How to build a business continuity plan

Whether your business is affected by fire, flood or simply by a key supplier going out of business, disruption comes in many forms. But a business continuity plan can help you bounce back from a crisis and avoid devastating consequences; here’s what to consider.

• What is a business continuity plan?
• How do I build a business continuity plan?
• Embed your business continuity plan
• Key features of effective business continuity plans

What is a business continuity plan?

It’s simply a plan of action that will enable your business to function if something goes wrong. The ultimate goal of any good business plan is to ensure that no matter what the disruption is, you can get back to work with minimal disruption to your core functions, reputation, and long-term viability.

Plans should cover all aspects of your business, including HR, finance, IT, manufacturing, stock management, and sales.

Is it the same as a disaster recovery plan?

Business continuity plans aren’t the same as a disaster recovery plan, but they are easily confused.

The fundamental difference is that business continuity plans are focused on keeping your business running during disruption. Disaster recovery plans focus on reinstating specific key functions (typically IT and data recovery) after a major disruption.

The most robust business continuity plans will include a disaster recovery plan.

Who should be involved in creating a business continuity plan?

Successful business continuity plans are ones that have the full support of key stakeholders – for example, managing directors and senior leadership teams. This ensures that plans will be followed through both in principle and financially.

Remember that a business continuity plan is your roadmap through major disruption so they should be clear and simple to follow. After all, the last thing you need is a complicated agenda that only makes the situation more stressful. With that in mind, they should also be regularly checked and updated as your business grows or its needs change.

How do I build a business continuity plan?

Needless to say, the best-case scenario for your organisation is avoiding business interruption in the first place, but building a robust plan provides a safety net, should you need it.

Your plan will be unique and specific to your business so don’t assume it needs to be complex if you’re running a micro-business or operate as a sole trader. The important point is that it should be comprehensive in relation to your activities.

It should be written clearly and with minimal use of jargon. The easier it is to follow, the quicker it can be implemented. If it helps, a visual diagram can also be added.

Aspects to consider in your business continuity plan include:

Areas of vulnerability

The first step is to identify areas of vulnerability and risk assess your business. This could be anything from large customers defaulting, business rates increases, damage to premises, logistical or staffing issues, and cyber-attacks.

It’s worth identifying what is the most likely threat or risk, and what might have the biggest impact (they might not be the same). If you’re a sole trader or work from home, your vulnerabilities might include illness, having your laptop suddenly stop working, or even accounting for rising energy prices.

Including consequences (such as loss of sales or income) can also help you factor in the financial impact. Knowing this in advance can make it easier to budget and enable you to build up a contingency fund that you can tap into if needed.

Identifying business processes

Set out all your business functions and identify specific processes within each. Be clear about how teams interact, both internally and with customers and suppliers. Knowing and understanding the detail will help you work out what equipment or software you might need if employees had to work from home at short notice.

Areas and functions to consider, include:

• Stock ordering and management
• Customer communication (marketing)
• Manufacturing
• Logistics
• Finance and accounting
• HR

Determine your key resources

Your key resources are the people and things that are critical to the functioning of your business, so it’s crucial to work out who you can call on in a crisis. Include any vital paperwork such as contracts or customer data and equipment and ensure these are backed up or duplicates stored in another location.

Don’t forget to include external contacts including contractors, suppliers, and advisors who can give you support (such as a solicitor or accountant). Needless to say, any contacts list you have should be kept up to date to avoid any last-minute panic.

Build a business continuity team

It’s a good idea to have a core team of employees who take ownership of your business continuity plan. Ideally, they should be representatives of each core business function or process.

This core team should also be responsible for updating the plan and circulating it to team members, ensuring that everyone knows what part they play.

Arrange business interruption insurance

Business interruption insurance covers loss of income in the event of a crisis and should be part of your full business continuity plan. Your broker or insurer’s details should also be on your essential contacts list.

Be clear about what your policy covers as policies do vary, also be aware of any exclusions or conditions you may be expected to meet (such as installing security software for sensitive material in case of hacking).

Embed your business continuity plan

Making sure your business continuity plan is embedded and understood by all your employees is another key part of ensuring its success. While you’ll hopefully never need it, it is a critical component in ensuring your business runs as smoothly and effectively as it possibly can.

Your plan should be included in any training and induction manuals you have. If you can, rehearse scenarios to help you identify any gaps or inefficiencies that can be improved.

Learn lessons and keep a logbook

Just as your business is likely to change over time, so too will your business continuity plan to reflect that.

If you ever need to action your plan, don’t be afraid to keep notes on what does and doesn’t work. Learning real-life lessons is one of the most effective ways to hone your plan, allowing it to develop in a way that’s completely tailored to your business.

Key features of effective business continuity plans

Running a business means that putting a business continuity plan together might seem like an impossible task, but focusing on key elements can simplify the task:

• Understand business vulnerabilities and risk management
• Identify and understanding core functions and processes
• Identify key resources and set up a business continuity working group
• Keep an essential contacts list up to date

However, if you’d prefer to speak to an expert, Alan Boswell Risk Management can help. Our risk management team offer a range of services, providing you with support and advice for peace of mind. We can also provide tailored business interruption insurance to help you get your business back up and running should you need it. For further information contact us on 01603 967900.