Planning for the unexpected in business....

In business, you must always remember to expect the unexpected.  It might sound cliché, but it’s the honest truth.  While you can’t plan for every problem that may occur, writing some flexibility into your business plan is a good place to start.  As is obvious, your customers are the most important part of your business and you want to ensure that they don’t incur an interruption of service given any unforeseeable problems that might arise.

Contingency and continuity plans are a must in business.   It might sound silly but you should be prepared for anything: earthquakes, fires, floods, cyber attacks, hurricanes, tornadoes, utility outages, disease, terrorism, riots, protests, crime, fraud, theft, accidents – anyone of these could have a significant impact on your business.

The purpose of having a back-up plan or in essence, a “Plan B” is to provide options on how your business will operate efficiently in a crisis and minimize the potential loss of revenue and future business opportunities.  Such a plan is often developed by identifying what events could possibly impact your normal flow of operations and the way your business runs on a daily basis.  Look for ways or develop strategies that make it possible to overcome breakdowns so that you can continue doing business as usual.  Your plan should consider what the short term options are for you to continue doing business and also include a step by step guide of what you do in any given scenario.

“A continuation plan is a document that outlines how the operations of your business will continue running through major disruptions.”  This plan is the blue print of how your business will continue through any crisis that presents.  The plan should describe how you will minimize interruptions to your business and the ability to provide service to your clients as well as how to minimize financial loss.  “It includes action plans on how you will be able to resume core business functions and critical operations within a specified time after a disaster.”  A sound continuity plan will soften the financial blow but you also might want to consider taking out an insurance policy as a backup until you are fully operational again.

At some point, you might have to deal with the replacement of management or key personnel.  A plan should include what would happen if there were a change due to death or retirement.  “All businesses should consider life or disability insurance for each and every owner and any key person involved in the business.”

Especially for small businesses, all copies of key documents should be stored at an offsite location.  “The information contained should include details of who owes the company what, any outstanding loans, the contact information for all lawyers and accountants, insurance documents (in the event the company owner or key man dies) and any other shareholder documents.”

Remember, communication is key.  Your continuity plan should outline how staff members should contact each other in the event of emergency and should give those staff members an idea of what tasks they should prioritize.  For example: “If your server fails, where can the backups be found?  If bad weather stops supplies reaching your factory, how long can you operate on the existing supplies?  Should the priority be finding new ways to get supplies in, or should you help your customers make alternative arrangements?”  Once you’ve drawn up your plan, make sure that your staff knows about it and that they understand it fully.  There’s no point in having a plan if it’s locked away in a safe that only you have access to and nobody realizes it exists. You should revisit the plan frequently and make sure that it is up to date, accurate and reflects that status of your business.

“The best place to start is with one of the basic checklists provided by the government. The checklists are quite basic and focus almost exclusively on common problems such as fire, theft, or power outages.  Business specific issues aren’t covered.  The lists are a good starting point, however, and should help you to focus your thinking and expand your plans to cover the things that your business needs to worry about.”

Your business continuity plan can be as simple or complex as you so choose.  Start by identifying what the biggest impacts may be to your employees and business as a whole.  Next figure out what you can do to minimize these impacts.

If you have investors or are looking for them, they will want to know that you have such a plan in place.  Investors want to make sure that you have alternative strategies that will help protect their investment.  By having such a plan, your investors will know that you’ve thought about the bigger picture and your business as a whole and where it is going over the long run.  It will assure them that you will do what it takes to protect your business and their investment.

"A well thought out business continuity plan can mean the difference between being funded and not.  It can also mean the difference between your business’s survival and failure in the event of a crisis."

Here are some articles on business continuity plans that you might want to check out:

“How do I plan for the unexpected”: http://www.financialpost.com/small-business/business-solutions/story.html?id=618879

“Business continuity and disaster recovery: The Basics”: http://www.csoonline.com/article/204450/business-continuity-and-disaster-recovery-planning-the-basics

“How to create a business continuity plan”: http://www.wikihow.com/Create-a-Business-Continuity-Plan

“Business Continuity Plan”: http://www.ready.gov/business/implementation/continuity

Until next time…