Have You Implemented A Continuity Planning Strategy?
August 26, 2021 •Oak Street Funding
Why should a business owner consider implementing continuity planning strategies to run a business? Unfortunately, there are a multitude of natural events that are beyond your control that can directly impact your business.
Unforeseen by many were the wildfires in the Westcoast, riots and protests across the nation, and the ever-lingering COVID pandemic. Once these natural disaster events impacted “other” small businesses, but now they are impacting colleagues you know, or even your own business.
Continuity planning is not solely limited to natural disasters, it is needed for any business disruptive incident and can occur under various scenarios. A more prevalent scenario today involves an employee opening a spam email and inadvertently downloading ransomware that can lock-up every computer on your network.
Another likely scenario is the local power company failing to restore power for days due to the damage caused by a severe storm.
Operating a business can be challenging on a daily basis, but when unexpected events outside your control interfere with operations, the results can be devastating. Situations such as those described, or many others, can occur without warning and may make it impossible to serve your clients for days at a time.
While some of your losses may be covered by business insurance, the loss of revenue and damage to relationships can undo months of hard work. These types of disruptive business incidents can even put an organization permanently out of business.
Continuity planning vs. disaster recovery strategies
Business continuity planning focuses on helping your business survive at moments like these by focusing on continuing or restoring your operations. A continuity plan spells out the needs your business may face in a catastrophic or business disruptive event, along with processes and procedures to keep you operating and minimize the effects of the disruption. With the right continuity plan, you’ll be able to get back to normal operations more quickly.
Some businesses have disaster recovery plans, but those are usually limited to restoring their computers and other IT equipment through planned backups. While a true business continuity plan includes disaster-recovery steps, it goes beyond them to address every aspect involved in running a business, from the role of staff to facility needs, to relationships with other companies, to communicating with clients and other key stakeholders.
Continuity planning can provide a competitive advantage
A well-designed continuity plan does more than simply allow you to reopen your doors more quickly. It can give your business a substantial competitive advantage by providing the opportunity to study every aspect of your operations and look for ways to improve. It can help you identify potential weaknesses you can address before disaster strikes. It allows you to examine your relationships with key partners and how problems with their companies might affect yours. In addition, it makes it easier to plan for potential financial risks.
Most of all, if you're forced to implement your plan and you execute it flawlessly, it can strengthen the confidence of your clients and others in your market, which will enhance your reputation. And, if the catastrophic event affects your entire community -- such as in the case of a hurricane or similar storm -- it can place your business in a leadership role.
What continuity planning strategies entail
Developing your business continuity plan requires a comprehensive look at your business, its resources, your people, and your business partners whose issues could spill over into your operations.
Start by examining your operations and identify the most critical functions -- those elements that are central to your business, such as handling contact with your customers. Some business activities such as marketing to find new customers are important but probably aren't crucial in an emergency. Consider how your team handles those critical functions and how they would be affected if there was some sort of catastrophe. Then develop a plan to address precisely how those functions could continue. Determine the roles each employee could play, regardless of what their regular jobs may be.
Prepare a list of equipment, suppliers, and information such as where your data backups may be found. Determine what type of equipment you may need and where it can be obtained. Identify local contractors you can call to repair any damage to your office or its systems. Include login information and anything else you'll need to continue operations. Your plan won't do anyone any good if there's just one copy that's sitting on your desk, so consider which members of your management team should have a copy at home.
Which threats should you consider?
No two businesses or communities will face the same potential threats, and it’s impossible to consider every potential disruptive event that could occur. But you can develop a list of realistic threats such as natural disasters, cybercrimes, a pandemic, and major outages of utilities serving your business. In some parts of the country, wildfires may be the biggest threat, while in others, it might be hurricanes or tornadoes. The key is to make that list as realistic as possible.
Next, consider how each of those events might affect you, and don't hesitate to envision worst-case scenarios. For example, you might think your office building's sump pump will protect you from flooding, but what happens if you face a significant flood and a power outage simultaneously? The more thought you give to what could happen, the better you'll be able to plan.
Put your continuity planning to the test
The only way to determine if your plan is ready to handle a real-life disaster is to put it to the test. A great way to do this is to take half a day and bring your team members together to run what's known as a tabletop exercise. Think of a complicated scenario and go through the steps each of you would follow as it progresses. Encourage your team to identify gaps or weak points or incorrect assumptions in your plan. As they move through the steps, throw in a complication or two. Perhaps a key staffer is out of town on vacation, or the police won't let you near the office. What would you do? After the exercise, update the plan to reflect what you've learned.
Testing isn’t a one-time step. You should run similar tests at least annually, changing the scenarios and situations. The goals of these tests are to make sure the plan continues to reflect your changing business and ensure your people will be able to follow the plan if it becomes necessary to implement it.
Developing business continuity strategies takes time and isn't necessarily enjoyable, but if your business ever faces a disaster or other significant interruption, having a plan in place will minimize the disruption’s impact and get you back to normal far more quickly. As you develop your business continuity plan, it may also reveal the need for more working capital to ensure your business can quickly pivot during these disruptions.
A growing number of business owners in your industry have turned to specialty lenders like Oak Street Funding for working capital loans. If you are considering such a loan, but don’t know exactly where to begin, please feel free to contact us as we have experts in lending who have helped hundreds of clients with their working capital needs. continuity planning strategies
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