How to Make Your Small Business More Resilient By Planning Ahead
from Chamber of Commerce
Business disruption costs your company money. It can result in lost revenues and extra expenses. The worst part is that potential threats can come anytime and anywhere. A natural disaster or sudden illness can leave your company without a leader, supplier, or office space. A business continuity plan (BCP) ensures your organization can function during a crisis.
In 2020, more than 50% of companies worldwide didn’t have a business continuity plan. While many have since implemented one, others lag behind. Learn what a BCP is, how it benefits your company, and how to start.
What is a business continuity plan, and who needs one?
A business continuity plan is a written document that outlines the steps your organization takes during an emergency. On a basic level, your BCP explains who handles essential business operations and highlights time-sensitive tasks. You assign each person a role and describe operational processes so that you can fill empty positions with another team member or new employee as needed. It should be updated regularly and accessible to all staff in digital and paper forms.
All companies benefit from having a business continuity plan, even solo entities. After all, if you are a solopreneur, who will communicate with your clients if you can’t? Also, corporations in some industries must create a BCP. For instance, the Financial Industry Regulatory Authority (FINRA) requires member firms to keep plans according to Rule 4370.
Core components of business continuity plans
Although business continuity plans vary according to industry and company size, most include similar sections. A solopreneur without employees will have a less extensive guide than an entrepreneur with multiple locations and a large staff.
Your business continuity plan may include the following:
- A list of roles and responsibilities.
- Communication protocols for staff, vendors, and customers.
- An outline of critical functions like payroll and revenue operations.
- Your strategy for assessing risks, testing your plan, and updating it.
Assessing threats and having an actionable plan gives your company a competitive edge.
Business continuity vs. disaster recovery
A disaster recovery plan (DRP) helps your company move forward after an incident. It’s focused on returning to business as normal. In contrast, a business continuity plan prioritizes keeping your store open and running regardless of the circumstances. A DRP is often part of a more extensive business continuity plan; alternatively, it can be a stand-alone document. The key to creating a resilient business is having both strategies in place.
How small businesses benefit from having a BCP
Assessing threats and having an actionable plan gives your company a competitive edge. It ensures that you’re prepared to handle anything that comes your way while reassuring your customers, employees, and suppliers that your business will remain open during trying times.
Here are a few ways business continuity planning benefits your company:
- Increases organizational awareness: Going through the planning process can alert you to insurance issues, unknown risks, or supply chain concerns. It also encourages your staff to take their roles seriously and understand what’s expected of them.
- Reduces financial risks: Having strategies to resolve employee, supply chain, or location problems can decrease downtime, allowing you to continue to generate revenue during an emergency.
- Prevents customer dissatisfaction: Communication issues and business disruption can lead to clients turning to your competitors. Remaining operational means you can fully support customers in their time of need.
- Improves employee relations: Instability can lower worker retention rates. A BCP shows your staff how and when you will communicate during a crisis. Also, you can engage them during the process to demonstrate their importance to your small business.
Getting started: BCP tips and resources
Ready.gov provides top-notch resources to help you throughout the business continuity planning process. Along with guides and templates, you can view training and testing information or learn how to complete a risk assessment.
Check out free business continuity plan templates from the following agencies:
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.