Many times, things can be out of our control. However, though it may feel impossible, those are the best periods to stay proactive, productive, and resourceful — and to focus on all that is still in your control. That’s where a business continuity plan (BCP) comes in.
By developing a clear picture of how different types of problems and stages of crisis can affect your business — whether it be a recession or a natural disaster — and putting a realistic Plan B in place for each of them, you’ll keep your confidence up and business operating through anything you’re faced with.
Read on for everything you should know about a business recovery plan, plus an easy-to-follow template to help you get started.
A business continuity plan is a document that lists essential business information needed to maintain operations and financial viability through an unforeseen or unexpected event. In other words, it’s your professional lifeline.
A BCP typically includes emergency response communication details, critical business activities, and the procedures and resources required to sustain basic functioning through a disruption.
A BCP is one of the most critical components of risk management. Think of it as the central hub for your operation’s vital information during an emergency, outlining all business processes needed for your company to function as well as the logistics required to avoid, or at least manage, the risk of failure through the crises or unplanned event.
Remember: When disaster strikes, you don’t know how your team will react — and even the best members of your team may struggle to keep the lights on. With a BCP with clear instructions and well-documented information, everyone in your organization will have an easier time staying on the same page.
Here are a few instances where a BCP could help:
Not sure how to get started with your BCP? Our business continuity plan template can help. It includes:
Completing a quick business impact analysis lets you prioritize the key processes in your business and then estimate the potential impact of them not occurring. There are four elements that go into a BIA — here’s a quick step-by-step breakdown:
With a BCP, you want to make sure you’re armed with the necessary information to help keep your team members safe. So first, make sure your emergency contact list is up to date. Include all your key contacts, such as employees, technical support, suppliers, emergency assistance, and your banking relationship manager. Then, establish a communication plan for updates and identify who’s responsible for keeping communications going.
Every business has must-haves and nice-to-haves. The must-haves are the necessary processes and resources you need to run your business. This part of the exercise helps you identify them and then rank them in order of importance. Here’s what it may include:
Example: Let’s take the example of a physical store closure. If your store closes, then it has a crucial impact on your ability to sell products and services.
Getting back to normal may take several weeks or more, so you’ll want to look at how the length of downtime impacts your business. For each critical business activity you identified above, estimate its impact on your business over different lengths of time. That’ll help you figure out the maximum acceptable period an activity can be “offline” before critical failure. For example:
Example: Continuing the example from above, a store closure lasting 14 days will have a much different impact on your business than a closure for 60+ days.
For each critical business activity, think about the specific effects a disruption might have on your business. For example:
Example: If your store is closed, you’ll take a hit to sales revenue. Also, you might start selling more from your website, which incurs shipping costs and might raise expenses.
The downtime from your critical business activities might impact customers, finances, and your ability to meet regulatory requirements (if applicable). Estimate as many of these impacts as you can. For example:
Example: If your store is closed, you might not be able to deliver the products or services your customers ordered, causing customer dissatisfaction. The loss in sales revenue would be $X.
Another essential component of a BCP is your designated recovery strategies. These are the alternative measures you and your business could take to recover and restore operations during an unexpected event.
With recovery strategies, you should:
While a business continuity plan is focused on maintaining operations and financial viability, a disaster recovery plan is specific to IT infrastructure, such as restoring technological systems and data access.
Check out these additional resources to help you plan for the unexpected:
In partnership with three expert business owners, the PayPal Bootcamp includes practical checklists and a short video loaded with tips to help take your business to the next level.
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