Business Continuity Planning: a tool for disaster recovery
If you run a business, what happens if a disaster strikes? Sudden or long-term business disruptions (like a blizzard or a pandemic) can cost you serious money, or even result in your company’s doors closing for good. A good business continuity plan (BCP) can help prevent that.
A BCP is a procedural roadmap you can follow in the aftermath of an adverse event that will help return you to normal or near-normal operations as quickly and efficiently as possible.
How do I create a business continuity plan?
First, make a list of the events most likely to affect your company. An effective BCP is pertinent whether the disruption to your business is natural or human-caused
- Blizzard
- Civil disturbance
- Earthquake
- Equipment breakdown
- Fire or explosion
- Flood
- Hazardous material spill
- Loss of key personnel
- Pandemic
- Supply-line breakdown
- Technology breakdown (computer system breakdown or cyber-crime)
- Terrorist attack
- Tornado
- Utility outage
You should be realistic about the risks related to your business. No plan is comprehensive, and there’s no such thing as a one-size-fits-all BCP. That being said, it’s better to have a BCP, however imperfect, than to try to do without one.
Once you’ve made your list, you’ll need to devote some time to answering important questions and making important decisions.
- Will you be able to keep your business open at your current location? If your offices have been damaged by fire, flood, or other events, you may be able to keep things moving temporarily at another location. Identify some target locations now as a part of your BCP, and rank them according to cost, availability, and desirability. You should also have a good idea of your infrastructure, accessibility, and technology needs. For example, if you’re not dependent on a storefront, in larger metro areas there are increasing numbers of co-working and business incubator spaces that might accommodate you while repairs are underway at your usual location. Because of the recent drop-off in demand for commercial real estate, you may also be able to sublet space from a company that’s not currently using all its facilities.
- Turn lemons into lemonade with a permanent move. With the changes to the landscape of commercial real estate mentioned above, if your office is a total loss and you need to open your doors elsewhere, you might be able to find a place that suits your business even better (and potentially more cheaply) than your old location did. Consider widening your search. If you consider areas outside your current location, your savings could be even greater.
- Could you go low-tech with parts of your operation? Most companies depend on technology. But if a disaster has dented your tech infrastructure, it doesn’t have to mean you’re stuck. Do a review of the resources on hand and decide what you really need for your business to function. You might be able to get by with laptops, tablets, or even smartphones while you’re waiting for your communications system to be replaced. Hard copies of contracts, receipts, invoices, and other mainstays of commercial life are still perfectly acceptable in most cases. This may get you through until your IT team has things back on track again. Make a hard-eyed inventory of your tech needs, build a BCP plan around them. Also, make sure you backup your critical computer files and data. This should happen regularly, even daily, if it wouldn’t be easy to re-create the information. Many companies keep their backups off-site.
- How long are repairs likely to take? Is “back to normal” a reasonable expectation? If you lost equipment, are replacements or repairs readily available? What about alternatives?
- How sound is your supply chain? Natural disasters won’t just affect your business; it’s likely that other businesses — some of which your company depends on to keep the wheels turning — are going to be set back as well. And what happens if one of your main sources for business necessities goes dark, or even goes under? It would be prudent to have a list of alternative suppliers or distributors, and to make a regular review of it as part of your BCP.
- Who’s on your list? You should have a list of key business contacts: employees, customers, suppliers, business affiliates (creditors, banks, insurance agent, etc.), local emergency responders, and utility companies. Maintain two copies — one on-site and the other in a secure off-site location.
And remember, a business continuity plan won’t do you any good if no one knows it exists or where to find it. Make sure all your key decision-makers are briefed about your company’s BCP. Review it with them regularly, and make sure your employees, suppliers, and customers know you have it, too. A big part of recovering from adversity is making sure those you do business with are confident you can.
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The information included here was obtained from sources believed to be reliable, however Grinnell Mutual Reinsurance Company and its employees make no guarantee of results and assume no liability in connection with any training, materials, suggestions, or information provided. It is the user’s responsibility to confirm compliance with any applicable local, state, or federal regulations. Information obtained from or via Grinnell Mutual Reinsurance Company should not be used as the basis for legal advice and should be confirmed with alternative sources.
11/2023