In 2005 Hurricane Katrina destroyed around 18,000 businesses in Louisiana (U.S). The vast majority of these business owner’s lost assets, employees and their market was totally disrupted.
In 2011 Christchurch (NZ) experienced a devastating series of earthquakes, which destroyed 70% of the central business district.
Although most of these owners were aware that they operated within a hurricane/earthquake risk area – failure to properly plan meant they could never recover what they’d lost.
As a small business owner, planning for the next disaster probably isn’t at the forefront of your mind, right? It can be difficult to justify the costs associated with developing a continuity plan versus other more pressing cost centres. However, when disaster strikes – it’s small businesses that are usually hit the hardest and sometimes never recover.
More than 50% of all Australian small businesses don’t have any kind of continuity or disaster plan. You know how much blood, sweat and tears have gone into your business so far. So why would you risk losing it all just because you didn’t think something through properly?
As a business owner you probably think that bad stuff is more likely to happen to other people. Except that’s not necessarily true. Bad things sometimes do happen to good people and being prepared might be the only thing that’s the difference between years of ongoing problems and business recovery.
When disaster strikes it’s not unusual for panic to set in and common sense to fly out the window. Having a plan you can rely on can significantly aide you, and possibly more importantly your employees, through the process.
So how do you begin developing a business continuity plan?
- Start by outlining possible crises:
There are many crises other than earthquakes and hurricanes, which you’ll need to consider, such as:
- Death of a CEO or important staff member – some employees are not easily replaced, initially. Especially when they hold valuable knowledge regarding clients, process information or when they hold key client relationships.
- Fire, flood or other natural disasters.
- Your IT system goes into meltdown.
- Your largest and most important client or supplier goes into receivership.
- Identify your communication channels:
During a crisis, it’s crucial that you’re able to effectively communicate with your staff, customers and suppliers. Are you able to divert phones? Can you or your team access your database remotely? A detailed contact list is essential. As for customers, you may need to consider communicating through social media in order to keep them informed.
- Assess risks and plan accordingly:
Identify the risks that are most likely to occur. For each risk consider everything you’ll require in order to keep the business running, such as:
- Who are your essential employees?
- Where is your alternate office location if your current one is unusable for any reason?
- Will your existing IT equipment be sufficient?
- Do you have alternate suppliers?
- How will you manage your reputation?
Don’t fall under the misconception that having insurance and legals in place is the same as having a business continuity plan. Yes, insurance can protect your physical assets and legal contracts can cover your finances if a potential partner backs out. But, what it doesn’t cover is the loss of knowledge, relationships or business you forgo until you get back up and running or the cost of recruiting new staff.
- Protect and back-up your data:
When it comes to backing-up and protecting your data – cloud computing can be a small business owner’s best friend. Cloud technology allows you to store your data within online centres. This provides you with the ability to access your data from anywhere that has an internet connection. The same goes for your financial information if you use cloud accounting technology (if you’re contemplating switching to cloud, we’d love to talk to you!).
- Communicate and practice the plan!
What use is a plan if no one is aware it exists? It’s critical for your staff to know exactly what actions to take if a disaster hits. And make sure everyone is able to access the plan! Regularly practice and review your plans. Running through various scenarios will allow you to find areas where your plan may be falling short. These can then be reviewed and improved upon.
Taking the time to develop an effective continuity plan now will save you hours of time (not to mention stress) in the long run. When developing your business continuity plan it’s important to remain realistic. Think about “when” a disaster will strike not “if”.
Of course, if you feel you could use some extra help with your business planning, you can always give Kerry a call on 6023 1700, drop us a note or connect with Kerry via LinkedIn.
