Unplanned events can have a devastating effect on small businesses. Crises such as fire, damage to stock, illness of key staff or IT system failure could all make it difficult or even impossible to carry out your normal day-to-day activities. Show
At worst, this could see you losing important customers - and even going out of business altogether. But with good planning you can take steps to minimise the potential impact of a disaster - and ideally prevent it happening in the first place. This guide will help you to identify potential risks, make preparations for emergencies and test how your business is likely to cope in a disaster.
Why you need to plan for possible crisesIt's essential to plan thoroughly to protect yourself from the impact of potential crises - from fire, flood or theft to IT system failure, restricted access to premises or illness of key staff. This planning is very important for small businesses since they often lack the resources to cope easily in a crisis. Failure to plan could be disastrous. At best you risk losing customers while you're getting your business back on its feet. At worst your business may never recover and may ultimately cease trading. As part of the planning process you should:
For example, if you're reliant on computer information, you should put a back-up system in place so you have a copy of key data in the event of a system failure. Benefits of a business continuity plan A carefully thought-out business continuity plan will make coping in a crisis easier and enable you to minimise disruption to the business and its customers. It will also prove to customers, insurers and investors that your business is robust enough to cope with anything that might be thrown at you - possibly giving you the edge over your competitors. Crises that could affect your businessDepending on your business' specific circumstances, there are many possible events that might constitute a crisis:
Though some of these scenarios may seem unlikely, it's prudent to give them consideration. Assess the possible impact of risks on your businessYou need to analyse the probability and consequences of crises that could affect your business. This involves:
This kind of analysis should help you to identify which business functions are essential to day-to-day business operations. You're likely to conclude that certain roles within the business - while necessary in normal circumstances - aren't absolutely critical in a disaster scenario. Likelihood of risks occurring It can help to grade the probability of a particular crisis occurring, perhaps on a numerical scale or as high, medium or low. This will help you to decide your business' attitude towards each risk. You may decide to do nothing about a low-probability crisis - although remember that it could still be highly damaging to your business if it occurred, e.g. a terrorist attack. Potential impact of a crisis To determine the possible impact of a crisis on your business, it can be helpful to think of some of the worst possible scenarios and how they might prove debilitating for the business. For instance, how could you access data on your customers and suppliers if computer equipment was stolen or damaged by a flood? Where would the business operate from if your premises were destroyed by fire? It's essential to look at risks from the perspective of your customers. Consider how they'd be affected by each potential crisis. Would they be likely to look for alternative suppliers? Consider whether you would be able to keep to service-level agreements (SLAs) if a particular crisis occurred - and what the consequences might be if you couldn't. Minimise the potential impact of crisesOnce you've identified the key risks your business faces, you need to take steps to protect your business functions against them. Premises Good electrical and gas safety could help protect premises against fire. Installing fire and burglar alarms also makes sense. Think what you would do in an emergency if your premises couldn't be used. For example, you might suggest an arrangement with another local business to share premises temporarily if a crisis affected either of you. Equipment/machinery If you use vital pieces of equipment, you may want to cover them with maintenance plans guaranteeing a fast emergency call-out. IT and communications Installing anti-virus software, backing up data and ensuring the right maintenance agreements are in place can all help protect your IT systems. You might also consider paying an IT company to regularly back up your data offsite on a secure server. Printing out copies of your customer database can be a good way of ensuring you can still contact customers if your IT system fails. People Try to ensure you're not dependent on a few staff for key skills by getting them to train other people. Consider whether you could get temporary cover from a recruitment agency if illness left you without several key members of staff. And take health and safety seriously to reduce the risk of staff injuries. Insurance Insurance forms a central part of an effective risk-management strategy. Plan how you'll deal with an emergencyYou should draw up a business continuity plan setting out in writing how you will cope if a crisis does occur. It should detail:
Making the most of the first hour after an emergency occurs is essential in minimising the impact. As a result, your plan needs to explain the immediate actions to be taken. Consider whether you'll need to give staff specific training to enable them to fulfil their responsibilities in an emergency situation. Ensure all employees are aware of what they have to do. Arranging the plan in the form of checklists can be a good way to make sure that key steps are followed. Include contact details for those you're likely to have to notify in an emergency such as the emergency services, insurers, municipal services, customers, suppliers, utility companies and neighbouring businesses. It's also worth including details of service-providers such as glaziers, locksmiths, plumbers, electricians, and IT specialists. Include maps of your premises' layout to help emergency services, showing fire escapes, sprinklers and other safety equipment. Set out how you'll deal with possible media interest in an incident. Appoint a single company spokesperson to handle questions and try to be positive in any statements you issue. Ensure staff, customers and suppliers are informed before they find out in the media. Finally, make sure hard copies of your business continuity plan are lodged at your home and at with your bank and at the homes of other key members of staff. Test your business continuity planOnce your plan is in place, you'll need to test how well it's likely to perform in the event of an emergency. Although by their nature crises are hard to simulate in a rehearsal, you can assess your plan against a number of possible scenarios in a paper-based exercise. Think about the things that would cause most disruption and that are most likely to happen to your business. Then make sure that your plan covers each of the risks. Ask yourself the following key questions:
Make some telephone calls to check that the key contacts and phone numbers that you have given are correct. Having to find the right number after a crisis could use up valuable time. Keep your plan updated Remember to update your plan regularly to take into account your business' changing circumstances. If you move into new premises, for example, you could face an entirely new set of risks. You'd need to draw up new maps for the emergency services and amend any contact numbers necessary. You should test your plan regularly, even if your business hasn't undergone significant changes. You can also consult the following guide:
Original document, Crisis management and business continuity planning, © Crown copyright 2009 Our information is provided free of charge and is intended to be helpful to a large range of UK-based (gov.uk/business) and Québec-based (infoentrepreneurs.org) businesses. Because of its general nature the information cannot be taken as comprehensive and should never be used as a substitute for legal or professional advice. We cannot guarantee that the information applies to the individual circumstances of your business. Despite our best efforts it is possible that some information may be out of date. As a result:
Which type of plan is designed to keep an organization running in the event of disruption?A business continuity plan (BCP) is a document that consists of the critical information an organization needs to continue operating during an unplanned event. The BCP states the essential functions of the business, identifies which systems and processes must be sustained, and details how to maintain them.
What is planning to ensure the continuation of operations in the event of a catastrophic event?Business continuity planning is typically meant to help a company continue operating in the event of major disasters such as fires. BCPs are different from a disaster recovery plan, which focuses on the recovery of a company's IT system after a crisis.
What are the types of business continuity plan?As discussed earlier, there are five types of business continuity plans: crisis management, crisis communications, emergency response, IT disaster recovery, and business continuity.
What are the three continuity strategy plans?Companies must separate business continuity planning into three phases: planning and prevention (resolve phase), disaster response (respond phase) and, return to normal (rebuild phase).
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