28 September 2021
6 min read
Please be aware that this is a guide only and you should seek specific advice for your business*
A business continuity plan is an essential tool for understanding where your business might be vulnerable to disruption, and what steps you can take to reduce these risks. As the coronavirus pandemic has shown, unexpected disasters can strike at any time with far-reaching consequences for businesses. That’s why putting a business continuity plan in place is so important.
The threats facing your business could be global in nature, like a pandemic, or unforeseen events like flooding or fire at your premises. Other threats include utility outages, cyber-attacks or fraud.
If you don’t have a plan in place for dealing with these events, it may take you longer to recover from the disruption – or you may have to close completely. An effective business continuity plan will allow your company to respond quicker so that you can adapt to the situation and keep operations going in the best way possible.
Drawing up a business continuity plan is a step-by-step process that should cover every aspect of your company. You can find examples of business continuity plan templates by searching online. Our partner organisation, the Federation of Small Businesses, also provides members with a free Business Continuity Planning kit from FSB Insurance Service.
Firstly, make a list of the functions and processes that have highest potential operational and financial impacts on your business. This will help you to see which threats pose the greatest risks. For example, if you’re an IT services business that holds large amounts of customer data within your internal database, you could be particularly vulnerable to a cyber-attack. On the other hand, if your business is a retailer that has significant amounts of cash tied up in stock, your biggest threat might be from a fire or damage caused by a natural disaster.
Prioritise your business functions in order of importance so you know which parts of your business to prioritise and plan contingencies around.
Once you’ve identified your key functions, you can conduct a business impact analysis (BIA) to understand the operational and financial impact it would have if those business functions and processes were disrupted. This information can then be used to develop a recovery strategy for your business. This could include an estimate of the sales you would lose if you could no longer serve customers, or the higher costs you would have to pay to get operations up and running again. Remember to take into account those impacts that you can’t quantify too, such as a fall in customer satisfaction or loyalty.
Your business impact analysis template will help you to understand how resilient you are to these threats, and how much time you have to recover your key functions before your business is no longer able to operate.
When things go wrong, you will need to implement a recovery strategy to get your business back to normal. This includes key personnel such as business directors, office managers or those managing the most important client accounts. Ensure the contact details of all key employees are listed in the business continuity plan, including how to reach them during out of office hours. Similarly, make a list of external contacts such as suppliers, distributors, IT consultants and utility companies so that you’re ready to contact them in times of emergency.
You should also note down the equipment your business can’t do without, such as machinery, databases or software, and essential documents like your business banking information and legal papers. Make separate copies and store them somewhere safe.
Now that you understand the risks and the resources you will need to manage disruption within your business, you can start to plan contingencies. For example, if certain equipment is essential to how your business operates, think about how you would access alternatives in the event of loss or damage – such as by renting the equipment from a different supplier. Also think about where your company would operate from if your premises were no longer accessible following a disaster.
Other contingencies might include backing up your essential data and IT systems using separate backup site locations. This could prove invaluable in the event of a cyber-attack or outage. Think about the bigger financial picture too, and the extra support your business might be able to call upon during emergencies. This could include government-backed support packages, such as those provided to businesses during the coronavirus pandemic. List the support options that are relevant to you within your business continuity plan.
Finally, make sure that sure that all key personnel within your business have access to the business continuity plan. This could involve setting up a business continuity team, where each person has a clearly defined role and set of responsibilities in the event of a disaster or disruptive event. Give a copy of the plan to each member of the team, to be kept in a safe place.
Scrutinise your plan on a regular basis by testing it against different scenarios with your business continuity team. This will help you to understand the effectiveness of the plan in different types of disasters, and whether there are any gaps that you need to update.
Once you’ve got your business continuity plan, don’t simply leave it to one side and forget about it. The potential threats facing businesses are evolving all the time, so it’s wise to review your plan at least once a year and check that it remains up to date.
Business continuity planning is one of several important processes that every business should put in place. Here, we’ve put together a guide of other things to think about when managing your business finances, from opening a business bank account, to keeping on top of your bookkeeping.
At The Co-operative Bank we care about you and your business, which is why we’ve created a number of these useful guides to help you.
If you’d like to learn more about how to manage cash flow, our guide can provide support.
If understanding asset management is something you’d like to learn more about, then we’ve created a guide for you here.
If you’d like support on invoicing, you can find our guide on chasing unpaid invoices here.
For more helpful support and resources, our Business Exchange hosts a wide range of content tailored to you and your business.
*While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by The Co-operative Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances. This is merely a guide and each business is unique in its requirements. Specific advice should always be sought in each instance.