make up your business. Certain aspects of your business may currently hold a lower priority, but a disaster could flip things around and make something like email marketing a more integral part of maintaining your business. Be sure to take everything into consideration, big and small, when drawing up your plan.
R – Realistic
When a terrible situation hits your business, it’s not always possible to keep everything running smoothly. In fact, it’s very likely that you won’t be able to keep each and every part of your business running at full capacity. Be realistic about that detail so that you focus your attention on those aspects of your business that your business recovery plan can effectively address.
Side note: One of the best ways to prepare your business for a disaster is to ensure that your financials are in order before a disaster hits. Business loans can help you consolidate existing debt, make necessary repairs to stormproof your storefront, purchase a warehouse to keep inventory safe from potential disasters, and so on.
You can improve your funding odds by using Become’s online lending marketplace to match with the lender(s) that best suit your business needs. Become’s high-tech algorithms make the application process super fast, easy, and free.
E – Efficient
In the context of a disaster, your business will have few resources to spare. Make sure that when you design your business continuity plan your budget is conservative. More likely than not, when a disaster hits you’ll need to be more conscious of how your business spends money. One great way to increase efficiency during a disaster is to spend some time working on reducing your business operational costs now.
A – Adaptable
As mentioned above, certain types of disasters may be more likely to occur in your area than others. But, at the same time, you need to have a business continuity plan that keeps your business prepared to take on any sorts of challenges that may come up – no matter how unlikely or unexpected. The best way to do that is to create a business continuity plan that’s flexible enough to adequately respond to the more-likely disasters as well as those that happen once in a blue moon.
T – Team oriented
Your business is more than just a sequence of dollars coming in and going out. The people in your business are indispensable, and you should remember that when creating your business recovery plan. Firing staff shouldn’t be your go-to way of cutting costs when times get hard; do what you can to keep your employees relevant even when their current positions might not be retainable in light of a disastrous situation.
E – Extendable
As we’ve all learned throughout the Coronavirus pandemic, there’s no telling precisely how long a disaster can last. Your business continuation plan should be designed to react strongly when a disaster hits and also keep your business viable for the long-haul. Remember the phrase “a candle that burns twice as bright burns half as long”. Your business continuity plan is meant to keep your business alive – bide your time, budget your resources, and stay poised to do so for a while if necessary.
Benefits of a business continuity plan
Asking what the benefits are of creating a business continuity plan are sort of implies that there’s a downside to it. Well, there isn’t. Sure, there are costs involved, but that’s true for every aspect of a business – so the real question is whether you’re willing to take your chances facing a disaster situation without a business continuity plan.
We didn’t think so! But just in case you need a reminder…
Here are some benefits of creating a business continuation plan:
- Maintain your business operations
- Strengthen customer confidence
- Save valuable time rebounding from disasters
- Preserve your brand and reputation
- Get an edge over your competitors
- Limit the financial damage done to your business
- Avoid having your business fall into debt
40-60% of #smallbusinesses that are hit by disasters never open back up, and 75% don't have business recovery plans. Don't be part of those statistics! Use a #business continuity plan to ensure you get through in one piece. Click To Tweet
Creating your business continuity plan
Not only will a business continuity plan protect your business from the worst that a disaster has to offer, but it’ll also give you an edge over your competitors. Considering the fact that 75% of small businesses don’t have a business recovery plan, it should be no mystery why your business will benefit by creating a business continuation plan.
Here’s how you can get started outlining a business recovery plan:
1. Identify the objectives and goals of the plan
Your business continuation plan should have a main priority (or priorities) upon which the rest of the plan is based. If your business absolutely requires having a physical location open and operating, then keeping that locale functioning should be at the top of your list. On the other hand, if your business can continue working online when closed offline, then the objective of your business continuity plan should be to reallocate resources to focus on taking your business online.
Think carefully about what your business needs in order to survive a disaster, and design your continuity plan around those needs.
2. Establish an emergency preparedness team
It’s always important to keep all of your employees aware of what to do in case of an emergency situation. But in order for a business recovery plan to be implemented successfully, there needs to be a core group of people responsible for handling it – that will be your emergency preparedness team. Choose the members of that team carefully and meet with them on a regular basis to ensure the business continuity plan is up-to-date, to speak about current and future threats to the business, and have the team conduct stress tests on the business to check how prepared you truly are.
3. Perform a risk assessment and business impact analysis
As mentioned just above, it’s not enough to simply have a plan written down on paper. How can you ever be sure that the plan is effective unless you test it? That’s what risk assessment is for – identifying the weak spots in your business and the threats that your business faces so that you can strengthen your recovery plan and keep your business protected. Don’t overlook this step!
4. Identify essential business functions
Not all business functions are equal in importance. For example, producing the goods that you sell is a core necessity, but having your marketing team come up with new creatives for social media campaigns is less crucial (though still important). The point is, when a disaster hits, your business continuity plan needs to protect the fundamental functions that keep your business operating. Spend some time listing your business operations in terms of priority so your plan stays laser-focused.
5. Prepare a plan for each essential function/service
Once you’ve identified the essential functions of your business, come up with an individualized plan to protect each of them. A general business continuation plan will help identify those essentials, but simply knowing what the essentials are doesn’t do a whole lot in terms of keeping them safe. Create ‘mini’ plans for all of your business’s necessary functions that clarify what threats exist to those functions and how you can intervene to safeguard them during a disaster situation.
6. Train staff, test, revise, and update the plan
This step is fairly self-explanatory and should remain an integral part of your business continuity plan. Your business recovery plan will be magnitudes stronger if:
- Your staff is aligned on what to do in the event of an emergency
- You put your business continuation plan through stress tests to identify weak spots
- You revise your plan regularly to find the most efficient and effective ways of getting things done during a disaster
- You update your plan on a normal basis so as to remain prepared for different threats that may be more or less likely to happen
You’ve got to stay ready!
Nobody could have predicted that 2020 would introduce the Coronavirus crisis and the widespread impact it has had on businesses all around the world. At the same time, everybody who owns a business in Florida knows that they’ll face a big rainstorm on a pretty regular basis. Regardless of how foreseeable a disaster might be, your business must be prepared to respond effectively in the event that trouble shows its face. This guide will help your business understand why it’s important to stay ready, and how you can do so – put it to good use!