What is a business continuity plan?

In the current business landscape, businesses face a range of risks ranging from natural disasters to cyber-attacks and disruptions in supply chains. A business continuity plan aims to ensure that a business’s essential functions can remain operating if an unexpected event seeks to interrupt their normal business activities. 

Continue reading to understand what a business continuity plan is, the steps required to create a plan, and what to include. 

What is a business continuity plan?

The Business Continuity Institute defines business continuity as an essential part of modern business which ensures businesses can maintain their critical business functions during, and after, an incident has occurred. A business continuity plan (BCP) is a document which is created around continuity strategies and outlines the steps a business should take after an unexpected disruption. These disruptions could include natural disasters, cyber-attacks, supply chain failures, or other crises that could interrupt or halt business activities.

How to create a business continuity plan 

Creating a business continuity plan involves following steps to ensure all essential functions of a business can continue. 

Carry out a business impact analysis

Start by conducting a risk assessment to identify all the possible risks and vulnerabilities of your business. A business impact analysis will help to determine which processes are essential and what the consequences of an unforeseen disruption would be. 

Create your business continuity plan

Build your plan with key stakeholders, such as essential staff or board members, to develop practical response strategies for each of the risks and vulnerabilities identified, including communication and recovery procedures. Document these procedures clearly, making sure to assign roles and responsibilities to employees.

Test and train

Implement your plan and regularly test it through simulation exercises or training sessions. Ensure all employees are trained on their roles within the plan, and include external partners in testing where it could prove helpful.

Review regularly

Maintain your business continuity plan by regularly reviewing, and update to improve your systems when needed.

Why is business continuity planning important?

Business continuity planning is important as it aims to prepare organisations for any unexpected events which could disrupt or halt their operations. Without a plan, businesses may risk financial losses, reputational damage, and may even face permanent closure after a large-scale unexpected event. An article from Investopedia shares how implementing a BCP helps to minimise the time a business may have to pause its operations, in-turn saving a company money. It can also show that a business has a proactive approach to risk management, which can increase confidence among any clients and investors. By identifying vulnerabilities and preparing responses for each, organisations can reduce the likelihood of confusion or panic if a crisis were to happen. 

What should a business continuity plan include?

A business continuity plan should provide clear guidelines for employees, to enable a business to respond quickly and effectively to an unexpected event. The Federation of Small Businesses shares how a comprehensive business continuity plan should include:

Key business processes

Essential areas of your business operations, such as:

• Production services
• IT infrastructure
• Stock

Understanding company threats

Ranking which threats could pose a risk to disrupting your business – these could include:

• Natural disasters
• Fires or floods
• Cyber-attacks

Determining impact

Predict the potential consequences of your processes being disrupted. Impacts could include:

• Loss of sales and incomes
• Increased expenses
• Decrease in customer satisfaction and loyalty

Determining your key resources

• The key resources your company relies on, including:
• Key staff
• External contacts
• Equipment

Staff

Employees that your business cannot function without, such as staff who:

• Lead your sales services
• Manage your company accountancy
• Lead your production processes

External contacts

People, and their companies, outside of your business who are key to operations. This can include:

• Contractors and service providers
• Suppliers and distributors
• IT consultants, electricians, or engineers

Data, equipment, and supplies

Such as:

• Data and databases to conduct client work projects
• Equipment such as manufacturing machinery
• Technology, including specific computers or software

Business documents

Documentation you would need to continue running your business or restart your company, for example:

• Banking information
• HR documents
• Legal papers

What is the difference between business continuity planning and disaster recovery planning?

While business continuity planning and disaster recovery planning are closely related, they have distinct purposes. Business continuity planning focuses on maintaining overall business operations during and after a disruption, covering people, processes, communications, and facilities. However, disaster recovery planning specifically focuses on restoring IT systems, data, and technology following a crisis.

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Please note: This article provides guidance for information purposes only. It should not be relied upon wholly when making or taking important business decisions – always seek the services of an appropriately qualified professional. The views expressed by websites referenced to are limited to those of the websites, and do not necessarily reflect the views of Markel Direct. Markel Direct is not affiliated with any of the brands, companies or websites mentioned in this article.