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How to create a business continuity plan

If you have a business, you need a business continuity plan. You need to be aware that this is different from a normal business plan, which simply outlines how your business functions. Instead, it’s a kind of contingency plan that explains what your business will do to survive if it’s ever exposed to significant disruption.

But what does this document contain, why is it so important, and how can you start to develop one for your business? In this article, you’ll learn all about business continuity management.

What is a business continuity plan?

It is a recovery plan that outlines what your business will do in the worst possible circumstances. It’s a working document, which means it needs to be kept up to date. After all, you never know when you might actually need to implement it.

The role of this plan is to evaluate the potential risks that your business might face and the specific impact that these events could potentially have. It might sound like a very pessimistic document, but its purpose is to protect your business. If the worst does happen, you’ll know what to do.

To complete your plan, you’ll need a comprehensive overview of how your business functions and the resources it depends on. Then, you’ll be equipped to identify the disasters that could seriously disrupt it.

Once complete, your business continuity plan will tell you what needs to be done in an emergency as well as who should do it and the resources that they’ll require. You’ll use the information you gather during the process of developing the plan to assess the potential losses your business could incur, too.

Your plan might result in changes to the way your business operates. It may reveal ways in which you can take preventative action to protect your business from disaster and disruption. In this way, it can be a very helpful document for business owners.

Although you’re planning for a hypothetical situation, you should still test the viability of your plan before it’s approved. These tests will show you potential gaps in the plan or areas where modifications need to be made.

The process of completing a business continuity plan should make you feel more confident about your company’s ability to withstand severe disruption.

Why do you need a business continuity plan?

When is the best time to plan for a disaster? Certainly not during one. That’s why you should prioritise business continuity management by anticipating potential disruptions you might face in the future. Then, if the worst does happen, you have a comprehensive strategy ready to be implemented.

Emergencies occur unexpectedly, and often they are unavoidable. However, a well-written contingency plan prepares as much as possible for the various problems that a company could encounter.

This plan assumes a worst-case scenario and finds ways for the business to survive under the most challenging of circumstances.

Without a plan like this, businesses are extremely vulnerable. They may be operating in a way that assumes they’ll never experience a disruptive event. Should something devastating occur, these businesses seem far less likely to survive it.

A business continuity plan can represent the difference between a business responding strategically to a crisis and a business reacting from a place of panic.

If your business responds slowly or poorly to a disruptive event, this can affect the amount of insurance money you’re entitled to. You have to prove that you did everything you could to ensure the survival of your business.

Thinking about the best possible responses in advance of a crisis is fundamental to business continuity management.

Checklist: How to create a business continuity plan

Use this business continuity plan checklist to ensure you create a comprehensive plan.

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Different business continuity plan scenarios

A business continuity plan requires you to consider the impact that different threats could have on your business. This is known as a business impact analysis.

The specific nature of your business will determine which threats are most serious for you.

You should rank the likelihood and potential severity of different scenarios to determine which ones should be the focus of your business continuity management.

  • Determining risks, processes, and impact

    Before you can strategise regarding your response to an emergency, you first have to define both your business and what constitutes an emergency. That means you have to produce a detailed overview of exactly how your company functions on a day-to-day basis.

    Once you know the operations that are essential to your company’s survival, you can start working out which risks would put your business in grave danger. Could your entire business activities be jeopardised by a simple power outage? If so, this part of the process will make that fact clear.

    With an overview of your operations and a list of potential threats, it’s easier to forecast the impact that a crisis could have on your company.

  • Understanding company threats

    Every potential threat wouldn’t affect every company equally. Your business continuity plan should focus on the disasters that would most disrupt your particular business.

    To figure this out, consider the main threats that are considered to impact business continuity. These include biological hazards, epidemic illnesses, natural disasters, power cuts, and internet attacks.

    Assess each threat individually based on what you know about your business. This will help you rank the magnitude of these threats and create a plan that reflects your company’s reality.

    You’ll undoubtedly realise that some threats are relatively low risk for your particular business. That doesn’t mean you should ignore them entirely, but it makes sense to focus on those that pose the most danger to your company’s survival.

  • Determining your key resources

    Every company relies on specific resources. Business continuity management requires you to write a list of everything your business needs to survive. Then, you can consider how different disasters might impact your access to these resources.

    You’ll have to ask yourself some important questions. What could be used as an alternative if this wasn’t available through the regular channels? Are there other methods of obtaining equivalent items that could be explored?

    Remember, these resources may extend beyond the business itself. Maybe your work relies on key contacts, rented items, or regular deliveries. The scope of your business continuity plan should extend to how you’d replace these resources to survive in the aftermath of different disasters.

  • Key staff

    Of course, every member of your team plays an important role in your business. However, to plan for an emergency, you need to consider which staff members your business couldn’t survive without. This will help you organise a skeleton staff team that can take over in the event of a crisis.

    Who could be considered most essential? Those who know the business best as well as the regulations it needs to follow. Those who lead your sales services or manage important client accounts. Those who lead your production processes. It really depends on the specific nature of your business.

    This part of the plan isn’t about invalidating the contributions of your team. It’s about imagining a worst-case scenario and determining the minimum support that your business would require to survive.

  • Key external contacts

    Until you’ve developed a full overview of your business operations, you may not realise just how many external contacts your company depends upon. How would these relationships and interactions be affected in the event of a crisis? This is important information that will inform your plan.

    Think about the contractors your company uses as well as suppliers and distributors that work on your behalf. Your financial department probably uses the services of banks and lawyers, so include them in the plan. If your business couldn’t function without certain utilities, then these utility companies should be considered key external contacts.

    Your plan should include contact information so you can reach these necessary people in an emergency.

  • Key data, equipment, and supplies

    During an assessment of the most important resources to your business, you may realise that you haven’t backed up your data. This is one way in which a business continuity plan can help you make improvements to your operations right now!

    Your company undoubtedly uses all kinds of equipment, technology, and supplies. Part of your planning needs to consider how these resources would be affected in different emergency situations. Then, you can develop solutions that can ensure your company’s survival.

  • Key business documents

    There are certain documents that your company needs to continue operating. What would happen if you lost access to your banking information or your employee contracts? By considering this in advance, you can take preemptive, protective measures.

    Many companies store all of their documents at one location. This increases the risk of an emergency situation becoming devastating for their business. A fire or adverse weather conditions could be enough to cause debilitating levels of damage.

Contingency planning and business recovery

The purpose of your contingency plan is to outline exactly what your business will do to survive and recover from the disruption of a disaster. For example, it will imagine a scenario in which all your business equipment is destroyed and provide a strategy for maintaining essential operations using alternative means. It’s basically the official plan B for your business!

Your plan should consist of easy-to-follow, step-by-step instructions. Using your plan, every member of your continuity team – your skeleton team of essential staff members — should know exactly what they need to do and how they need to do it.

Undertaking this detailed level of preparation gives your business a better chance of survival should an unexpected event occur. Life is unpredictable, so it’s responsible to plan for every potential eventuality. Imagining threats to your business isn’t pleasant, but by anticipating threats and forecasting their impact you can ensure that you’re ready to respond effectively should you be faced with an emergency.

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