What is a business continuity plan? Inclusions, benefits and setup guide

Small business owners have a lot to deal with, and business recovery in tough times is rarely easy. While you may follow all the recommended business practices and procedures to ensure that your business will stand the test of time, it is almost impossible to control all the variables.

Unwanted challenges such as natural disasters and even cyber attacks on your business can happen unexpectedly and create serious havoc for your business.

Having a business continuity plan (BCP) can help prepare your business for those unpredictable moments.

What is a business continuity plan (BCP)?

A business continuity plan is there to help your business remain operational and profitable even during times of disruption. For example, how do you plan on running your business and meeting customer demand if there are supply chain issues?

Business continuity planning and business continuity management are simply frameworks for helping your business respond to unexpected events and situations that can interrupt normal operations.

The most common form of business continuity planning is the PPRR model – prevention preparedness recover response.

Why your business needs a business continuity plan?

A business continuity plan – whether based on the PPRR model or on another model – provides a formal system of prevention and recovery from potential threats to your business. It helps ensure that personnel and assets are protected and are able to function quickly in the event of a disaster.

Business continuity, business resilience and disaster recovery

While business continuity, business resilience and disaster recovery are closely related, they each play a different role in ensuring a business can withstand and recover from disruptions.

• Business continuity focuses on maintaining critical operations during a crisis. It ensures that essential services, supply chains, and business functions continue to operate, even when faced with sudden and unexpected challenges.
• Business resilience is a broader concept that includes the ability of a business to adapt, recover, and grow stronger after disruptions.
• Disaster recovery is a part of business continuity that specifically deals with restoring IT systems and data after a disruptive event – such as a cyberattack or server failure.

A well-structured business continuity plan incorporates elements of all three.

The difference between a business continuity plan and contingency planning

Business continuity focuses on keeping a business operational during disruptions, ensuring minimal downtime. Contingency planning, on the other hand, prepares for specific risks by outlining reactive measures if an event occurs.

A business continuity plan can include information on how to maintain critical operations during a disruption such as a cyber attack, a natural disaster, or a machinery breakdown.

A contingency plan is usually created to help deal with the “worst case scenario”, such as a major supplier going out of business or a widespread IT outage.

Five key inclusions for an effective business continuity plan and management

An ideal BCP example will likely include the following.

1. Scope and objectives: A BCP will outline the departments, functions, and locations that it will cover. The plan also highlights its objectives, such as minimising downtime and protecting assets.
2. Risk assessment and business impact analysis: Risk assessment and business impact analyses (BIAs) are used to identify threats and vulnerabilities as well as potential disruptions.
3. Recovery strategies: The BCP focuses on the resources, personnel, and technology required to restore operations. The BCP also includes the company’s Recovery Time Objective – which is the maximum amount of time that IT systems can be down following a failure.
4. Incident response plan: A BCP includes a detailed plan for incident response that details the steps to be taken during a disruption. This includes communication protocols, roles and responsibilities, and emergency management procedures. Also consider including contact information for everyone involved.
5. Training and awareness: Through training and awareness, a BCP helps employees understand their roles within the business continuity action plan.

What risks?

Businesses can potentially be exposed to a host of disasters that can vary in degree, from minor to catastrophic. This could result in a loss of revenue and higher costs, which could lead to a drop in profitability.

Preventative measures

Take steps to prevent issues from potentially arising. This can be done with things like ensuring your business premises are secure, that your staff are properly trained and aware of what to do in an emergency and having business insurance in place, such as Public Liability insurance.

Develop an action plan

If an incident does occur, it’s helpful to outline the steps neccessary for dealing with the issue.

Things like fire drills, access to first aid kits, a list of emergency contact numbers, and a clear process can help keep the risk of the incident from escalating. Ensure that these steps and processes are regularly communicated to your team.

How to create a small business continuity plan

1. Set the goals of your plan

Your small business continuity plan is designed to protect your employees and assets and to prevent financial loss in the event of a crisis. Some business continuity plans are created as a reaction to a specific incident that occurred. In this case, you may consider focusing on preventing one type of disaster while also considering other types that could disrupt your small business.

2. Create your recovery team and assignments

Create a list of responsibilities before selecting a team to execute your business continuity planning. The responsibilities could include the following:

• A business continuity steering group of select employees from different areas of your business to create a list of all the assets or risks that could be included in the plan.
• A business continuity manager who manages daily responsibilities for the business continuity plan, such as employee education, crisis management and safety assessments.
• Members of the business continuity team, who support the business continuity program manager by following the instructions given by the business continuity program manager.
• Business continuity plan owners are key stakeholders such as HR, payroll, cybersecurity, health and safety, and other individuals who contribute to the business continuity plan for their area.
• Business continuity planners who execute instructions directly from the business continuity plan owners to support the rollout of plans.

3. Determine risks, assets, functions, and impact

The next step in developing your BCP plan is compiling a list of the most common threats and risks to your business, which may include several of the following:

• Fires, natural disasters and power outages
• Public health crises
• Cyber attacks and data loss
• Economic downturns
• Cash flow problems, including bankruptcy
• Licence cancellations, government regulations and legal disputes
• Workplace accidents.

Next, do the same for your most at-risk assets, which may include your:

• Inventory
• Company property
• Brand loyalty and customer relationships
• License agreements
• Data centers
• IT Infrastructure
• Supply chain
• Intangibles, such as brand loyalty and customer relationships.

4. Set mandatory training timelines

You can ensure that your staff are prepared in the event of a disaster, even when key management staff are not present. Training is important for all stakeholders in areas that affect their work. Your cyber security employee, for example, should know who to contact if their data back-up solution fails, even when their department head is on holidays.

After you have completed your risk assessment, ensure that all stakeholders are trained in business continuity. Teaching staff can begin when they are hired, and you may also consider quarterly drills as a reminder. Employee training may cover fire safety, CPR, and other safety issues. In the best-case scenario, you won’t need to activate your BCP plan.

5. Identify vulnerabilities and alternative solutions

After you have created your plan, identify the main vulnerabilities in your business. For example, an ecommerce business may be most vulnerable due to their dependence on a third-party supplier, delays in overseas shipping, or due to a cyber attack.

Consider using a scale of 1-10 to determine the likelihood that each vulnerability will occur. List potential back-up solutions and prioritise each item in your BCP plan according to the likelihood of it occurring.

6. Detail your actions for each vulnerability in your continuity plan

Structure your list of possible fixes into if/then statements with a list that includes potential solutions. A continuity plan in the event of a server crash may look like this:

If our server goes down during a weekend holiday sale, we can still increase our revenue by directing our e-newsletter subscribers to our online store, or by selling product via our social media.

You may also start considering recovery strategies that can get your business back on its feet, while also reducing the chances of the same issue happening again moving forward.

7. Request feedback

By asking for feedback from all stakeholders in your business, you can ensure that there are no stones left unturned in your business continuity plan.

Understanding the risks that make your business vulnerable can help to minimise those risks. A missed vulnerability or a non-working solution can lead to a larger crisis, for which there is no continuity plan or recovery plan.

8. Monitor and test

Once your business continuity plan is in place, it is essential to monitor its effectiveness and test it regularly to ensure that it remains fit for purpose.

Start by scheduling periodic reviews to assess whether any new risks have emerged or if existing vulnerabilities have changed. Your business environment, technology, and regulatory requirements can evolve, so your continuity plan should evolve with them.

Keeping your business running

Another important feature of your business continuity plan is outlining how you will get your business back up and running. Prioritise what needs to be done, what resources will be required, and create an outline of the steps needed to help you get there.

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