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Why Are Business Continuity Plans So Important to the Small Business Owner?
Including a Continuity Definition
When disaster strikes, business continuity plans can be the difference between restarting your business or not. Use a disaster recovery plan example (such as a network disaster plan) to help build your plan. Make this plan a key part of your risk management strategy for your business.
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Most small business owners do not understand the importance of business continuity plans to their business.
A Continuity Definition: Some business owners don't know what a business continuity strategy or plan is: business continuity plans are to be used for continuing or re-opening your business after a disaster strikes.
Planning for disasters is important because disasters, unfortunately, always happen; as the news over the past decade proves. How would you feel if you were a small business owner in New Orleans, USA during Hurricane Katrina, or a small business owner near the beaches in Phuket, Thailand when the Tsunami hit in 2004, or in New York City on 9/11, 2001 when terrorists struck, or a small business owner in Wenchuan, May 2008 when a 7.8 Richter scale earthquake devastated southwest China?
These natural and man-made disasters are terrifying and challenging to deal with on a personal level and on a business level (where the responsibility is more broad-reaching than family; to employees, customers, suppliers and other stakeholders). If you are familiar with the business continuity resources for your business, you will be better prepared.
As a small business owner, you not only have to be concerned about the safety of your staff, your suppliers, your customers and your business (as well as being concerned on a personal level) but you must be concerned about business resumption plans - that is, returning to work and re-opening for business after the disaster.
The potential impact of disaster on your small business can make a tragic situation even more difficult. For everyone.
In case of disaster, you must have a strategic plan ready to enact; therefore make your business continuity plan part of your business plan outline checklist. Your plan should include scenario analysis and strategic disaster recovery scenarios.
Your Business Continuity Plans Need
to Include the Following:
Business Continuity Plans - Your Communications Plan:
How will you contact all key stakeholders? Build a first responders plan: who will you contact, who will you ask them to contact (develop a phone tree). Phone (make sure that all employees know a number to call someplace across the country. For example, develop a reciprocal agreement to help another company on the east coast in case of disaster and they will help you on the west coast. Help could mean having someone who is far away from the disaster take messages and give messages via a 1-800 number.); internet (e.g. blogs); website; newspapers; television; email; these are just some options to consider.
Consider asking your telephone service provider to re-route all calls to your numbers (main office, sales, estimating, shipping, warehouse, toll free, fax, dial-in to the system network, etc.) to a recovery location, to a 'friendly' location (the east coast/west coast example directly above), or to a recorded message.
What will you communicate? Is it a return to work at the existing location in 5 days? Or a temporary recovery location; provide the address and directions to get there.
Or? This is dynamic and can only be decided at the time of the disaster but recognize that your communication must tell your audience fully what they will need to know and how they will need to act.
Business Continuity Plans -
A physical assets and property checklist.Then, in case of disaster pull that checklist and review the physical assets (building, equipment, infrastructure; for example, power, roads to and from the business, phones, internet) for impact. The building you operate in might need a structural review. Keep a list of professional engineering contacts with the checklist; contact people on that list as soon as possible. Also keep a list of all your equipment and your capital expenditures invested in your equipment (in case you need to replace or repair or claim through your insurance). The goal is to minimize the disruption or interruption of business.
Assume that the space you are presently operating in is not salvageable; have a list of alternative spaces that you could try to access and use (in other words, a recovery location). Think about suppliers' space; large warehouses; families; competitors.
Also try to consider space that is outside of the disaster area as long as that location can still serve your customers and your employees (consider this a temporary move for the first six months).
If you set up outside of the disaster area, it will be easier to operate and to transport goods, and people, to and from the temporary location). If necessary, try to help your employees with temporary housing or a temporary move closer to your business: the transportation infrastructure is likely to be down in the hardest hit areas for weeks, if not months.
Once you have determined what your recovery location is, your plan will need to consider how you will let key contacts know (for example, how will employees know where to go: use a phone tree; you phone your key two employees, you ask them to each phone the next two and so on.)
