What is a business continuity plan?
A business continuity plan is a written document outlining the steps that must occur after a disaster to maintain regular operations. When you’re planning for business success, thinking about potential problems is part of the process. If you don’t have a continuity plan, you run the risk of being unable to build inventory, ship products or support customers during a disaster.
What’s included in a business continuity plan
When you’re creating your business continuity plan, you should include everything necessary to get your business back up and running quickly. It should include details indicating how to handle or alter various areas of operation during a disaster, including:
- Customer relations
- Employee safety
- Facilities operation
- Data security
- Supplier and subcontractor relationships
- Inventory control
- Shipping procedures
When to implement a business continuity plan
Your business continuity plan is an emergency plan, so the time to implement it is when something drastic occurs that your usual methods of mitigation won’t fix. Some instances when a business continuity plan may be needed include:
- During or after a natural disaster, such as a major weather event or an earthquake
- When your business is dealing with a cyber attack
- After a major power failure or network failure
- In the event of a fire or other localized disaster at your place of business
Benefits of having a continuity plan in place
Having a business continuity plan in place helps reduce down time after a disaster and minimizes losses caused by a disaster. Some other things a continuity plan can do for your business include:
Keeps you running smoothly
The whole purpose of a continuity plan is to help you maintain operations no matter what happens, and planning ahead helps you both avoid potential issues and deal with disasters if they do occur.
Reduces your financial risk
Disasters can cost you money, especially if you lose inventory or can’t deliver items to customers. A continuity plan minimizes the effects of an emergency so you don’t lose everything in a disaster. Having a solid disaster plan is part of good financial management of your business.
Protects your reputation
Disasters that impact customers can harm your reputation even if the event wasn’t your fault. A continuity plan helps you continue serving customers in an emergency so you maintain your good reputation in the industry.
Gives you a competitive edge
If your company has a continuity plan and your competitors don’t, you’re going to be more prepared to meet consumer demand during a widespread disaster.
Protects your employees
Some disasters are deadly, and a business continuity plan can help protect your workforce from danger if the worst should occur. Instead of relying on managers to make split-second decisions about how to react during an emergency, a business continuity plan sets out exactly what to do to keep everyone safe.
Steps to follow to create a business continuity plan
Preparing early helps you react quickly during a crisis, but creating a continuity plan takes time. Breaking down the process into these five steps helps you stay organized while you develop your plan:
Step 1: Conduct an impact analysis on your business
During this step, you should identify critical systems and processes that your business needs to keep operating. Talk to key stakeholders, including members of each department within your company, to find out what each part of your organization needs to maintain normal operations. Determine your overall objectives for continuity, including whether you need specific systems to return to full operation right away or whether some parts of your business can operate at reduced capacity for a while.
Step 2: Identify your business continuity team
Choose specific managers and employees to create and implement your business continuity plan. You may want to hire someone as a business continuity manager to oversee the process. You might also include business continuity under the larger umbrella of operations management in your company and assign this duty accordingly.
Step 3: Compile a formal business continuity plan
Create a formal document that outlines each action and who is responsible for that action during an emergency. Keep this document in an easily accessible location for reference during an adverse event.
Step 4: Gather the resources necessary for plan implementation
If your business continuity plan includes switching suppliers temporarily or rebuilding your facilities after a disaster, make sure you create a list of alternate suppliers and obtain insurance on your facilities to cover the cost of repairs. You might also need to develop alternate manual procedures and processes for things that are usually automated.
Step 5: Implement training and testing of your business continuity plan
Hold regular tests of your continuity plan with all of your employees so everyone knows what to do in an emergency. This helps train your business continuity team and lets you evaluate the plan. You may discover that you missed something essential during the planning and need to revise part of the plan.
Sample business continuity plan template
Here is a sample business continuity plan:
- Business Name: The Widget Corporation
- Department: IT
- Prepared by: John Smith
- Date prepared: June 15, 2020
- Location: 100 Jones St., Clearwater, FL
- Introduction: This part explains the purpose of the continuity plan and how to use it
- Organizational structure: This part of the plan lists the members of the business continuity team and what each person’s role is on the team. It can also include information about departmental support teams that will report to the business continuity team in the event of an actual disaster.
- Scope of the plan: This section describes the scope of the continuity plan, including what departments it covers and the specific risks it addresses.
- Disaster response process: This part of the document outlines the specific steps taken in response to a disaster. It includes sections on how to determine a disaster condition, how to initiate the procedures in the business continuity plan, how to handle public relations involving the disaster and steps needed for damage assessment after the disaster.
- Recovery process: This section lists the steps necessary for returning to normal operation after the disaster. It may include alternate plans for various scenarios so your managers can shift to different suppliers, move to a new facility or start using a backup network as needed.
- Preparation and training: This part of the business continuity plan lists regular steps to take to remain prepared for disasters. It might include a schedule for periodic updates of emergency contact information and annual testing and training.
- Notification list: This section of the document provides up-to-date contact information for everyone who needs notification during a disaster. It might also list a chain of notification to indicate who receives what information first.
- The timeframe for action: This is a detailed timeline of when each part of the response and recovery activities should take place. It should describe what should be happening within 24 hours of the disaster, within a week of the event and within the month after the disaster took place.
- Additional information: In this section, you can include anything not covered by earlier sections, such as information about your suppliers’ disaster recovery procedures, forms for tracking disaster-related expenses and reference documents required to implement your continuity plan.
Business Continuity Plan FAQs
Who is responsible for a business continuity plan?
A business continuity manager is the person who ultimately takes responsibility for the creation and implementation of a business continuity plan. If your company doesn’t have someone in this position, department heads may be responsible for creating continuity plans for their departments.
What is continuity in a business?
Continuity is the resumption or continuation of your regular business activities after a disruptive event or major disaster. It includes all of the processes and procedures necessary to maintain operations.
How do you test a business continuity plan?
You can test your business continuity plan with a physical walkthrough involving all essential personnel or using a checklist that outlines all of the steps each person needs to take during an emergency. Another option is to create a simulation of an emergency event involving all of your workforce where everyone performs their steps in the process as though the real event is happening.