Why A Business Continuity Plan is Essential

Posted by RJi

Business catastrophes happen every day, which is why every business should have a plan in place to stay in business.

You might be new, with just a few months under your belt and have invested your life savings to pursue your entrepreneurial dream. Or maybe you’re a well-established, extremely successful business owner, but, a fire, an earthquake, a tornado or other natural or man-made disaster could destroy your business in seconds.

The Institute for Business and Home Safety states that when disasters force businesses to shut down, 25% will never reopen. So how do you keep your business afloat if you become a victim of a disaster?

Are you prepared? Do you have a business continuity plan in place.

The Houston Area Research Center cites these statistics in support of the positive investment of time and money into creating a business continuity plan:

• 35 – 40 percent of businesses disrupted by a disaster without a continuity plan never reopen.
• The 5-year average of U.S. disaster losses is $2.5 billion (pre Katrina).
• Every dollar spent on disaster preparedness saves $7 in recovering disaster related economic losses.
• Your ability to reopen quickly is imperative.
• The sooner you are back in business, the less you’ll suffer from lost revenues.
• Open sooner and customers will be retained because they are aware you’re down time will be minimal.
• And, extremely important, what about your employees. As a business owner, you’ll want to get them all back to work so they and their families don’t experience financial hardship.

The Top 10 questions to ask yourself

• What potential disasters could we face (natural or man-made)?
• What operations are critical to the business operations and need to be up and running quickly?
• Do we have a data backup in place to be able to access our records from any location?
• Who are our key resources (utilities, insurance agent, CPA, etc.)?
• Who are our key suppliers and do they have a business continuity plan?
• Do we have a relationship established to ensure we will be one of the first served?
• Where can we set up a temporary location, and who will direct the process?
• What supplies, inventory and equipment will be needed immediately?
• Is our employee call chain up to date, and does each employee know what their role is in our disaster continuity plan?
• Do we have an inventory of all of our assets so we can complete an insurance claim quickly and thoroughly?

Though this is just the tip of the iceberg in business continuity planning, it is a good start to help begin the necessary steps for preparedness. Without a plan, the odds are far greater that you will not re-open if you’re ever forced to close.

It can be a time-consuming process to complete an effective and  thorough business continuity plan. Consider investing in a specialist firm to create it for you, to ensure it is finalized quickly and professionally.

Cindy Hartman is President of Hartman Inventory, a firm that provides business and home inventory services. She is an owner of Business Continuity Planning Specialists, which was created with the small business owners’ needs and budgets in mind. Cindy writes a blog and is also a freelance writer on topics of disaster preparedness and recovery, small business, personal property inventory, product reviews, marketing and networking.

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