How to Build a Business Continuity Plan
Having a strong continuity plan in place means that a natural disaster doesn’t have to be a complete catastrophe for your business.
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The historic flooding of Nashville in May 2010 was an unsettling reminder to business owners that disasters can and do happen. For a small business in particular, picking up the pieces and starting to serve customers again can be especially difficult after a major disruption. An estimated 25 percent of businesses never reopen their doors following a major disaster, according to the Institute for Business & Home Safety.
Most companies have insurance policies designed to cover the more obvious financial ramifications of incidents like fires, floods, or hurricanes. What insurance won't protect, however, is your reputation or market share, particularly if the disaster is specific to your business, such as a fire in your office building. Customers are likely to go to your competitors when you fail to provide products or services and are unable to notify them.
Establishing a framework for your employees to tackle the nightmarish process of notifying customers and reinstating timely delivery of products and services after a disaster is an essential long-term strategy for your business. It's known as a business continuity plan, a document that lists emergency contact information, backup suppliers, and a detailed recovery plan. Reaching the end goal of a written plan is the culmination of a long process involving many different parties. Here's how to get started.
Building a Business Continuity Plan: Size Up Your Risks
Business continuity planning begins with assessing how potential risks to your business will impact your ability to deliver products and services. By having a financial analysis of the impact of those risks, you will be able to prioritize the steps you take to repair your business after a disruption. 'It's an analysis of the impact to the business of a lack of something, like technology, people to do the job, or something as simple as a certain machine,' says Ted Brown, president and CEO of KETCHConsulting, a Waverly, Pennsylvania-based firm providing a range of disaster recovery services. 'A lot of people don't do that and end up investing in protection in the wrong areas.'
Start by defining what those risks are so you can look into ways to mitigate them. You can't plan for everything, but you should be aware of the risks that are statistically likely to happen to you, based on factors such as geography. 'The odds of a hurricane hitting a company on the coast of Florida are very high,' Brown says. 'The odds of one hitting Tulsa, Oklahoma, are very low.' You should also look around your workplace for smaller physical risks, he says, like having a hot plate near paper, a potential fire hazard.
According to the Federal Emergency Management Agency (FEMA), fire is actually the most common hazard to businesses. Here are a number of relatively simple steps FEMA advises you can take to limit fire risk:
- Meet with your local fire department to have your facility inspected for fire hazards and to make sure it meets all fire codes and regulations.
- Hand out fire safety information on how to prevent fires, how to contain fires, how to evacuate the building, and how to report fires.
- Conduct evacuation drills.
- Talk with your insurance carrier as well to find out what measures they recommend and to see if they offer fire prevention training.
- Organize a safe disposal place for potentially combustible materials.
If you're in a geographical area where tornadoes or hurricanes are likely, FEMA recommends taking the following precautions:
- Talk to local emergency departments about the community warning system and procedures, and any evacuation plans.
- Work with a structural engineer to establish a safe shelter facility for personnel in your building. (This should be underground in the case of tornadoes.)
- Design an effective evacuation plan and communicate it to employees.
- Survey your building, and make plans to protect outside equipment. Make sure you have proper protection for your windows. (Permanent storm shutters are a safe bet.)
Flooding also can't be overlooked. Here's what FEMA recommends:
- Review the geography of your building. Are you located in a flood plain? What's the elevation of your facility in relation to the closest river? Is there a history of flash flooding in your area? What's the fastest way to higher ground?
- Talk to your insurance carrier about flood insurance.
- Hire a professional to flood proof your facility. There are a variety of options and costs to doing so, from structural changes like reinforcing walls to resist water pressure and installing permanent pumps to remove water. There are also simpler precautions, such as buying battery-powered lighting and sandbags.
Dig Deeper: Helping Your Clients Plan for the Unplanned
Building a Business Continuity Plan: Arrange Alternatives
Now you need to think about who will be affected by your business disruption. Have a list of the contact information of your top customers and clients, so you can personally contact them about the situation and reassure them that you are well on your way to restoring operations. A good idea is to encourage employees to keep important contact information on their personal mobile phones. 'Who are the people we need to get in touch with the most and keep informed?' Brown says. 'The last thing you want is the media telling your customers what's happening to your business.'
You can't begin to recover your business without the right people. Determine which employees are critical to the functioning of your business, and organize an emergency contact list. The names on that list shouldn't be limited to executives; you need a diverse mix of personnel and a clear succession of management in case some employees are unable to work. If your office becomes inaccessible, you should have a prearranged meeting point. Also, find out who's able to work from home.
The trick is to be redundant. Arrange backup vendors or suppliers to provide you with critical resources and materials. Make sure you have a technology recovery plan, and that you have backed up important IT data like customer records and corporate documents. Back them up more than once, and arrange a secure, off-site storage location. Make sure the appropriate people have knowledge of relevant passwords and codes, and that you have backup tech vendors arranged.
