For businesses of all sizes, disaster can strike without notice; whether in the form of an economic crisis, natural disaster or any number of factors that may derail your operations.
However it presents itself, you need to be prepared to ensure that you can continue to operate. In this guide, you will learn more about why business continuity planning is important and how it can help your business stay afloat in times of crisis.
What is a business continuity plan?
A business continuity plan is a plan of action for your organisation during times of disaster. It refers to your ability to maintain business functions or a quick resumption of operations following a crisis or disruption. It will outline all of the steps and procedures that you must follow in the event of such disastrous events.
A business continuity plan must include all aspects of your business operation, such as the performance of basic business processes, risk management processes, budget allocation, and the implementation of certain technologies.
Business continuity is essential for businesses of all sizes, but its affects are felt more by large enterprises that stand to lose more when there is a disruption to their business activity (such as cost of operations and employee salary). The aim of a business continuity plan is to operate even during times of disaster and to create as little downtime as possible, until such time that the organisation can re-establish its full function.
Why is business continuity planning important?
Downtime is something that businesses try to avoid. When there is downtime, there is no operation. And when there is no operation, your business is not generating profits.
There are numerous factors that can lead to a downtime for a business, such as threats like extreme weather, economic crisis, and cybersecurity attacks. You need to anticipate these disastrous events that can lead to a business disruption so you can have a plan of attack on what you must do to maintain full business functions.
Four reasons business continuity planning is important
1 – Organisational assurance
A business continuity plan is essential to assure your customers, partners, and suppliers that you have things under control. When there is a threat or emergency to an organisation, you need to give your partners full confidence that you have the capacity to operate.
It also gives assurance to your employees that you have everything under control. However, you need to communicate with your team the extent of the impact that such a disastrous event has on the entire organisation. The more transparent you are, the more you can get their support to aid in the full recovery.
2 – Manage your risks
When your organisational operation is under threat, things could quickly snowball from bad to worse. A business continuity plan is vital in order to prevent that from happening. Your business continuity plan must be closely linked with your business recovery plans so you do not end up wrangling with an existential business crisis.
Another reason why business continuity plan’s are vital in risk management is they keep the cost of damage under control. The sooner you can mitigate the risks, the fewer and lesser the costs involved in the recovery.
3 – Maintain quality
The quality of your products or services is essential to the survival of your business reputation. Even during times of crisis, you need a business continuity plan to ensure that you can maintain that same level of quality.
A common mistake made by a lot of organisations during a period of disruption is to put priority on survival. As a result, the quality of their products and services decline. By maintaining quality control, you can assure your customers that consistency is still a part of your priority, which will in turn help maintain their business.
4 – Reduce downtime
The main goal of a business continuity plan is to reduce the downtime for your organisation. All businesses know that downtime equates to income loss. The sooner you can restore full business operations, the sooner you can recoup any loss that you suffered during the downtime.
How to develop your business continuity plan
We have seen how a business continuity plan is of utmost importance for your organisation. Now, it is time to investigate how you can develop one, and the crucial elements you need to consider when making this plan.
First off, you need to assess your business processes so you can identify the vulnerable areas. It is also important to evaluate where potential losses might come from in the event that you are unable to operate for anywhere from a single week to several months.
Developing your business continuity plan consists of the following steps:
- Specify the scope of your business continuity plan (i.e. short and long-term plans of action to restore business functions)
- Pinpoint the key business areas that are most vulnerable in the event of a disruption
- Identify the functions that are most critical to the survival of your business
- Identify certain areas and functions in your business that are interdependent and how you plan on addressing that in times of a disaster
- Qualify an acceptable period for business downtime
- Define the actionable steps to maintain operations during a time of crisis
Once developed, it is important to test your business continuity plan so you know it will work. You can use a controlled testing environment to identify gaps and make improvements where needed. The aim is to replicate the scenario of a true disruptive incident for your business. Without planning, the plan might not be sufficient to fulfill its intended purpose. If that is the case, then the essence of having a business continuity plan holds no value for your organisation.
Moreover, you need to periodically review and improve your business continuity plan. As the conditions in the industry and the risks to your organisation change, so should your plan. This will allow your business to resume operations without causing as much loss or impact.
Source: Mitch Mitchell, SmartCompany
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