Disruptions to business can cause loss of revenue, increased costs, and a resulting drop in profitability that insurance, government grants or loans don't cover. A business continuity plan is essential.
A business continuity plan sets out procedures to mitigate and aid recovery in the event of the unexpected. Setting out an effective strategy – that covers everything from business processes, employees, assets, to partners and suppliers – can help you maintain or quickly resume business functions following a significant disruption.
The reassuring thing is that, even if you don't have one in place when the unexpected occurs, there's still time to act.
Your business continuity plan should identify the critical areas of your business and any potential risks to these. By identifying risks and determining how they might affect your business, you can establish appropriate safeguards and procedures to get back on your feet as quickly as possible.
Consider the following if creating a business continuity plan:
A business continuity impact analysis. Use this to identify the critical areas of your business and the resources required to ensure operational resilience and continuity.
A business continuity team. Establish a team to lead your recovery efforts.
Recovery strategies. Create a plan so that you have clear processes and procedures to recover critical business functions quickly and effectively.
Test, feedback, and improve. Never assume that your business continuity plan and recovery strategies are watertight. Test them, ask for feedback, and identify areas for improvement.
Communication. While a business continuity plan is driven by a dedicated team, to be effective, all employees must be aware of the situation, the plan, and their responsibilities. You must also keep other stakeholders – customers, suppliers, partners – in the loop.
Business impact analysis determines which areas are most critical to your business and the resources required to ensure operational resilience and continuity during and after any disruptions. It helps to understand any risks and threats to your business' operational, financial, and reputational functions. Remember to factor in your supply chain and your people.
An analysis is usually undertaken by business area/function to:
Evaluate the financial and operational impact of disruption to areas of your business and the risk to operations.
Establish recovery time objectives and how quickly you need to recover a business function to ensure business continuity.
Use this information to develop recovery strategies, solutions, and plans.
A business impact analysis will flag areas where you lack the resources to support recovery. Gap analysis is a useful exercise to establish your business' recovery requirements compared to its current resources. It's also a valuable way of devising and assessing your recovery options and agreed-upon strategies.
There are a couple of questions that you should ask at this point:
What are the most significant risks to the more profitable areas of my business? How can these be reduced?
What resources are required to ensure continuity in these areas?
Are there areas that we can pause to focus on other areas?
While you may lead the effort, it's essential to have a team that spans the business to support the implementation and management of your business continuity plan.
Get your team involved from the beginning and use their areas of knowledge to drive strategies.
Recovery strategies provide alternative means to restore business operations to a minimum, acceptable level. Define priorities based on your business impact analysis and the recovery time objectives identified therein. You need to address each scenario identified in your business impact analysis.
One example of a recovery strategy is what's called a manual workaround. Essentially a plan B, it's a temporary way to ensure the continuation of critical business functions following a disruption.
Recovery strategies require resources – including people, facilities, equipment, materials, and technology – as identified in your gap analysis.
The following are questions are worth asking:
How do we ensure our people – across production, sales, marketing, and support – can continue to operate?
If our facility or equipment are damaged or out of operation, how do we meet customer demands?
If facilities are impacted, can we support work from home initiatives?
Is necessary business documentation accessible online?
How will we communicate and engage with our customers and other stakeholders (staff, suppliers, partners)?
Do we have the means to operate our business online if required (Does our online storefront have the capacity? Can we accommodate online sales?)?
How can we reduce disruption to the supply chain, if impacted?
A business continuity plan is never really complete. While it's valuable to have mechanisms to minimize disruption, be aware that you may still face the unknown.
Testing your business continuity plan will help to ensure that it's fit for purpose. Testing provides the opportunity to observe results, share feedback, and make improvements.
Communication and transparency in crisis are essential – whether it's communicating to your employees, customers, suppliers, or your many other stakeholders.
In terms of your business continuity plan, this should be shared with staff internally. Everyone needs to know the plan's scope, their responsibilities, and how the business will operate during and after this crisis.
You should alert customers to the disruption – where relevant. If there's a change in how your business operates and how they can access your business, they must be informed. The last thing you want is to lose customers because they think you are closed, but you've moved operations online.
If things change, don't worry. What's important is that you keep people informed.
We're still waking up to the impacts of COVID-19. Businesses are navigating economic uncertainty and changing customer behaviors. We focus on the hospitality sector and building financial resilience.
COVID-19 has changed the way we do business and how people engage with businesses. While high street footfall has dropped, the online market is flourishing. Is it time to move your business online?