According to an entrepreneur article published in January 2021, 20% of small businesses will fail in their first year of operation. This is on top of 50% of them failing within the five-year mark.
While the reasons for these failures vary between cashflow issues and leadership, one of the key issues revolves around company’s inability to handle unexpected problems. The latter is more ambiguous as it can stretch from cybersecurity threats to anything else.
Regardless, business owners need to answer the question of when something doesn’t go as planned, how does the business respond? Based on that article, it’s clear many don’t have an answer at all. However, that situation can be solved by simply having a business continuity plan (BCP). It’s an invaluable tool that will allow any business to bounce back.
What Is A BCP?
BCPs are a set number of protocols and strategies that define how a business will respond to a threat, disaster, or emergency. Consider it a backup plan that outlines what to do if the worst happens.
This plan should cover every aspect of an organization. It should cover tech departments and what human resources should do along with how key assets should be dealt with. It’ll also have a list of protocols that define how to respond in situations such as:
- Natural disasters
- Equipment failures
- Financial or cash flow problems
- Man-made disasters
The purpose of every BCP is to have high availability of required resources. This allows companies to keep going even after an emergency has taken place.
These are crucial as failure can be costly as well. IBM estimates that infrastructure failures cost businesses on average $100,000 per hour. That cost is mitigated through a BCP as it minimizes the effects of a failure.
5 Steps To Creating A BCP
Step 1: Perform a risk assessment
The only way to prepare for something is to know what the problem can be. As such, it’s best to do a risk assessment of what a business could face. Included in that risk assessment, there should be assessments for:
- Trends and market movements
- Business infrastructure
Once the list is done, work through it to prioritize the risks based on odds of it impacting the business. For example, if the business is situated in an area that is known to have earthquakes or flooding, place that at a higher point than issues related to stakeholders – especially if they are internal stakeholders.
Overall, this list gives business owners an idea on what to address first.
Step 2: Identify critical functions and have a recovery plan for each
Now that the risks are understood, the next thing is to time them to what their supposed income could be. To do this, it helps to know the critical functions for the business. What does the business need to provide goods and services to customers?
The answer to that question will point out the most crucial parts of the business that need to be intact for the business to continue. Look at each of those functions and from there, ensure there is a way to recover them.
What this can look like is creating backups of crucial data, allowing employees to work from home, or even maintaining a second location or backup hardware stock.
Repeating that process for each of those functions will solidify the plan further. The same can be said of identifying the level of risk it faces and to ensure swift recovery in the face of an incident.
Step 3: Define emergency roles
Employees play a key role as well. In fact, these people are often the source for businesses recovering rapidly and enable these plans to be effective and efficient. With that in mind, businesses can leverage this further by assigning roles to key staff members for each situation outlined in step 1.
By defining who the emergency coordinator is and what they need to do is crucial, so they are prepared to handle the situation if need be.
Do note that in or for employees to handle problems in some situations, they may require additional training or specific licenses. Also account for situations where protocols or reallocation may be needed, especially when a business has multiple locations.
What is important in the end is that everyone has been given instructions to follow in the event of an emergency.
Step 4: Document the plan
No BCP is effective if it’s locked in a desk somewhere! Not only should this plan be documented, it should be easily accessible to all staff and people can easily follow it when necessary.
Also make a point of having copies of that plan stored in other locations to ensure it’s not totally lost if disaster strikes.
Step 5: Test it often
No situation is going to follow the precise steps that are outlined. Furthermore, with more solutions comes more problems that can result in revisiting a BCP. Therefore, to ensure consistency and effectiveness, test it out multiple times.
Instead of getting the entire staff to follow the plan all the time, it’s better to have a small team revisit the BCP often. As far as testing it, it should be consistent and following significant changes to the industry such as new regulations. Testing will show companies various gaps and allow leaders to make updates to the plan.
BCPs Protect Businesses
Business leadership is more than just building and inspiring teams. It requires focus on protecting the business so that teams can keep doing what is needed from them. This is what a BCP does.
A good BCP can define every protocol that has to be followed in the event of an emergency. By creating one, it puts businesses in a better position to lead the business through any crisis.
Even though a BCP isn’t a simple task – especially for small businesses that have limited resources – it’s bound to come in handy and well worth the investment.
Mtek Digital Managed Business Service
Mtek Digital provides help with virtually any business technology requirement. From IT services to Web and Video Marketing, we’re capable of servicing the tech industry throughout Canada. Contact us today.