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Why You Need a Business Continuity Plan and How to Create One

A key part of a small business being prepared for the unexpected involves creating a business continuity plan (BCP). A BCP can help safeguard your business by minimizing losses, damage and downtime. A business continuity plan could help prevent you from being among the 25% of small businesses that don't reopen after a major event such as a natural disaster.

Consider these tips when developing your own plans for your business and your employees.

A cover page of binder displaying the title Business Continuity Plan.

Four Steps in Creating a Business Continuity Plan

The U.S. Department of Homeland Security identifies the following four key components in the development of your BCP.

1. Performing a business impact analysis (BIA) to identify critical business functions and processes that could be impacted if disturbed or lost. Larger organizations might survey department heads and ask them to identify the potential impacts to the business if the process or function they oversee is interrupted. Questions to address might include:

  • What are the organizational resources that support these critical functions and processes? For example, if a flood wipes out the location of your manufacturing plant, how quickly could you relocate the workers and equipment to another facility and get back up and running?
  • When would the loss of a function or process impact the business negatively? For example, at what point might a sustained power outage cause serious losses?
  • Which processes have the most impact on the company's financial and operational functions and should, therefore, be prioritized? Perhaps your customer service department is far more essential to profitability than human resources in the face of a disaster. The BIA report should offer a step-by-step prioritization list and timeline for a strategic restoration of the business.

2. Identify and document the steps required to recover critical business functions and processes. This involves analyzing the dependencies between various departments in your business, determining an acceptable downtime for each of those departments and devising a plan to maintain operations. Other things to consider include:

  • Strategies for handling IT disruptions to servers, networks, personal computers and mobile devices. What manual workarounds can you put in place until computer systems are restored?
  • Is all your important data backed up to a cloud-based storage system and easy to access from remote locations?
  • If you had to relocate your office for a month, do you have short-term rental space and equipment options?

3. Creating a business continuity team that is responsible for documenting your plan to manage a short- and long-term business disruption. Consider consulting with key personnel in organizations similar to yours who have successfully weathered a disaster. The steps and techniques they found helpful could be valuable in helping your team craft an effective plan.

4. Conduct training for your business continuity team in recovery strategies and rigorously test the business continuity plan. Frequent testing using a variety of different risk scenarios lets you identify any weaknesses in a controlled environment for quick correction. Consider using a structured walk-through exercise, perhaps incorporating disaster role-playing, in which each team member goes over their components of the plan in detail to identify gaps.

Remember that for your business continuity plan to be successful, you need to make all employees aware of the plan, not just those on the continuity team. This should be part of your company’s overall emergency preparedness and disaster management training.

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