Companies face many risks that may disrupt the day-to-day operation of the business. These incidents can range from IT system failures, power outages, fires, floods, supply chain issues or major losses to business.
We live in a world where the frequency, breadth and severity of disruption can severely affect businesses, especially those trading across a wider geographic area. The complexity of weather patterns, supply chains, pandemics and technology are all added risks. Business Continuity Planning can help a business recover from both minor and major incidents.
Whilst some incidents such as power outages, Wi-Fi issues etc may be minor and easily fixed, others can literally stop a business from operating for many months with a loss of revenue and potentially a much longer-term loss of ongoing business. How you deal with such incidents could be the difference between your business recovering from a disaster or not.
So, regardless of size, every business should have some form of Business Continuity Plan that you can refer to and enact when the time may come that you need it.
What is a Business Continuity Plan?
A Business Continuity Plan will identify the risks your business faces and the potential impact it will cause. It will detail how your business should deal with each incident, who to contact and what steps you should take. It should help to minimise the stress and panic when something does happen and allow not only you, the business owner, but others in the business to be able to deal with the consequences of any incident.
Many business owners believe they need a highly detailed Business Continuity Plan, that will take up lots of management time to create. However, this does not have to be the case. Your Business Continuity Plan may start life as a simple list of potential risks, initial steps to take when an incident happens and key contacts including contact details of who to call when incidents occur. Having such a short but concise plan is better than having no plan at all.
More importantly your Business Continuity Plan should be circulated and understood by a number of people either in or external to the business and not just you, as the business owner. Imagine for example that an incident puts you as the owner out of action for an extended period of time and the business is reliant on you to survive. This is exactly the type of incident your plan should cover!
Benefits of a Business Continuity Plan
A Business Continuity Plan should:
- Prepare you for the worst-case scenario
- Provide you with an emergency response in the event of disruption
- Improve your business resilience against disruption
- Protect your business in the event of a major incident or disruption
- Deliver the capability to recover as many aspects of your business quicker than if a plan wasn’t in place
- Help to potentially minimise risk by carrying out a risk assessment as part of your planning
- Reduce stress and worry for both you and your employees
Creating a Business Continuity Plan
When creating a Business Continuity Plan, include senior management and key stakeholders in the planning process. Make sure your employees are aware and understand that a plan is prepared and under what circumstances it will need to be put into action.
It is also a good idea to work with your insurance broker to help you to identify and assess risks in the business and check the insurance cover that you currently have in place.
Carry out a risk assessment
Assessing risks in your business should already be something you do regularly, and good insurance brokers will assist you in identifying risks and discover how insurance can cover you for many of these risks. However, not all risks can be covered by insurance and your insurance policies should not be your only business interruption or continuity plan!
The risk assessment should look at some of the following areas:
- People – employees, management, customers, suppliers and business partners
- Premises – power supply, burglary, flood risk, fire risk, equipment, health & safety
- IT – equipment, systems, software, backups
- Financial – cashflow, cash reserves, levels of insurance cover
- Systems and processes – key systems and processes for the business to be operational
- Logistics including company fleet vehicles etc.
- Legal – risks from legal action, indemnity etc.
Get your employees involved in a risk assessment as they may identify risks that you may not consider or be aware of.
What should be included in your Business Continuity Plan?
A Business Continuity Plan should outline procedures and instructions for senior management and employees in the event of a disaster. In an ideal world, every business would have a comprehensive plan, but many businesses start with the basics around people and contact details and build from there.
Ideally, a plan should cover things like:
Risks to the business – this could be fire, flood, IT hacking / cybercrime, major outages, product recalls, supply chain issues, key people leaving or incapacitated or a pandemic etc.
Business impact analysis – look at what is key in terms of the operation of the business, identifying critical assets and functions and determining the effect of their loss. Examples may include key pieces of equipment, key people, IT, access to premises etc.
Who is responsible for what – a list of important people in the event of an incident. This should have a clear indication of who is responsible for which areas of the plan.
Emergency contact details – up to date contact details of staff members, emergency contacts, your insurance broker, key customers and suppliers.
Three stages of continuity & recovery planning
You can also break a plan down into three stages as follows:
Emergency response - procedures that need to be put in place at the time an incident occurs, this may be merely how to evacuate a building dealing with a major accident.
Crisis management - this happens directly after the incident relating to things such as an assessment of damage, recovery options, liaison with key people such as insurance brokers, builders, etc.
Business recovery – longer term details of how you recover including processes and potential timescales.
Check and test the plan
It’s easy to put your thoughts on paper, but if you have time and resources, it is recommended that you test the plan and ensure it works in reality. This may not be possible for major incidents such as a complete loss of a manufacturing plant. If you can test some areas, then do and make changes where necessary.
Conclusion
Companies face a number of challenges and risks today and understanding these risks, insuring against them and planning how to quickly recover from challenges is key to business continuity.
The scope of your Business Continuity Plan will be determined by you and the business. We know that many business owners ‘don’t have the time’ to do a huge exercise in planning. However, if you don’t currently have any sort of plan in place, then begin to work on the basics, such as potential risks, key people, contact details etc in case the worst should happen.
Even the best management team and employees cannot be expected to know what to do when any disaster strikes. Communicating with your employees is key.
Insurance on its own is NOT a business continuity strategy. Work with your broker to look at business continuity and business interruption.
If you would like more help and advice about business risks, business insurance and business continuity and recover, then contact the team at Harborough Portas by calling us on 0116 260 0506 or email: mail@harboroughportas.com.
