You’ve likely heard that nearly half of all new businesses fail. According to the Small Business Association (SBA), 50 percent of businesses fail during the first five years. Over a 10-year span, the percentage increases to 66. But what can be done to avoid this? A business continuity plan. While it’s difficult to determine the percentage of businesses that have a continuity plan in place, one thing is certain: it’s better to have one than not.
A business continuity plan is a process by which businesses can prepare themselves to weather the potential threats that are always on the horizon, keeping their project plans, schedules and processes intact. Before we dive into what is a business continuity plan and how to write one, let’s quickly define business continuity planning.
What Is Business Continuity Planning?
Business continuity planning (BCP) is the process by which companies can overcome potential threats that can affect their ability to continue. Business continuity planning consists in creating recovery strategies, improving business processes and defining a recovery time objective.
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What Is a Business Continuity Plan?
A business continuity plan (BCP) is a plan to assist a business when and if there’s an emergency or potential threat to its solvency. These can be any number of risks including natural disasters such as fires and earthquakes to man-made risks such as cyberattacks. All of these are outside of normal business operating conditions.
In other words, business continuity is exactly as it sounds: maintaining business functions or responding quickly to resuming them if there’s a major disruption to that business. A business continuity plan is not the same as a business plan, which contains the executive summary, company info, market research and strategies, etc.
Why Do I Need a Business Continuity Plan?
The importance of a business continuity plan should be clear, but some business owners might be overworked by simply running operations and ensuring solvency. The problem with such thinking is that it’s reactive. You’re never in a position to profit from good business and grow your company as you’re always chasing fires and putting them out.
Remaining competitive is key for business success, and to lose operational capacity due to an act of nature removes you from the marketplace either temporarily or forever. It’s not a risk that can be ignored, which is why there’s a strong need to create a plan of action.
Key Elements of a Business Continuity Plan
A business continuity plan varies from one company to another as they’re tailored to the needs of a particular business. However, there are basic elements that should always be included. Here are the five most commonly used elements of a business continuity plan.
Critical Business Areas & Processes
The first step in business continuity planning (BCP) is to analyze your business operations and identify the business units, business areas and business processes that are important to your company. You’ll need to identify which of those require improvements and which can be cut from your continuity plan.
Once you’ve identified the business areas and processes that’ll be part of your BCP, you’ll need to look for all of the business data you can find. Data analysis is the only way to accurately understand what aspects of your business are successful and which aren’t.
Risk assessment is a critical element of a business continuity plan. To help your business continue to grow, you need to identify every potential risk that could stop you. It’s suggested that you use a risk register to list the potential risks along with risk mitigation strategies to implement if needed.
Business Continuity Impact Analysis
A business continuity impact analysis is done to determine the consequences of a sudden loss of business operations, units or processes. By conducting a business continuity impact analysis, you can determine the business impact in terms of costs, time frames and affected dependencies.
Recovery Time Objective
A business continuity plan is meant to be an actionable document that helps companies overcome difficulties and natural disasters. The recovery time objective is an estimated point in time by which you believe your business continuity planning strategies will take effect.
How to Create a Reliable Business Continuity Plan in 7 Steps
When working on a business continuity plan, there are several steps that must be taken to ensure that it’s reliable, all of which are outlined below.
1. Analyze Organizational Threats
You can’t prepare for what you don’t know. There will always be aspects of potential risks that are beyond your control so it’s important to do the due diligence. Make a comprehensive list of what threats are the most likely to impact your business. Then, dig deeper into each threat to see how it would impact your operations.
By analyzing your organizational threats, you’ll have an idea of what you need to do in order to respond. Consider using a risk register template to keep track of each risk.
2. List Primary Tasks to Stay Operational
Once you know what might happen, you have to devise a strategy to respond so the business can keep its doors open. That means prioritizing your list to include only top-level items that address the livelihood of the business.
Other points on your list are important, of course, but you can’t do everything, especially in an emergency. Pick what must be done and complete the rest once the dust has settled.
3. Safeguard Contacts
What if your facility is damaged or what if your IT is compromised? What if you lose contact information for executives and managers who are crucial to the smooth operation of the business? This is why it’s important to keep a list of management and their contacts in a safe or in multiple places so they’re easily accessible.
In case of an emergency, you need to reach the important stakeholders in your organization immediately. There’s no time to search for this information; it needs to always be at your fingertips.
4. Direct Personnel
Depending on the situation, there might not be anyone in a position of authority to explain what personnel should do and where they should go. This is a recipe for chaos, which only adds another problem on top of an already problematic situation.
That’s why it’s important to have a plan for where personnel needs to be if and when a disaster happens. You want to keep them out of harm’s way and place them in a position to carry on with operations if that’s a possibility.
5. Backup Data
Although this is second nature for many, it still bears repeating. Information is one of the most important assets for many businesses, and it must be protected from a potential breach or compromise of IT.
That data must be backed up in more than one place and there should be backups both on-site and off-site in case there is a localized catastrophic event. Online project management software offers you cloud storage for your data, creating an additional safeguard.
6. Collaborate Across the Organization
Businesses are collections of many different departments and the coordination of these elements is critical in getting operations up and running or running as normal. This is why a collaboration plan that includes all facets of the business must be in place to ensure these different departments are working together, not against one another.
7. Get Buy-In on Your BCP
For any business continuity plan to work, it must be distributed to everyone in the business so they understand their part in the process is. But even more than that, every person, from the top to the bottom of the business, must buy into the plan.
Anyone who doesn’t buy into your business continuity plan is a weak link that will break the chain you created to protect the business during this challenging period.
Creating a business continuity plan is like creating any plan. You need to have the tools to plan one, share it and then track it to make sure it’s progressing as planned. That requires robust project management software with the scheduling features you need to facilitate the process. ProjectManager is a cloud-based project management tool that lets you manage and control even major changes to keep your business operational. See how it can help your business by taking this free 30-day trial.