Did you know that, according to FEMA, almost half of businesses don’t reopen after experiencing a disaster? This makes business continuity planning Particularly relevant over the past year. Ignored, a crisis can cost a company more money than it can afford to recover.
Addressed thoroughly and pragmatically, a business continuity plan (BCP) can eliminate risk from your operation and even allow your business to thrive following a crisis. Today we’re discussing this subject in greater detail for your benefit. Keep scrolling to learn more.
The perfect time is now
Your company can’t wait until you need a BCP to create one. It sounds obvious, doesn’t it? And yet, every year SMEs and large corporations both suffer from having to scramble to act after a crisis occurs.
It’s easy to focus on growth above other considerations. It’s usually quantifiable, with significant data backing up your strategic planning and all the metrics you need to make informed decisions that expand your business. And yet, that growth is only as good as the foundation upon which it stands. With the pandemic shining a light on the gaps in the planning and preparation of so many companies across the world, now more than ever we have an example of just why a BCP should be prioritized before it’s truly needed.
If you’re a decision-maker in your own business or startup, you can act as a decisive protector of the future of your operation by prizing the presence of an up-to-date BCP as much as you do your sales activities. As a silver lining, most planning and implementation efforts for a BCP tend to highlight faults and areas in your business that are ripe for improvement, adding value to an already worthwhile investment.
Reopen or thrive?
With us having established that nearly half of businesses fail to reopen following a significant crisis, we can look a step beyond simply returning to business as usual and consider how a BCP can actually improve your operation once your company emerges from a crisis situation.
A key draw of a practical and thorough BCP is that it allows your company to return to work efficiently following a period of disruption. An important element of this kind of BCP is that you have clear and easily implemented guidance on how to return to regular operation, but we can go a step further.
With your company’s risk profile and means of operation being unique, you have the opportunity to build your business continuity plan in a way that matches its needs while allowing it to react to the environment it finds itself in following a crisis. Critically, a BCP will also cover a corporation’s finances and cash flow, ensuring they have the money and planning in place to respond to new financial limitations or burdens.
An example of this would be an industrial production company. If a crisis occurs that severely disrupts its key product line, it may be the case that the market in which it sells its products has changed after the incident. A BCP can be tailored to create a workflow and process that allows our hypothetical business to adjust its manufacturing priorities. This gives it the option to shift to new products that have a higher market value and desirability than before the crisis occurred.
In doing so, a BCP can allow your company to not only reopen following an incident but to nimbly adjust to the landscape following that incident. By doing this, a period of disruption can be turned into a competitive advantage. This is particularly important if an incident occurs that affects competitors within your industry; a well-crafted BCP will allow a company to resume operations faster than the competition, potentially allowing it to capture a greater market share and to produce positive publicity, too.
Three critical areas of a BCP
Let’s consider now how a reliable plan is broken up and approached. While strategy consultants will vary in their methods, it’s common for discussion around a BCP to be split into three areas.
The response: A crisis has occurred and the most critical period following this is immediately after it’s happened. Particularly important for minimizing and mitigating damage to brand and public image, this area of a BCP involves the very first steps a company will take during a crisis. This can include internally cascading pre-prepared information and data dissemination to PR firms and social media channels.
Management: With the initial stages of a BCP underway, the company now enters the period in which they follow the main body of their continuity plan. With the response stage providing an immediate reaction that mitigates damage, the management phase can concern itself with understanding and scoping the nature and extent of the crisis in question. By doing so, a company with a reliable BCP can quickly assess the impact a given crisis is expected to have – and can implement different subsequent actions according to that impact.
Resuming and recovering: With the crisis scoped and initial actions in place to manage damage and disruption, the final stages of a BCP will focus on how a business can return to regular operation – and how that operation will change following the crisis.
This is a period in which a business will consider how the crisis may have affected its industry and competitors, making it a critical moment in business continuity planning where commercial opportunities can be identified and rapid action taken. This final stage of a BCP will allow a business to restore its cash flow and regular activities while giving it pre-prepared guidance on how to understand the new landscape it finds itself in. Done right, a company can maximize the ‘silver lining’ opportunities available to it after an incident occurs.
Worthy of thought
Every company will experience a serious incident at some point. With finances, brand, and the very business itself on the line following a crisis situation, a business continuity plan is an investment that will bring benefits in the short term while simultaneously minimizing the risk a company is exposed to in the long run.
If that isn’t worth paying for, what is? The Idea Financial team hopes this article has helped. If you are seeking financial assistance for your company, please feel free to get in touch with our team today.