Consider the things that could happen to your business and put a halt to operations. What happens if there’s a fire, a flood, or severe weather, like a tornado? Cyber attacks can also bring down important business networks, and utility outages for internet, electricity or even heat create roadblocks to getting things done. Sometimes, someone else’s disaster will touch your operations. For example, what would you do if there was a major industrial incident in your community, such as the recycling yard fire that occurred in Becker in February? And, finally, pandemics like COVID-19 send businesses into scramble mode across the state.
Thinking about these what-if scenarios ahead of time can be productive because it’s step one in creating a business continuity plan.
First, you identify the problem that interferes with or halts your operations. Of course, there are certain disasters where there’s not much — or anything — you can do to keep operating. But what you want to do is identify the things you can keep doing.
Why a small business needs a business continuity plan
First, going through the process can help you identify preventive measures your business may be lacking. By doing this, you can do a better job of guarding your business against threats. A small drainage upgrade to the exterior of your facility, for example, could mitigate flood damage. Or you might identify network solutions and procedure improvements that safeguard your company information against cyber attack.
Another big reason to build a continuity plan is that an insurance payout isn’t going to cover all your expenses. It may help you rebuild your facility, but you’ll still be at a deficit if your business ceases to operate and your customers flee to the competition. You have a business continuity plan so you can resume operations quickly, and continue serving your customers and clients.
More importantly, the business continuity plan helps you think ahead. You may not identify every scenario, but if you’ve taken the time to think through how a disruption would interrupt your business and what to do to get back up and running, it’s helpful. Instead of being caught unawares and building a plan on the fly, you’ll at least have a checklist and processes you can start doing right away.
Finally, being agile in a crisis is a great way to maintain the confidence of your clients, your investors and the public. When your employees and your customers are on the receiving end of a fair, responsive, well-thought-out plan, it creates the best possible outcome and improves your reputation.
Things you'll need in your business continuity plan
Make it a team wide effort. When you sit down to create your business continuity plan, review input from each unit and department that’s affected. When you talk to people at each level of the organization, they may identify solutions and obstacles you may not have considered, but that are nonetheless critical.
Analyze the effects. If there was a disaster, how would it affect your processes and operations? What could continue and what would cease to function?
- Name the key areas of your business and the core, critical functions, and identify how the functions are interconnected with one another.
- Which areas are most vulnerable in a disaster?
- How much downtime can you sustain? What happens after one day of downtime? Three? A week or longer?
Completing this exercise will help you identify the safeguards that can add protections for the business operations, assets and the safety of all personnel.
Build your response plan. You’ll be looking at ways to help the organization continue after the disaster. What needs to happen to continue operating and continue earning revenue? Based on that, create instructions, procedures and a checklist. Here are just a few questions your plan needs to answer:
- Which supplies and equipment would you need, and where will it be kept?
- Which data backups do you have and where are they located?
- Which emergency response teams would be involved?
- Which key personnel will be assigned which task?
- Do you have a backup site, or would employees need to work from home?
- How will updates and instructions be communicated to personnel? When would websites and social media channels be updated?
Complete a run-through. This can take the form of a table-top exercise. That’s where key leadership and personnel from different departments sit together and go over the plan. They can identify missing pieces and strengthen the plan. Or this can be conducted through role playing or a simulation, where you define a specific situation and involve your key players. Afterward, evaluate how it went, and update your business continuation plan accordingly.
Don’t overlook the need to review and update. When disaster hits home, it’s easy to find the motivation to create a business continuity plan. However, when the urgent day-to-day arises, these plans can easily be pushed aside and forgotten. Don’t let your business continuity plan collect dust. Because systems change, personnel turns over, and the last thing you want is an obsolete plan. Schedule time for an annual review and update.
Minnwest Bank’s cash management services give you the tools you need to streamline your business, but with the security assets to reduce your risk. Learn more by talking with a commercial banker today.