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A Business Continuity Plan is the best way to keep your company afloat in the wake of a disruptive event.
Recent high-profile disasters have convinced many companies that they need to focus on Business Continuity Planning. Natural disasters, supply chain disruptions, and even a short power outage or technical glitch generally are unpredictable, and they can paralyze a business.
The best strategy for keeping your company afloat in the wake of a disruptive event, therefore, is to have a Business Continuity Plan in place. This includes guidelines that enable you to resume operations quickly after such an event.
Businesses of all sizes need an actionable plan to prevent unnecessary costs and lost data, customers and revenues — even business failure. However, small to midsize companies may be at greater risk because they’re more likely to lack the internal resources needed to respond and recover from a disruption. When you have a plan and personnel who are properly trained, it’s possible to mitigate risk, reduce reaction times and improve recovery coordination.
This probably isn’t the first time someone has told you that you need a Business Continuity Plan. Finding the time and internal resources can be difficult in today’s fast-paced business environment. Even if you have a plan in place, it may not be actionable. Unless it has been recently updated, it probably won’t be of much help during a disruptive event.
Here’s why creating and maintaining a plan must be a priority: Almost 40% of small to midsize businesses don’t survive an initial catastrophic event. A Business Continuity Plan can help ensure that, should your business face such an event, it will be in the 60% that survives.
Also, it’s becoming more common for customers, insurers, business partners, regulators — even boards of directors — to require companies to have continuity plans. Not being able to comply with these requests can impact revenue and services.
The best reason for creating and maintaining a Business Continuity Plan, however, is the confidence that comes with having a usable, effective plan in place.
Business Continuity Planning may sound overwhelming. But it doesn’t have to be. You can treat it as an ongoing initiative – completing steps at a comfortable pace and retaining outside assistance as needed.
Typically, there are three phases to business continuity planning:
Phase 1. This involves an initial assessment, which includes analyzing your company’s risk profile and, if you have one, your existing Business Continuity Plan. The goal of Phase 1 is to identify the biggest threats to your company’s day-to-day operations.
Phase 2. Here you develop and implement the plan. The goal is to create a detailed plan with a checklist of actionable items. These items range from notifying employees, to retrieving electronic files remotely, to moving operations to a new location if needed.
Phase 3. The final phase involves training, testing and maintenance. Without training and testing, your plan may prove ineffective should you need to execute it. And even the best plan becomes inadequate if it isn’t kept current. An employee departure or IT network upgrade could make major revisions to your Business Continuity Plan necessary.
Fringe Benefits of a Business Continuity Plan
Even if disaster or disruption never strikes, a comprehensive Business Continuity Plan can benefit your company by helping to reduce overhead and improve profits and employee and customer relations.
The essence of continuity planning is empowering your business to react, respond and recover from disruptive events quickly. Your company will need to examine how it operates. During this process, there’s a good chance you’ll discover opportunities to improve operational processes. This could lead to lower equipment, personnel and operating costs.
Other benefits include:
Be ready, don’t delay
Talk to a CBIZ professional about developing a plan that addresses your company’s specific risks, concerns and priorities. Our goal is to ensure that you thoroughly understand and are comfortable with your plan so that you’ll be better prepared to handle the toughest business continuity challenges. Our project approach isn’t complicated, and it uses a flexible implementation strategy that aligns with your budget needs.
Robert Cole is the Tax Practice Leader in the Salt Lake City office of CBIZ MHM, LLC. He is a CPA specializing in Corporation, S Corporation, Limited Liability Company, Partnership, Trust, Estate and Individual taxation. He receives great satisfaction through consulting with family-owned businesses to establish an efficient business structure and purposeful succession plan, while minimizing the tax burden and maximizing overall profitability. Robert also specializes in IRS representation and divorce litigation support. He can be reached at 801.364.9300 or firstname.lastname@example.org