Unpredictable events happen in business whether the cause is a global pandemic, natural disasters such as weather or even through willful or accidental damage. The impact may be felt directly or indirectly via a key customer, supplier or member of staff causing major disruption to your operations.
When adverse situations arise, you must be ready to adapt to survive and thrive. This is where business continuity planning comes into play as it allows you to prepare in advance the processes and procedures to help you cope with the unexpected.
A carefully thought-out business continuity plan makes coping in a crisis easier. It will also help you minimise disruption to your business and customers reducing opportunities for your competitors to benefit at your expense. In short it is a clear way of giving confidence to staff, customers, suppliers, insurers and investors that your business is robust enough to cope with unforeseen events that may occur.
What are the main benefits of business continuity planning?
- keep your business trading during and after an incident.
- recover operations more quickly after interruptions
- reduce costs and duration of any disruption
- mitigate risks and financial exposure
- build customer, supplier confidence and trust.
- safeguard company reputation
- develop confidence within the business
- comply with regulatory or legal requirements
- understand the risks better and then insure against unacceptable risks
- save lives if dangerous events (such as fire) occur
- understand how to combat and come out the other side of a cyber threat or attack
How do you write a business continuity plan?
The basis for business continuity planning are two linked areas:
- the risk assessment – which shows you what kinds of incidents you might face
- the business impact analysis (BIA) – which identifies the impact and recovery times for key operational activities
The risk assessment sets out the possible scenarios and likelihood whilst the business impact analysis assesses the costs, priorities and deadlines for the recovery plan. The outputs from reviewing and analysing these two areas give you reliable information and basis upon which you can build and complete your continuity plan.
What else should a business continuity plan include?
You should aim to cover the following areas:
- Emergency response – focus on the welfare of people before containing and controlling the disruption. Develop incident response flowcharts or checklists, evacuation guidelines and procedures, list of relocation sites, etc. These features should be owned by named roles and not named people who may change over time. Once you are sure that lives are not in danger, the focus can shift on containing the damage to your business.
- Crisis management – determine how information will flow to media, stakeholders, staff, etc. Agree communication protocols, decide how you manage the loss event, and consider resources you need to support the recovery. Set out how you’ll deal with possible media interest in an incident. Appoint a company spokesperson (and make it clear to staff that they must communicate through this person to external bodies) to handle questions and try to be positive in any statements you issue. If possible, inform your staff, customers and suppliers about the incident before they find out about it in the media.
- Business recovery – set out detailed operational plans for critical functions and assets, as recognised in the BIA. Identify the resources and personnel needed to restore critical operations. Agree clear strategies and responses that you can follow for different loss scenarios and identify responsibilities for carrying out disaster recovery actions, including systems recovery, stock and supplier recovery, resources and equipment recovery, etc. The first hour after an emergency occurs is critical in minimising the impact. Your plan needs to clearly outline the immediate actions you will take. Also, consider giving staff specific training to enable them to fulfil their duties in an emergency and ensure all employees are fully aware of what they have to do.
- Key contacts – create a list of internal and external people / roles and organisations whose support you may require, and their designated roles in an emergency. For example, provide details of key roles / staff, critical suppliers, local councils, neighbouring businesses or emergency responders like police, utility providers, landlords or insurers. It’s also worth including details of service-providers such as glaziers, locksmiths, plumbers, electricians, and IT specialists. Include maps of your business premises’ layout to help emergency services, showing fire escapes, sprinklers and other safety equipment.
- Financial Plan – develop a financial impact analysis covering the effect from the loss of individual business functions. This should include the timing and cashflow outturn position from reduced revenue, increased cost including one-off hire plus any additional outlay on capital expenditure. Maintaining adequate working capital and cash headroom throughout the recovery period is vital and this should be vigorously tested. If additional finance will be required, then the plan should identify where this will be obtained from along with the extent to which amounts can be claimed and received under existing insurance policies. This financial exercise should also assess the ongoing and longer-term financial effect including any loss of customers, increased cost of production and overheads such as additional insurance premiums & higher depreciation on replacement plant & equipment and IT infrastructure.
- Dealing with Cyber Attacks & Ransomware – threats have increased drastically over the last 5 years. With remote working now the new normal for many businesses on a global scale, there is more opportunity to be targeted by criminals. With new financial systems and software being developed and rolled out to companies, the developers must ensure that strong cyber security is paramount to avoid potential hacks and personal & financial data being both stolen and corrupted by hackers. It’s imperative your company systems and home workers have the most up to date security software installed on their devices, ensuring your company and personal data is kept secure, and that they’re well versed in how to best use the software systems for work, guaranteeing improved efficiency and security.
Keep in mind that different disruptive situations require different responses. Keep your plan broad enough to address different disaster scenarios – from worst-case events that shut down your facilities or operations completely, to partial outages. Testing parts of any plan regularly is also crucial to make sure it works.
Reflect, Analyse & Act
Failure to plan could be disastrous for any business. At best, you risk losing customers while you’re getting your business back on its feet. At worst, your business may never recover and may ultimately cease trading.
A clear, comprehensive business continuity plan will give you the best chances of overcoming a business disaster. Once you create a plan, remember to test it rigorously to make sure that it fulfils its purpose.
Find out how EFM can support your business
An effective Business Continuity Plan will minimise any disruption to your clients, employees and business. For help with designing and implementing your business continuity plan, including specialist support for key finance roles, speak with us at EFM on 01582 516300, or email the team via email@example.com to set up your free one consultation.