Health insurance is one of those things you need to have, but hope you never have to use. For business owners, the same can be said about Business Continuity Plans.
Business Continuity Plans, or BCPs for short, is the process of creating systems of prevention and recovery “to deal with potential threats to a company.”
Creating a BCP is a necessary evil no matter what industry you work in or how big your organization is. A subset of risk management, the plan is a proactive approach to dealing with threats as small as a computer virus, and as big as natural disasters, like hurricanes. (Read our blog on 3 Things Every Business Owner Needs to Do Before Hurricane Season here).
The structure of the BCP and what is included is straightforward and easy to follow. Overall, the plan should outline a wide, relevant, range of disaster and threat scenarios. Additionally, it will include steps the business will take in any particular scenario. Several key players (such as executive team and even investors) should be involved in constructing the plan, with the overarching goal being to minimize potential threat and harm.
Generally speaking, creating a BCP involves four main components (which we will discuss in further detail below):
- Business Impact Analysis (BIA)
- Threat and Risk Analysis (TRA)
- Impact Scenarios
- Recovery Requirement
Business Impact Analysis
This is the first step in creating a BCP. The analysis identifies the effects of disruption in business functions and processes. Using the analysis, key players are then able to make informed decisions about recovery priorities and strategies.
Threat and Risk Analysis
After creating the BIA, the next step is identifying all of the potential threats that your company may face. Depending on what sector or physical location you are in, the list of threats and risks will differ from other organizations. For example, if your brick and mortar is stationed in Florida, it is highly unlikely that you would list “snow storm” as a potential risk.
Some examples of possible threats include:
& many more.
An “Impact Scenario” is exactly what it sounds like. After you and your team have finalized the BIA and TRA, respectively, it’s time to put together a few impact scenarios. These documents support the development of the overall business recovery plan.
In the event that one of the aforementioned threats occurs, you need to act fast. It’s not enough to identify the threat in the BCP, you also need to have a strategy in place if the hypothetical scenario happens.
Start with the threats most likely to occur in your business and create thorough impact scenarios for each one. For the lesser-likely threats, it’s good to have an idea of what to do, but perhaps not as important to get into the weeds with every detail.
Finally, the last step in creating a comprehensive BCP is Recovery Requirements, i.e. what is needed in order to fully recover from each of these threats?
For instance, for an office-based company (aka an organization with a brick and mortar) that offers IT-services, recovery requirements may include the following: laptops, desktops, a modem for wireless Internet, and more.
Creating a good Business Continuity Plan can be a tedious task. But it is one that ultimately pays off in the unfortunate event that you ever need it. In fact, a 2014 study conducted by Boston University reported that, “for every $1 put into an emergency management plan,” it will prevent $7 of loss.
Recruit your best guys and gals to join you in assembling a solid strategy. Together, you will define potential risks and threats, and determine the best course of action for each of them. We can help assemble your BCP Strategy. Call us today for a Free Assessment.