Unexpected things happen sometimes. It can be scary when anything goes wrong for your business, especially if you’re not prepared. Most small businesses — and even large corporations — are now dealing with the unforeseen problems that have come with the coronavirus pandemic in the U.S. and all over the world.
It serves as an important reminder to be prepared and stay ahead of any disaster. Although many things are out of our control during unprecedented times like this, there are plenty of things your small business can do to plan ahead for unexpected events. This is where a business continuity plan comes in.
What is a Business Continuity Plan?
Business continuity is your business’s ability to offset that damage caused by sudden disasters or unforeseen circumstances. Some of these circumstances can include floods and other severe weather, server shutdowns, deaths or illnesses among your staff, pandemics like the coronavirus, or other events that can have a negative impact on your business.
Having a business continuity plan allows you to continue operating with little to no business disruption. Understanding your options through our disaster assistance guide can help you better handle these difficult times, as well as other potential threats to your business.
A business continuity plan (also known as BCP) can help you predict the incidents that impact your operation and success as a small business. Planning for this will help your business establish procedures and solutions to lean on during hard times, giving you the stability you need. Some of these solutions tap directly into your finances, where utilizing small business banking can make understanding your finances easier and support you during whatever hardships you’re facing.
Why Your Small Business Needs Business Continuity Planning
Having a business continuity plan is a no-brainer if you want to see your business rise above and succeed through hard times. It’s not the idea of expecting the worst to happen or being a pessimist, it’s simply having a plan in place and the resources available in the event of an emergency. The benefits of this include helping your business avoid financial loss, having access to information that will help you better analyze your business, protecting your team members economically and personally, and keeping your business up and running, to name a few.
Offset Losses
A business continuity plan can help offset the hit your business takes when a disaster occurs, whether it’s in repairs as the result of a natural disaster or offsetting a lack of business from pandemics like COVID-19.
As a business owner, consider establishing an emergency fund for disaster recovery. Emergency funds act as a safety net for short-term emergencies and ongoing changes in the economy. It’s no easy task to establish an emergency fund, especially when you’re just starting out. Committing to automatically investing small amounts into your emergency fund on a monthly basis can help. While you may never need to tap into it, it can give you the peace of mind you need to focus on keeping your business going.
It’s also important to keep up-to-date with external aid options for small businesses to generate emergency funds. The Small Business Administration (SBA) expanded its Economic Injury Disaster Loan program to allow for small businesses across the country to receive economic relief through an SBA loan during the coronavirus.
Aside from protecting your financial losses directly through an emergency fund, you can also protect your assets by taking proper cybersecurity precautions. This can include installing malware and virus protection on all company devices with an information technology team, encrypting data, and changing passwords regularly. Cyberattacks impact many vulnerable businesses, so staying on top of security can protect you against hackers.
Provide Valuable Data
Establishing a business continuity plan also offers a deep analysis of your business industry and trends. It gives you better insight into your business operations and what components are most important. This can include identifying departments that are vital to the success of your business and tasks that are always a high priority.
This data can also help you identify realistic timeframes for recovery by mapping out different scenarios and benchmarks. While each situation will likely have a different timeframe for recovery, it’s good to assess what your options are and plan accordingly to prepare for a variety of potential threats to your business. These predictions will translate into understanding the domino effect a crisis may have on your business, as it’s likely that serious situations could have several impacts on your business.
This data helps your business continuously prioritize and improve the structure of operations to further protect itself, its customers, and employees while you get back on your feet.
Protect Employees
The foundation of your business is your employees, so it’s essential to keep their best interests in mind wherever possible. A set plan has the potential to protect the financial, emotional, and physical lives of your employees.
If the damage or threat to your business is economic, a business continuity plan can help minimize layoffs. Whether or not you have enough funds on hand or need a loan, knowing the processes and steps you need to take ahead of time can ensure your employees won’t suffer as a result of whatever problem is in front of you.
If the crisis is life-threatening, setting an Emergency Action Plan can save the lives of your employees. For example, if there is an on-site natural disaster or threat, a plan is crucial to protect your employees so they know where to go and what to do in a time of crisis.
Implementing these protocols through a business continuity plan strengthens and protects your relationship with your employees. It instils confidence in the bond you’ve built with them, as they will feel secure knowing two things:
- There is a protection plan in place with them in mind.
- They matter enough to the company they work for to be prioritized in the business continuity plan.
Keep Your Business Open
One of the difficult parts of dealing with hardships that directly impact your business is finding ways to keep some sense of business as usual. Having a plan in place can help you stay in business in the face of a crisis.
This lets you continue to serve the loyal customers that keep your small business running. In your plan, you should set a structure in place to continue fulfilling outstanding customer orders with the same energy and quality you did before a crisis. If this isn’t possible, find an alternative way to show your customers you still appreciate their business.
The most important part of carrying out a customer-first attitude regardless of the circumstances is being transparent with a plan of action. It which helps instil trust and respect from customers. It also makes them feel valued and respected in return. Maintaining this relationship preserves your business’s brand and reputation. If you treat your customers right in an emergency, they’ll stay loyal to your company for years to come.
How to Create a Business Continuity Plan
Now that you understand why a business continuity plan is important, it’s time to build it out. Your plan should serve as your go-to reference in the event of a disaster, and you and your staff should keep it up-to-date so that everyone is on the same page.
Business Impact Analysis
This part of the plan identifies the cause and effect of potential disasters or circumstances that impact your company. A business impact analysis allows you and your employees to make smart decisions about strategies for recovery. Like a risk assessment, a business impact analysis can help identify areas to strengthen and how to best combat areas of weakness in critical business functions.
FEMA has an operation and financial impact worksheet that you can use to complete a business impact analysis. It breaks down timing, operational impacts, and financial impacts associated with different assets, functions, or business processes. This can help you identify what losses are probable for a given circumstance, and how it could lead to other impacts. Knowing this increases your preparedness and allows you to know exactly how different scenarios might impact your business.
For example, an operational impact like a loss in sales and income could lead to greater interruptions as time passes, causing other areas of your business to suffer, such as rent and payroll. This would be quantified as a loss in the financial impact section of the worksheet. Knowing the recovery time objective, or how long things can be expected to recover, can help you better understand how to manage and prepare your money and other assets.
Recovery Strategies
Based on the summaries of losses and impacts provided in the analysis, you can map out recovery strategies to help minimize instability that could occur in a disaster.
When building a business continuity plan, establishing an emergency fund is a key way many small businesses combat disasters. Establishing a fund that can be put to good use in times of crisis can help your business stay afloat if you are struggling to get by. There are many creative ways to save money for your emergency fund as a small business. This includes: outsourcing work at a lower cost or buying used office equipment instead of buying new.
Plan Development
Plan development involves training employees and departments that are crucial to the success of your disaster recovery plan being carried out.
The important part of development is ensuring information and knowledge transfer takes place. Ensuring that everyone has received the same training, and fully understands the business’s priorities and strategies will protect from any knowledge gaps and make the process as smooth as possible.
Testing
Testing involves more in-depth training over the course of an individual’s employment at your company. As a business owner, you should empower a business continuity team to keep employees up-to-date with consistent refresher crisis training.
This also involves keeping employees up-to-date on any changes that may occur within the recovery strategy. Certifying your employees on different procedures, from cybersecurity best practices like data backup to natural disaster recovery planning, keeps everyone equally ready to tackle any situation you may face and come out even stronger after disaster strikes.
