5 Steps for Building a Business Continuity Plan
When faced with an unexpected situation, how will your business respond?
You’ll know exactly what steps to take with a business continuity plan. Leading a small business is a challenging initiative. According to an article published by Entrepreneur, 20% of small enterprises fail within their first year of business. And an astonishing 50% fail within the first five years. There are many potential reasons for these failures, ranging from cash flow issues to leadership challenges. But one of the core issues revolves around a company’s ability to deal with the unexpected. How does your business respond when a situation doesn’t play out in your favor? If you don’t have an answer, you risk adding to the above statistics. Fortunately, you can prepare for unexpected events with an ideal leadership tool, a Business Continuity Plan.
What is a Business Continuity Plan?
Business Continuity Plans are a set of predefined protocols and strategies defining how your business will respond to an unexpected disaster or emergency. You can think of it as a collection of backup plans telling you precisely what you need to do when the worst happens.
A Business Continuity Plan should encompass every aspect of your organization, from your tech departments to what happens to critical assets and human resources. It should also include a list of protocols defining how you respond to the following events:
- Natural disasters
- Hardware/software failures
- Financial or cash flow problems
- Man-made catastrophes
Any Business Continuity Plan’s goal is to ensure there’s a high availability of required resources to continue operations and disaster recovery following an emergency. They’re essential because failure to plan can turn out extremely costly. According to IBM, infrastructure failures cost businesses roughly $100,000 per hour. An effective Business Continuity Plan mitigates these costs by minimizing the effects of these failures on the company.
Now that you understand the importance of a Business Continuity Plan, it’s time to create one for your business. Follow these steps to ensure your Continuity Plan is as comprehensive as possible.
Five steps for building an effective business continuity plan
Step #1 – Perform Thorough Risk Assessments
Start by devising a list of every possible risk your business potentially faces. This list should include risks related to each of the following areas:
- Trends and Market Movements
- Business Infrastructure
Once you have completed this list, you’ll want to work through it and prioritize each risk based on the likelihood of impacting your business. For example, a company in an area prone to natural disasters, such as earthquakes or hurricanes, may prioritize this risk more than they would issues related to stakeholders. Your prioritized list tells you which topics to focus on first when creating your Business Continuity Plan.
Step #2 – Identify Your Critical Functions And Create Recovery Plans For Each
Once you understand the risks, the next step is to focus on the impact those risks might have on your business. To do this, list all critical functions your business requires to maintain and deliver its products or services. Then, examine how each possible risk could impact each function.
After determining a function that could be impacted by one of the risks:
- Build a recovery plan for that function. This plan might involve creating backups of crucial data, enabling employees to work remotely, or maintaining a secondary business location or backup hardware inventory.
- Repeat this process for each critical function.
- Identify the risk level it faces and what you’ll need to have in place for swift operation recovery in case of an unexpected incident.
Step #3 – Define Emergency Role
Your employees are also a vital component of your response to an emergency. And often, your people’s rapid actions enable you to put your plans in place. With this in mind, spend some time assigning your key staff members roles for each potential situation you’ve identified. Define who will be an emergency coordinator and what they need to do in this position.
Sometimes, preparing for emergencies requires training your staff members to obtain specific licenses. Your plan might also include protocols for employee relocation, especially if your business has several establishments. The main point here is that your staff needs to know what to do when an emergency arises within your company.
Step #4 – Document Your Plan
A Business Continuity Plan can’t be effective if it only resides in the leader’s head. After all, one possibility of a disaster is losing the leader due to an accident or something else. Therefore, you must document your Business Continuity Plan so others can access and follow it when needed. Make sure to store the Business Continuity Plan in a secure off-site location to reduce the risk of losing or damaging the plan in the event of a disaster.
Step #5 – Regularly Test Your Business Continuity Plan
No situation is static, and new issues will cause you to revisit your Business Continuity Plan. That’s why it’s vital to ensure that the Continuity Plan remains consistent with current risks and the capacity of the business. It’s worth developing an emergency preparedness team that regularly revisits your Business Continuity Plan. You should also test the Continuity Plan for its consistency whenever a significant change occurs in your Industry, such as introducing new regulations. Perform regular tests to reveal gaps in the plan.
Five steps for building an effective business continuity plan
Protect Your Business With A Business Continuity Plan
Business leadership involves more than being able to build and inspire your team. Focus on protecting your business so your team can do what you need them to do in any situation. That’s what having a Business Continuity Plan allows you to do. A good Business Continuity Plan defines every protocol to follow in an emergency. Building one puts you in a better position to lead your business through any crisis. Of course, building a Business Continuity Plan is not simple, especially for smaller companies with limited resources. If you’d like help creating your Continuity Plan, please schedule a free 15-minute consultation with our team today.
Need Help Devising Your Company’s Business Continuity Plan?
Give our experts a call today, and we’ll create a custom plan that will keep your business up and running even throughout the most unexpected events.
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