Failing to plan is planning to fail. And that’s nowhere more apparent than with small businesses lacking business continuity resources, such as a business continuity plan or business continuity software.
Indeed, some industry data shows that only 40% of small businesses have a business continuity plan in place. How to develop a BCP for the remaining 60% or enhance planning for those already with a plan in place? We delve into the steps to take in the following article.
The importance of the business continuity plan for small business
But why plan at all? It’s not hyperbole to state that businesses that don’t plan for disasters simply don’t recover. Small businesses, especially.
According to the Federal Emergency Management Agency (FEMA), 43% of small businesses affected by a disaster never reopen. Another 29% go out of business within 2 years.
The longer the recovery takes, the more likely the small business will permanently shutter its doors.
To put the numbers in relief, we look at the most recent long-term disaster: the Covid-19 pandemic.
As a result of Covid-19, there were 37.5% fewer small businesses open in the U.S. in 2021 than in the beginning of 2020, according to the Economic Tracker. In California alone, the share of small businesses decreased by nearly 40% over the same period.
What is a business continuity plan?
So, what is a business continuity plan?
International business continuity management standard, ISO 22301 defines the business continuity plan as documented procedures that guide organizations to respond, recover, resume, and restore to a pre-defined level of operation following disruption.
In other words, the BCP is a document that focuses on developing plans and procedures in case of disruption.
However, a BCP won’t necessarily include all the analysis that forms the basis of such planning, i.e., the business impact analysis (BIA). While they enable contingency planning, the BIA and other elements pertain to business continuity management more broadly.
Elements of a business continuity plan
So, what goes into the BCP? Here are the elements commonly found in BCPs, particularly plans for small and medium-sized businesses.
- Assumptions. Lists the necessary prerequisites for the plan’s effectiveness.
- Roles and responsibilities. Identifies individuals responsible for managing disruptions and those authorized to undertake specific actions, such as plan activation, urgent purchases, and media communication.
- Key contacts. Provides contact information for participants in executing the business continuity plan, often included as an annex.
- Plan activation and deactivation. Outlines conditions for activating the plan and the criteria for deactivation.
- Communication. Specifies communication methods between teams and stakeholders during a disruption, including designated communicators and guidelines for interacting with the media and government.
- Incident response protocols. Describes approaches for responding to disruptions.
- Physical sites and transportation. Lists primary and alternate sites for brick-and-mortar businesses, including assembly points and routes between sites.
- Order of recovery. Details all activities along with their Recovery Time Objectives (RTO).
- Recovery plans. Provides step-by-step actions and responsibilities for recovering personnel, facilities, infrastructure, software, information, and processes, including their interdependencies.
- Required resources. Compiles a list of necessary employees, third-party services, facilities, and equipment, along with responsibilities for providing each.
- Restoring activities. Describes the process for returning to normal operations once the disruption is resolved.
Developing a business continuity plan for a small business
Those might be the elements that go into a BCP for a small business. But how to put together the plan itself.
The Small Business Administration (SBA) provides the following steps:
1. Determine greatest risk potential
It might come from loss of heat, frozen pipes (that can burst, causing water damage), or loss of access caused by icy conditions or flooding.
What would happen if you had to shut down your business for several days? Look at the building where you do business and assess the property damage risks. If you do this early enough, you’ll have time to make structural upgrades that can prevent possible future storm, wind or water damage.
2. Establish your power needs
Have an electrician determine your power needs. Know what kind of back-up generator will work for you, but first find out if you have the landlord’s permission to bring in a generator.
3. Create a communications plan
Establish an e-mail alert system to keep your employees and key stakeholders in the loop. Use phone, texting, and social media to provide updates on your recovery process and to let everyone know you’re still in business. Make sure you can access your business website and social media accounts remotely or by mobile device so you can post your operating status.
4. Prepare your supply chain
Develop relationships with alternative vendors, in case your primary contractor isn’t available. It’s also a good idea to find out if your key suppliers have a recovery plan in place. Create a contact list for important business contractors and vendors you plan to use in an emergency.
5. Make sure you have enough insurance to recover
Contact your insurance agent to find out if your policy is adequate. Consider Business Interruption Insurance, which compensates you for lost income if you have to close your doors when disaster strikes.
6. Protect your critical data in the cloud
A good cloud backup provider routinely copies, compresses, and encrypts your company’s vital information before sending it to a secure offsite data center. All your electronic records and invoices are safe and available, even if a disaster wipes out your own data center.
7. Test the plan
Doing annual drills with your staff will show you what’s effective and where your preparedness plans need fine-tuning.
Business continuity software considerations for a small business
Missing from these steps, however, is the digital technology needed to help small businesses plan for and respond to emergencies. That technology is called business continuity software.
For small businesses, business continuity software provides the following benefits:
- Identify risks. Helps small businesses identify potential risks and their negative impacts.
- Create plans. Helps small businesses create and manage continuity and resilience plans.
- Improve efficiency. Helps small businesses streamline and automate processes to make them more efficient.
- Protect data. Helps small businesses protect critical information.
- Promote collaboration. Helps small businesses facilitate collaboration and information sharing.
- Improve response times. Helps small businesses respond to disruptions more quickly.
Of course, not all business continuity software is created equal. Small businesses should hone in on providers that offer some of the following functionality:
- Business impact analysis. Simplify your business impact analysis process and drive engagement across your organization using a built-in BIA tool that guides you through the process step-by-step, ensuring your BIAs are rich with insightful data to help you truly understand how your business works.
- Dependency mapping. Quickly identify dependencies between business activities and supporting assets or vendors and stay informed when one is at risk. Visualize and track dependencies to make informed decisions and take appropriate actions to mitigate risks effectively.
- Recovery strategies. Use a consistent recovery strategy across your organization, that allows you to define your strategies, response plans, roles and responsibilities, and pre-assigned checklists. Deploy these in seconds when disruption hits, to ensure the best response.
- Exercises and scenario testing. Don't wait for a real-world crisis to test your organization's readiness. With an advanced exercise management solution, you can be confident that teams are prepared to handle any situation that comes their way.
- Business continuity planning. Replace paper-based, static business continuity plans with dynamic, digitized business continuity plans that ensure your plans are always up-to-date and quickly available for all your users, on any device.
- Business continuity monitoring. Flexible dashboards and analytics capabilities ensure you always cater to your unique stakeholders, increasing visibility, transparency, and appreciation of business continuity across your organization.
But where to turn? We think Noggin.
Streamlined, integrated, automated business continuity software, Noggin enables organizations to remain prepared for adverse events and disruptions, facilitating engagement and collaboration across all stakeholders and ensuring a unified approach to resilience.
Don’t just take our word for it, though. Try Noggin for yourself.
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