What is a Business Continuity Plan?

You know the old saying: fail to prepare, then prepare to fail. This can apply to almost all aspects of life, but it applies particularly to the business world.

The business world is so fraught with challenges and uncertainties that any attempt at success must have a robust plan. Without one, business owners will remain victims to ignorance and circumstance. 

However, you can’t plan for everything. So what do you do when things suddenly go wrong?

In this blog, we’ll outline what business continuity is, how to create a plan for it, and how you can put a plan together that will help your business. 

What is business continuity?

Life’s hard, and things happen. Your car breaks down, your internet shuts off, or you get sick. These are the kinds of things that happen to people every day. Sometimes, these things keep us from doing the things we want to do. 

Similar things happen to businesses. They might experience a cyber attack. Their server location may undergo a power failure. A change of government may change how they run their business. 

However, many people rely on businesses to provide their products and services, even in the face of massive disruption. 

This is business continuity. It is the continuation of the provision of products and services even in the face of massive disruption. 

What is a business continuity plan?

A business continuity plan is an exact outline of how the company plans to continue operating during unexpected disruption. (It is technically different from a disaster recovery plan.) It will contain contingencies for business processes, assets, human resources, and business partners - in essence, any business area that may be disrupted. 

Plans usually contain a checklist of items that can be checked off to ensure that continuity is maintained. These items usually include equipment, supplies, contingency locations, emergency funding, and more. Continuity plans can be long or short-term. 

Why is a business continuity plan important?

While you may know the risks to your business, you may not know the effects certain events will have. Some events may prove disastrous, while others end up being negligible. There is very rarely a standard response for all contingencies. That’s why it’s important to have plans in place to signpost the potential actions you can take when disaster strikes. 

Maintaining business continuity isn’t just important for your clients. You likely have many employees and other stakeholders that rely on your business to remain stable into the future. 

Who should create a business continuity plan?

Business continuity plans are usually created by management - the people who are in charge of setting the strategic direction of the company. These people will likely have the most experience and insight into every aspect of their business and will be able to synthesize the needs and capabilities of each department into a cohesive plan. 

When formulating a business continuity plan, you want to involve people who have knowledge of things like:

• The manufacturing process
• Service provision
• Knowledge of key suppliers
• Regulations related to your industry
• Knowledge of the company’s supply chains
• Distribution processes

How to create a business continuity plan

When creating a business continuity plan, you want to assess all of your business practices to identify any areas of weakness, external threats, and any potential losses that could occur over the short and the long term.

Key processes

First, you need to safeguard your key business processes. These are the processes that are fundamental to the continuation of your business. This might be your manufacturing process if you make shoes, or your IT infrastructure if you deliver software services. Other key processes to your business might include accounting, management, HR, distribution, and sales. 

Company threats

Next, you need to identify the likely threats to your business continuity. It’s better to be exhaustive in this process in order to foresee any contingency. 

Threats to your business continuity will depend on the type of business. If you deliver cloud-storage services online, you are more likely to be vulnerable to cyber attacks. If you own a restaurant or retail location, you’re more likely to be vulnerable to things like fraud, theft, and natural disasters. 

Rank each threat to your business in order of relevance. Common threats to business might include:

• Flooding
• Epidemic sickness
• Power outages
• Cyber attacks
• Fraud
• Fires
• Changes in government

Determining impact

Once you’ve identified the possible threats, you can start determining their probable effect on your business. Developing a business impact analysis will help you figure out how these threats will affect your business and what losses you’re likely to incur. Common impacts could include:

• Decreases in sales
• Disruption to supply chains
• Increase in expenses
• Decreased customer retention
• Decreased customer satisfaction
• Damage to brand reputation

Determining resources

Once you’ve determined your company’s key processes, threats and impact, you’ll need to identify the key resources you rely on for the business to function. Such resources could include:

• Staff
• External contacts
• Data, equipment, and supplies
• Business documents 

Rank these resources in order of importance to determine what you need to have, what you can afford to live without, and the safeguarding measures you have in place to protect them. 

How to test your business continuity plan

The only way to really know if your business continuity plan works is for something to go wrong. However, there are controlled tests you can conduct to test your plan’s efficacy. 

Common types of tests can include table-top exercises, structured walkthroughs, and simulations. 

• A table-top exercise involves key members of the management team conferring, usually in a meeting, about potential weaknesses in the plan and how they can be addressed. 
• A structured walkthrough is when each team member walks through the plan according to how it would impact their unit and making suggestions. Structured walkthroughs usually have a specific threat in mind. You can also incorporate drills and role-playing to test how the team responds. 
• A simulation involves creating the conditions that mimic a threat to the company, involving all the relevant personnel, equipment and supplies. A simulation is useful for determining whether your business can still carry out critical business functions during the event. 

How to improve your business continuity plan

You should test your business continuity plan rigorously, at least once a year. While the plan may stay the same, technologies, events and environments change all the time. Your test must be able to keep up with these changes.

Once you’ve completed your tests, gather as much data as possible, and use that data to make improvements to the plan. Solicit feedback from key managers on what needs to be changed. Conduct tests on a regular basis in order to ensure that the plan remains effective over time. 

Identify weak spots in your business with your EPOS system

For a good business continuity plan to work, you need as much information about your business as possible. Whether it’s sales figures, product performance, or staff performance, you need to be able to see what’s working and what’s not. 

Epos Now’s EPOS systems allow you insight into every corner of your business. 

• Identify your best-sellers and non-sellers to make more informed pricing decisions
• Validate stock against expected inventory levels​
• Track sales, margin, and trends in real-time – and from any device​
• Export to Sage, Xero, Quickbooks and more, so you can keep track of your margin and take the headache out of accounting and taxes
• Customize your reports to see what matters to you​
• Access reports and data from anywhere​
• Track sales, profit, and trends in real-time to understand more about your business​
• Identify your top-performing products and staff members

Contact Epos Now today to find out more about our systems.