As a business owner, you are responsible for making various strategic decisions to expand and maintain the growth and operation of the business. However, things do not always go as planned. Sometimes unforeseen events or circumstances could have devastating effects on your business. Insurance does not always cover all costs and cannot compensate for all the negative effects on your business. This is when you need a business continuity plan template. We will show you how to create one that allows your business to respond to these contingencies effectively.
You can also download your business continuity plan template here.
A business continuity plan is a document that seeks to give guidance on how a business may continue to operate during unforeseen events. It is more detailed and comprehensive than other plans such a disaster recovery plans. It should cover every aspect of the business that might be affected, such as human resources, marketing, assets, clients, business partners and more. It provides procedures and instructions for a company or an organization to follow in the case of disasters. Some of the examples may be:
The costs of recovery can be very expensive - Many companies that are not adequately prepared for dealing with disasters simply struggle and cannot bounce back from a crisis. More than sixty per cent of new businesses fail in the first years. Not having a business continuity plan is definitely a large factor in this figure. A business could be growing steadily but it may not have the resources to resolve problems and recover its essential functions to operate properly. The costs of replacing damaged equipment, buildings could be enormous.
Time is of the essence – not all businesses enjoy the power of a monopoly, where they have complete control of the market and that disruptions to their services will not be detrimental to their client base. On the other hand, for businesses that do operate in a competitive market, any disruptions could potentially enrich their competitors and they may lose the confidence of their customers forever.
Protecting your assets – Businesses usually would use their investment funds to procure assets that are made to last and it would pay off in the long term. A disaster may jeopardise your plans of making the best of your assets that you have placed enormous funds into.
Community Impact – As business owner, we have to assess not only the impact on the business but also the impact on the community. This is especially true if your business provides an essential service or it forms an integral part of people’s daily lives. This is especially true when your business operates on a subscription model
IT Disasters (Cyber-attack, system failures)- One prime example would be IT disasters. The problem could be that a computer system got corrupted. An IT-based business disruption could be caused by employee errors, hardware failures or software issues. As we are in the age of digital transformation, almost everything that we do in our day-to-day is connected to the computer system. With the current pandemic, many businesses have moved on to online platforms and customers prefer to engage in services virtually for safety reasons. It is hence important for a company to quickly recover from platform failure. Data collection is also immensely important to businesses and losing access to it could be detrimental to a business. For some businesses, ‘digital’ or ‘soft’ assets are the only assets of their company. Hence, it is even more important for these businesses to have a recovery plan in place so that they can mitigate their losses to the minimum level.
Natural Disasters – Any physical disruptions, including any floods, earthquakes, lightning, hurricanes. This type of disaster will typically affect ‘traditional’ businesses with tangible assets that can be damaged or destroyed during a natural disaster, causing losses and disruptions to service. Besides tangible assets, the safety of employees is also immensely important. Without a proper procedure, employees may not be able to act in a way that ensures their own safety as well as minimizing losses for the company. Some geographical locations are more prone or susceptible to certain natural disasters. It is therefore important for a business to do a risk assessment on the geographical location before committing to a lease or purchase of land. Otherwise, a business may run into the risk of losing its physical assets due to a natural disaster. Adequate emergency and safety equipment should also be provided to safeguard the wellbeing of all staff members, clients and the community around it.
Human Errors – everyone makes mistakes. We are only human, and our actions are not always perfect. For example, sometimes a trainee may have accidentally attached a confidential document to a client that is not supposed to have access to. It is important for a company to train its employees and reassure them that owing up to their mistakes would not necessarily jeopardize their jobs, this will then encourage an employee to quickly report a mistake. Businesses should also employ software to reduce human efforts in identifying mistakes. This will allow businesses to be notified quickly and accurately when there is a mistake, or even prevent the mistake from being made in the first place.
Deliberate attack – Although this is rare, it is not impossible. These may include mugging, any trespassing, stealing, terrorist attack, or any crimes. Sometimes these situations arise without an apparent reason and it is impossible to predict when would it happen. However, as a business owner, it is your responsibility to place the wellbeing and safety of your employees as your paramount concern as your employees are arguably the key assets to the operation of your company.
This is the most important component of the business continuity plan. Here, you should try to identify the sources that are effective for your business, the magnitude of its effect, and how exactly does it affect your business. (e.g. which processes, team or functions does it affect). Knowing this information will allow you to formulate priorities and strategies to counter these problems. Having a daily, weekly, monthly workflow and financial report will allow the managers of your businesses to quickly identify the problems that are affecting your businesses and to understand what the magnitude of the problem is.
Some of the key indicators are:
Recovery – every business has a unique structure and workflow. While it is good to draw references from online sources to find out what are the essential steps to ensure that your business can bounce back onto its feet, it is also important to be flexible and tailor those procedures to suit your business structure.
Organisation – Designating the right team and people to be in charge of recovery is extremely important. When disaster hits, teamwork and co-operation are crucial and when nobody is in charge, people could panic and that the team may work towards solutions that are not effective. An effective way is to devise a communication tree so that a staff
Training – This could be done through workshops, where your employees may be placed under a simulation. This process allows you to assess the effectiveness of the recovery plan that you have devised for your business. It may also test out whether the team or person that you have designated the recovery plan to is working out or not.
For a more elaborate Business Continuity Plan Template, please see our business continuity template here.
Please note that this is a general summary of the position under common law and does not constitute legal advice. As the laws of each jurisdiction may be different, you may wish to consult your lawyer.
DocPro Legal is a team of legal professionals with a passion for making quality documents and legal contract templates widely available to the public through cutting edge technology. Our lawyers are qualified in numerous common law jurisdictions including the United Kingdom, Australia, New Zealand, India, Singapore and Hong Kong. We have experience in major law firms and international banks with expertise in business, commercial, finance, banking, litigation, family, succession and company laws.
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