Kiwi businesses are still feeling the aftershocks of the COVID-19 pandemic, but it’s reminded businesses of all shapes and sizes how important a continuity plan is.
To use the Scouts’ motto: be prepared.
Small business owners need to be prepared for emergencies – whether that’s an accident, natural disaster, cyberattack, or otherwise – that could hurt their business.
You need to recognise possible threats and, if disaster does strike, understand what will help your business to survive and recover swiftly.
A robust business continuity plan (BCP) allows your business to react swiftly to an event and keep the wheels still rolling.
What is a Business Continuity Plan?
A BCP is a plan that highlights a business continuity team, key risks and how your business can mitigate them.
It’s basically the blueprint for your business, explaining the actions you should take before, during and after an unexpected event occurs.
It should include your key risks, the activities essential to your business, your key stakeholders, and high-level plans following different events.
How do you create a Business Continuity Plan?
Here are steps to help you prepare a BCP that can help protect your business and get you back on your feet faster.
Step one: Risk assessment
Establish a business continuity team with assigned roles to ensure responsibilities are clear when an emergency arises. With that team, ask crucial questions and evaluate the risks your business faces.
You should discuss and document the emergencies most likely to occur and who will help when they do. It’s also a good time to understand required skill sets and staff allocation.
Step 2: Identify your essential activities
Analyse your most profitable activities and where the vulnerabilities are. If those activities were impacted, how soon could you get them back up and running? For example, if you were a pizza-making business and your pizza oven broker, do you have a plan to continue operating until it's fixed?
This analysis should include preparing a business impact assessment (BIA). A BIA predicts the consequences of a significant disruption to your business processes, spotlighting the potential losses that could occur. Several easy-to-implement BIA templates on the internet may help you in the preparation of the assessment
Step 3: Prepare the BCP
Once you have considered your threats and vulnerabilities, it’s time to prepare the BCP.
- Identify your business-critical processes and a target recovery time for each process in various situations.
- Evaluate what specific resources are needed to enable each process to recover.
- Specify the steps needed to restore each process. Have a back-up plan for each key operations. It should include who to contact, what resources you’ll need, and how much it could cost to restore each process.
- Create a checklist that includes contact details of the continuity team, data back-up details, and lists of supplies and equipment. Larger businesses may have back-up sites, and those locations should be recorded in the plan.
Step 4: Test, revise
The BCP needs to be continuously evaluated, tested, amended and maintained so it doesn’t let you down when you need it.
It’s a good idea to test your BCP at least twice a year. This can range from a small group reviewing the whole plan to the disaster team and appropriate people carrying out simulated disaster scenarios.
The testing should be reviewed to see if the BCP needs tweaking. Remember, we’re in a rapidly evolving world and emerging risks continue to arise. They should be evaluated to see if they need to be included in the plan and countered.
Do you have the right cover?
Kiwi businesses have experienced a pandemic, natural disasters, rising cybercrime and many other unforeseen circumstances over the past few years.
It’s reminded us that preparation is key – and can be the difference between keeping your doors open.
Work to create a cohesive BCP to counter emerging risks. It’s also important to work with your insurance broker and make sure you have the right cover for your business when you need it most.
A broker can help you understand your risks and the types of cover your business could benefit from.
Important notice
This article provides information rather than financial advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, and seek appropriate financial advice before you act on any information.
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