When running a small business, there’s virtually nothing worse than missed opportunities. And, in case an unexpected event (natural or man-made) disrupts the business, every second tends to feel like an opportunity that was missed.
Creating a business continuity plan for your small business is essential to avoid such cases. It’ll help you limit loss and downtime when your business gets disrupted. A small business continuity plan can also help boost employee and customer confidence, lessen business risks, and reduce potential financial losses.
Common Risks Avoided by Business Continuity Plans
- Natural disasters like earthquakes, fires, flooding, tsunamis, etc.
- Breaks in supply chains which can negatively impact orders and inventory
- Infrastructure failures that may affect Internet connectivity, phone lines, and road access
- Property damage and theft
- Terrorist attacks which may lead to a national emergency
- Cybersecurity breaches and data corruption which can put customer and business data at stake
- Illness, work stoppages, or other staff disruptions which could significantly hurt small businesses
NOTE: Each business will have different specific risks. The risks listed above are the most common ones that business continuity plans tend to minimize, mitigate, or avoid.
Strategizing and developing this plan is inarguably a good small business practice. Below, we discuss the 7 key steps you ought to follow to create your business continuity plan. Making use of these strategies will help keep the business on track, especially during the toughest times.
(I) Uncovering the Risks
Failing to note potential threats and underestimating the impact of known threats are among the biggest mistakes businesses tend to make. Begin by identifying your potential threats, including any natural hazard which could affect your business’ location.
Define the probability of such threats occurring and consider the severity each threat would bring about. Now, multiply the probabilities and severity to get scores for each. You can then address threats that score the highest first.
(II) Analyzing Your Operations
Responding promptly to a particular disruption can make for the difference between your business’ survival and closure. It’s thus imperative that you identify your small business’ key functions and processes. Determine how long you can last without such functions and still remain in business.
To formulate your answer, consider defining what your main product/service is and things which would most likely affect your ability to conduct business. Additionally, consider any of your business’ processes and functions that might have legal, regulatory, contractual, or financial obligations.
(III) Establishing Ways of Contacting Employees and Vendors
An emergency can deter your workforce from accessing the business. Similarly, a local disaster may affect your vendors. Effective two-way communication with vendors and employees is crucial before, after, and during a disaster.
As such, ensure you have current mobile and home telephone numbers, emergency contact information, addresses, and emails. Ascertain you have reliable contact information for your key vendors, suppliers, and business administrators, too. In addition, ensure all that information is available offsite from the business location.
(IV) Putting an Information Technology Plan in Place
The chances are that you rely on some kind of digital data, computer hardware, and software, irrespective of your business’ size or scope. Accessing such information and tools can be essential to your ability to remain in business.
You should thus consider keeping backups of everything accessed by or on your computer, including files, logins, passwords, operating systems, and critical software. Have one copy of the backup onsite and another at a designated offsite location. The latter can come in quite handy, especially in case of large-scale disasters.
(V) Running a Temporary Worksite
Designating a temporary worksite can be extremely convenient, if possible. Determine whether you’d be able to continue smooth operations if your office or business premises is shut down, depending on the products or services you offer. Having products stored in a second, secure location could enable you to maintain the regular business schedule in the event of a considerable disaster.
(VI) Preparing Your Business Finances
Say a disaster happens and disrupts your business. You’d likely remain in operation if you had prepared your finances beforehand. You should, therefore, consider having an emergency fund or appropriate insurance.
A substantial emergency cash supply may help you purchase crucial equipment or supplies during a disaster. To ensure smooth, continued business operations, you should also identify all expenses and financial obligations that must be met.
(VII) Test the Plan
Testing the business continuity plan every now and then is among the keys to successful recovery from a disaster. Ensure your employees are aware of exactly what they should do and where to go in case a disaster strikes. They also ought to know how they can access the items needed to keep the business running smoothly whilst in a disaster. Regular plan tests will help ascertain that everyone is ready and on the same page should a disaster strike.
Sure, small businesses may have relatively less equipment and fewer employees than medium-sized or large-scale setups. However, they still remain as vulnerable to a disaster as large corporations. Preparing a small business continuity plan is well worth the time and expenses.
While your plan could stay the same over the years, you’ll need to adjust it over time as the business expands and you change certain processes or hire more employees. Consider it as a living document that may need consistent reviews and updates. That way, your mind will be at peace, granted that you’ll be well-prepared should a major problem or disaster affect your business.