27 Oct 2020
Why your business needs a continuity plan

Why your business needs a continuity plan

  • A business continuity plan sets out how you’ll continue to operate if something goes wrong
  • The plan should identify your main business risks, risk assessments and details of how you’ll respond if one or all of those occur
  • List the top three or four areas that are critical to your business and explore how each risk might affect them.

At any given moment, your business could potentially be struck by a disaster. From fires to floods, storm damage to a cyber hack, something that’s entirely out of the realm of your control can suddenly happen – and can seriously disrupt your business.

In such a scenario, the ability to think clearly and rationally is tempered somewhat, which is why it’s wise to have a business continuity plan in place.

“A business continuity plan is vital for every business to have,” says Dave Burnage, SME Underwriting Manager at QBE. “It plots out how you’ll enable ongoing operations with the minimum of interruption.

“The plan should identify all of the main risks to the business, and what you’ll do in the event of one or all of those happening.”

Related article: How to use thermal imaging to prevent electrical faults and protect your business

Young women working at her laptop

Creating your business continuity plan

When putting together your business continuity plan, there are a number of key areas to consider.

Identify the threats

First things first, the risks your business faces need to be known. Potential risks include everything from fires to theft, storms to, of course, pandemics.

Some risks may be more significant than others; some you may have faced before. Remember to consider secondary effects, too. For example, you may not be in an area that’s likely to be impacted by bushfires, but what impact does severe bushfire smoke have on your business?

Risks can also come from other avenues – high staff turnover, perhaps, or key client loss.

Each risk should be assessed, in terms of the potential damage it could cause, and how you could and should respond.

“By identifying and being aware of the risks your business faces, you can take some proactive steps to minimise them now,” says Burnage.

For example, you may recognise that all of your data is kept in a filing cabinet, on one laptop or a local server. By uploading your business information to a secure Cloud solution, you can ensure you’ll be able to access your business information from anywhere.

List the areas critical to your business

When creating a business continuity plan, it’s vital to focus on what’s important to the business. List the top three or four areas that are critical to your business and explore how each risk might affect them.

For example, if a warehouse is crucial to your day-to-day and it’s rendered inaccessible due to severe flooding, what happens to your stock? Can you hold some stock in a different location? Can you get alternate supplies to clients?

If you sell ice-cream in a coastal town, what do you do in the event of bushfire smoke impacting the area? Do you have other locations you can sell from or other products to sell?

What happens if your supplier can’t deliver your fresh produce? Do you have some back-ups in place?

By exploring different scenarios, you can identify the actions you need to take to keep your business operational.

Spread the risk

As well as knowing what you’ll do in the event of an emergency, it’s good practice to spread the risk a little. For example, if you operate solely from a storefront, you’re completely dependent on that building being there, and your customers being able to reach you.

An online store would enable you to establish an additional path to market and help soften the impact should your bricks and mortar business be affected.

“That diversification of both suppliers and distribution is key,” says Burnage. “If you’re overly reliant on either of them, you’re vulnerable if they are disrupted.”

Related article: Asset values: Don’t take the risk of being underinsured

Young man sorting through paperwork in his workshop

Creating your business continuity plan

If you want to start putting your business continuity plan together, there are a number of resources and templates available online. The business.gov.au website has some strong resources, including an emergency management plan template.

As well as including the business continuity plan, it also contains an emergency action plan template and a recovery plan template, helping you identify the steps you’ll need to take to get the business back on its feet.

Burnage believes that, as we head into bushfire, storm and cyclone season, it’s the right time to put together your business continuity plan.

“A lot of SMEs believe they don’t have the time to create a business continuity plan,” he says. “But it’s time well spent – once you’re in the thick of dealing with a disaster, it can be hard to think clearly.”

Find out more about QBE’s Small Business Insurance

The advice in this article is general in nature and has been prepared without taking into account your objectives, financial situation or needs. You must decide whether or not it is appropriate, in light of your own circumstances, to act on this advice.

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