In life, it’s not always smooth sailing. The very same can be said for business.
So what happens to your business if your premises are damaged by flooding or fire, or you experience a computer network failure? Are you able to continue to service your clients with as little disruption as possible? Without a plan, this may be very difficult.
Business Continuity Planning is about preparing your business to effectively manage any disruption to ensure services to customers continue. Ensuring your business has a current plan will assist you in anticipating, preventing and preparing for potential disruptions, and how to best respond and recover from them. By not having a continuity plan in place, you run the risk of allowing such disruptions to have a serious impact upon the recovery of your business.
Getting Started With Your Business Continuity Plan
The amount of time and resources you will need to allocate to developing your plan will vary according to the size of your business. For most small businesses, this may only take a few hours while for larger organisations, it can take quite a significant amount of time and require professional assistance to create a comprehensive plan.
To begin developing your plan, it is helpful to work through these steps to identify potential disruptions and how best to manage and recover from them.
Step 1. Identify Your Risks
Businesses are at risk for a wide variety of occurrences that may have an impact upon their daily operations. This may include natural disasters such as fire and flooding, societal hazards such as the flu and criminal activity as well as operational hazards such as supply chain disruption.
This list goes on and on but it is important businesses sit down to brainstorm all of the different types of threats that can have an impact upon the running of the business. It is also important to ensure you are up to date with the different resources and avenues of communication within your community for monitoring such risks.
For example, how will you adequately monitor a bush fire that may or may not pose a threat to your business premises?
Other types of risks may include:
- Building fire
- Electrical failure
- Staff loss
- Pandemic influenza
- Machinery or computer failure
- Disruption to suppliers and contractors
- Damage or loss of stock
- Fuel supply disruption
- Computer or IT system failure
Step 2. Conducting A Business Impact Analysis
Once you have identified the different risks that may have an impact upon your business, the next step is to determine your key products and services, how long you can stop delivering them and identify your critical inputs.
In outlining your key products and services, it can be beneficial to prioritise them based upon the amount of profit they produce. You will then need to determine the ‘maximum acceptable outage’ of these key products and services which is the amount of time you could stop delivering these before the business would start to experience difficulties.
The length of time your business can cope with a disruption can be dependent upon a number of variables such as your industry, the time of day, week or year. For example, if a butcher were to experience a supplier disruption in the week leading up to Christmas, this would have a greater negative impact upon the business than during a quieter trading time.
To determine the maximum acceptable outage your business can withstand, you may need to analyse such factors as lost income, public disruption and compliance issues. Once you have determined these outages, you can sufficiently plan in the event they materialise in order to achieve business continuity. For example, the butcher has determined that during their busiest trading period, the maximum acceptable outage for not receiving products from their beef supplier is 1 day before it will have a negative impact upon the business.
The final part of this step is to identify your critical inputs.
Critical inputs can be defined as the essential elements required to run your business which may include:
It is essential to identify these critical inputs that enable you to run your business and deliver the key products and services to allow you to adequately plan if these became unavailable, and how you will manage and recover until the issue is resolved.
Step 3. Keep Your Business Running Through Developing Strategies
Now that you have identified your key products and services, your maximum acceptable outages and critical inputs, it is essential to develop continuity strategies to keep your business running smoothly after a disruption.
For each of the key products and services you have identified, the continuity strategy must assist in restoring the business back to normal operations before the maximum acceptable outage is reached.
Some strategies to assist in business continuity after an outage may include:
- Having back -up equipment on site or an agreement with a hiring company to supply equipment after an outage
- Borrowing equipment from a partnering business
- Cross-training staff and skill sharing to cope with personnel shortages
- Practice applying manual processes to replace computer systems
- Retaining records and copies of important documents off-site
- Identifying alternate suppliers
- Succession planning
Once these strategies have been developed, it is important to ensure your staff are adequately trained in certain tasks they are required to perform in the event of an outage that may be outside of their usual scope. Furthermore, it is vital to have relationships established with businesses who can assist you during an outage as well as suppliers and contractors.
In order to effectively implement a business continuity strategy, your employees must be aware of the triggers for activating the plan. This is time sensitive as triggers must allow for time to implement the strategy prior to reaching the maximum acceptable outage.
Step 4. Communication
During a time of disruption, it is essential to maintain a certain level of communication so as to ensure the right people and organisations are contacted quickly. In doing so, you can obtain the help and support you need to maintain your business during a time of difficulty.
It is also important to keep an open line of communication with staff, customers and suppliers regarding the disruption. Staff will need to know what is required of them to assist, customers will need to be notified if their orders can still be completed and suppliers will need to be notified of any changes to orders.
Within your plan, it is helpful to incorporate a list of key contacts who can assist you during a disruption. Contacts may include:
- Hire companies
- Insurance company
- Financial institution
Step 5. Practice The Plan
It’s all well and good to have a business continuity plan, but it’s effectiveness will depend upon how well it is executed during a time of disruption. The key to ensuring the effectiveness of your plan is making sure staff are aware of the triggers for implementing the plan and to practice regularly.
A simple exercise could be to present your employees with a range of ‘what ifs’ to discuss how they would handle the occurrence using the continuity plan.
It is also recommended that during quiet trading days, businesses practice using alternate or manual processes so they are well equipped to handle a similar outage if it were to arise.
Step 6. Review Your Plan
Finally, it is essential to review your continuity plan on a regular basis. As your business evolves, your plan may need to evolve with it to ensure it still addresses all of the key products and services, as well as critical inputs. It is also recommended that you keep several copies of your continuity plan both on-site and off-site so numerous people have access to it and there are back-ups if any were to be destroyed.
Contact us to discuss your insurance requirements and risk management strategies.
For further information about developing your business continuity plan, visit your state government website who provide great resources and guides for creating your plan.