Despite your best efforts, a sudden downturn in your business could be brought about by a number of external factors that are completely out of your control. The coronavirus pandemic is a recent example of this, and it continues to pose a number of challenges to businesses across the country.
If an economic collapse were to damage your finances, or a global pandemic were to threaten your customers, would you have a plan in place to help you find success during difficult times?
That’s where a business continuity plan comes in. Business continuity planning, also known as a BCP, is a system of actions based on potential risks or threats that your business could be faced with. A BCP puts measures in place so that your business is able to continue operating if these risks were to become a reality.
For example, if a manufacturing business is located next to a river or stream that could potentially flood and restrict access to their premises, a business continuity plan would detail how the business would deal with the flood. This could be anything from finding details of temporary premises to arranging robust business insurance- or even making sure your employees can work from home. Any actions that would minimise lost revenue or delayed orders.
As a business owner, you are responsible for safeguarding the future success of the company. This includes your business premises, inventory, cash flow, assets and employees.
Putting your business continuity plan into action could mean that your business can continue to operate, serve customers and meet deadlines. It can also be a requirement from some insurance providers, therefore it’s a good idea to check this with your insurer, especially if you haven’t got a BCP.
A business continuity plan can help minimise the effects that can occur due to a threat or a downturn in the market - such as government activities that could affect a number of things including currency strength and future prospects for a business.
If you choose not to have a business continuity plan, you could put your business at further risk. To give you an idea of the risks, we’ve listed some of the potential consequences below:
When you’re forming or updating your business continuity plan, it’s important to define what constitutes a major threat to the operation and the future of your business. Here are some of the common incidents that can affect your business:
Your BCP should be personalised to how your business operates and cover every possible incident within these three categories. Below are a list of threats to consider which could have a detrimental effect on your business’ operation and productivity.
First, you could look to do some research on your competitors, your market and the needs of your customer base. Gaining a strong understanding of these areas will prepare you well for getting started on the plan. Following this, you can use a template to write your business continuity plan.
Competitor research can help you to identify your business’ unique selling point and help you understand how well positioned you are to compete in the market if demand for your product or service should drop due to disastrous circumstances.
Continuously monitoring your competitor’s successes, failures and investments in their business can give you an indication to how the market is moving (through current trends) which could help you decide how to position and adapt your business if a disaster were to happen.
While there’s no exact formula for what a business continuity plan should include; after all it’s personal to your business, its product/service offerings and its people- here are the main categories you may want to include:
In this section, you can outline the core reason you’re creating a plan. You can list these reasons as bullet points and describe what the plan is capable of doing. For example, responding to a serious incident or maintaining your key services could be relevant points to include.
Write an overview of who in this business your plan is intended to affect. Does it cover all departments? Does it require actions to be taken with your suppliers, or special communications with customers?
Outlining the full scope of your plan can help you to make sure that you cover all bases; creating relevant actions or suggestions to give to each member of your team.
Identifying all of the possible risks and threats to how your business operates is the first stage of a risk evaluation.
Once you’ve identified any threats, you should look at the probability and frequency of them occurring. This will help you prepare accordingly and look to invest in ways that can help your business recover better and quicker, especially if a risk or threat had the potential to frequently impact your business – e.g. your product can be affected by factors like the weather.
It’s also worth considering any secondary risks – risks that can occur after you’ve been affected by a threat or disaster. For example, in the event of a flood, the primary risk is restricted access to premises, while a secondary risk is damage to the building’s electricity which would delay restarting operations.
Once you’ve identified the risks your business could be faced with, the next stage is detailing the effect these risks could have. This will help you identify what is needed in order to maintain your business work flow and avoid unnecessary downtime. You should consider the cost and resources or equipment you may need in order to achieve your plan.
Your recovery strategy outlines how your business will recover during a threat and who is responsible for each step. It should include the following:
Testing your plan is the only true way of knowing it works. It will allow you to identify any loop holes that you may have missed before putting it into action. It will also help you evaluate the priorities of actions and whether you may need more or less people involved in the continuity plan in order to make it fully effective and continue your business operation.
Your plan should be regularly evaluated and edited in order to stay current. Your business’ threats and risks could change over time, especially during and after an expansion or if you’re moving premises.
If you don’t update it, you could risk having a plan that doesn’t cater for your business and therefore compromises its chances of success if affected by a threat.
The sections of your BCP listed below are most likely to need updating and maintaining:
Our business continuity plan example is not sector-specific, so you could look to investigate further what categories you may need to include based on your industry.
If your business is currently being affected by the coronavirus pandemic, check out our other recent blogs for helpful tips and suggestions. You can find information about support available to you on our coronavirus page - but above all we wish you well and hope that you stay safe throughout these challenging times.;