Successful business owners manage their businesses differently. They know that the secret to building a strong business requires investing in its growth. This may be an obvious observation, but a peek beneath the surface reveals the other, unspoken, side of things – their focus on building in resilience measures that minimize the impact of disruptions. Disruptions divert resources which would otherwise be appropriated to the business’ growth.
Over the last year, there was a lot of talk about the importance of building resilient businesses, but many smaller businesses remain clueless as to what that means in practice.
If you imagine that your business is a plant, resilience would be the roots and growth would be the branches. When storms hit unexpectedly, although the leaves and branches may be shaken and bent, the strength and depth of the roots determine whether and how quickly the plant recovers. The biggest impact that a disruption could have to a business is usually on its revenue. This highlights the value of preparing your business for unexpected events.
Take for example the owner of an online recruitment company in her early 20s who, after an unplanned 2-week stay in the hospital, recognized that she needed to “do something” after realizing that her business couldn’t run without her. Or the processed foods business owner and new father who wanted to “put something in place” so that his business could keep providing for his family and employees even if something unexpected happened.
The “thing” that they and many other business owners were seeking, is the same “thing” that banks, hospitals, and major corporations are already very familiar with. Due, in some instances, to mandates by the government, some organizations are required to have a Business Continuity Plan in place to help them minimize the impact of unplanned disruptions on their operations.
Even before the most recent pandemic, a study performed in 2013 by CMI indicated that 87% of companies with a Business Continuity Plan in place experienced reduced impact from disruptions, 86% reported improved resilience and 82% indicated that they recovered more quickly from a disruption than their peers.
The truth is that 1 in every 2 businesses will face a major unplanned disruption in its lifecycle. These 5D’s as they are typically referred to, are death, disability, divorce, distress and disagreement. The recent pandemic would fall under the category of distress.
While a Business Continuity Plan cannot insulate a business from disruptions – nothing can -, it provides a contingency plan for ensuring that the business can respond confidently and recover quickly from unplanned disruptions.
The height of an incident is not the most appropriate time to be formulating a well-thought-out response. Appropriate contingencies are usually considered ahead of time and documented in the form of a Business Continuity Plan.
Here are some key components in a Business Continuity Plan along with a few steps that you could take today towards getting started:
- People: as with any emergency, employees will need to know who to contact. Similarly, the plan identifies the persons who would be ready and able to take charge along with their back-ups and multiple ways to contact them. It is also advisable to make these persons aware of the fact that they may be called upon and educate them on the role/responsibilities that they would be required to fulfill.
- Documents: Know the location of key documents along with how to access them. Ensure that back-ups of important documents are created and stored in an appropriate format that is quickly accessible by the right persons.
- Finances: Know the financial institutions that support your business and ensure that more than 1 person has access to the accounts. Additionally, make sure that you have the right types and amounts of insurance for the business.
- Operations: Every task that you perform in the business may not be critical. Ensure that the critical tasks or functions are well documented. Give some thought to potential workarounds and ensure that those are documented as well. Identify who would be responsible for communicating with key stakeholders (employees, customers, suppliers, creditors) and ensure that you have access to stakeholder contact information.
Responses to these elements, compiled into one through document, forms the basis of a sound Business Continuity Plan.
Resilience, they say, is an inside job. You may not realize it, but you already know or have all the elements of a Continuity Plan for your business. You’re already well on the journey to building a more resilient business. If you are unsure about whether your business needs a Business Continuity Plan, take the Continuity self-assessment to find out.