Similarly, consider alternatives for equipment: borrowing, leasing, buying. What is your most important equipment: list how, where and when can you replace it if necessary?
Business Continuity Plans - Contacts:
An employee list (names, addresses, phone numbers, emails, emergency contacts): you will need some way to reach them. They will need some way to reach you.
If you have another company location or affiliate that is located far enough away from each other, provide employees with that location's phone number and email address; it is more likely that you can make contact there, than at the local disaster site.
A suppliers' list (names, addresses, phone numbers, and emails) and on that list identify what you buy from them.
A key contacts list: your lawyer, your software provider, your insurance agent, your banker, your property manager or the owner of your building.
A customer list: with contact names, addresses, phone numbers, emails. Rank customers in order of sales volume (you need to talk to your largest customers first) they will be depending on you.
Business Continuity Plans - Operations:
A list of critical business functions that will allow you to resume your business operations (continuity should be written into your business operations plan),
If you are a manufacturing plant, a disaster could result in your total inability to continue manufacturing until the equipment is replaced and supplies are received.
However, you could contact 'friendly' competitors (and that's a good reason to build relationships and network; even with one of two of your competitors) and have your sales staff work to transfer your customers' orders to their location while you re-build. You may wish to negotiate an agreement in advance with your competitor. Build a strong and successful network well in advance of disaster.
While this may be a difficult task for you to face, remember that your customers will greatly appreciate the fact that you were organized enough before, and after, a disaster to keep their best interests upfront. That planning and consideration for your customers will have high value after you become fully operational again.
If you are a distributor, a disaster could result in your inability to provide service until your inventory is replenished. Make sure you keep a list of all inventory items, the monthly volume of each item and where you purchased them.
No matter what business you operate you will need a copy of, or access to, your business records. Today those records are typically stored on the business' management information systems. Keep track of how often you back up, who maintains the back up and where the back up is stored (make sure it is offsite; a number of companies believe it should be stored out-of-city). You need to be sure to build a network disaster plan into your overall plan - you are likely dependent on your system.
Consider how you will pay employees for the interim. Talk to your banker. Assuming your insurance will cover this business interruption, and ask your bank for a temporary line of credit to move into the business recovery phase quickly. Having a copy of your insurance policy in your business continuity plans book will be useful when talking with your bank.
The potential impact of disaster on your small business can make a tragic situation even more difficult. For everyone. But you can manage the impact, using business continuity plans, and survive disaster.
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Additional Reading:
Build your Small Business Plan.
Human resource planning needs to be part of business continuity planning.
Ensure your Business Financial Plan includes a provision for emergencies.
Return from Business Continuity Plans to Resources.
Include continuity strategies in your Business Operations Plan.
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Implement Your Plan: for Results
Once you've built your plan, you need to implement it.
Developing your strategy (in the plan) is the first, necessary, step. You need to know the direction you want to go, and you need the strategy and the plan to help you get there.
But once you've built the plan, you must execute it.
There is no value in building a plan that just gathers dust.
When building your business plan, make sure that you include an action plan for the strategies, techniques and tactics.
The actions need to include who's responsible for doing what; measurements for success (such as deadlines and timelines, targets and goals, costs, etc.); and why you need to take the action (in some cases, one action needs to be accomplished before subsequent ones can be launched).
As you work through the plan, make sure that you build reporting periods into the implementation: you need to know what's going on and why something is working, or not.
Make sure to communicate progress, or lack of it, throughout the organization. And re-visit the plan when and where necessary.
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Focus on Your Plan
Plan for the future: lots of business owners want to get, or keep, moving forward. Planning seems to be more of a passive activity.
However, to ensure that your business goes in the right direction and that it optimizes all its opportunities, and manages its challenges, it is important to plan.
Balance your activities against the plan: make sure that you are investing your time, and money, on the elements of your business that will help you succeed.
Measure what works, and what doesn't work, and keep your focus: use your business plan as a map to guide you in the direction you want to go.
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