Business Continuity Planning For SMEs

Sometimes things happen outside of your control that could affect the running of your business. Business disruption can occur due to events such as natural disasters, cyber attacks,  or inability to gain access to your business premises. Disaster can strike at any time, and no business is immune. So how can you be best prepared if things go wrong?

What is Business Continuity Planning and Business Impact Analysis?

Business continuity planning (BCP) is a process that helps businesses keep running in the event of disruptions. A business continuity plan outlines the steps needed to bring the event under control to keep the company operating. It also outlines what to do in each situation. Business continuity management involves overseeing and making necessary changes to the plan. It also involves identifying threats and their impacts, and planning for disaster recovery. The BCP would also include any resources needed to allow the business to keep running and any actions staff may need to take.

The business continuity planning process includes steps such as: 

• Preparation. 
• Defining objectives. 
• Identifying and prioritising risks. 
• Developing strategies. 
• Defining teams and tasks. 
• Testing plans.

The first step is to identify which business functions are those that will keep the business running. Then you can take steps to make sure that they can still be performed even if there is a major interruption. This might mean having a back-up site, investing in alternative suppliers or holding extra stock. It is also important to have a robust communication plan in place so you can keep your customers and staff updated on what is happening.

Why is a Business Continuity Plan Important?

However unlikely it might seem, there are many incidents that could prevent you from operating normally, if at all, such as:

• Fire.
• Flood.
• Theft.
• Accident or illness.
• Failure of utilities.
• Damage at key suppliers premises creating a sudden shortage of raw materials.
• Reputational damage.

A disruption to your business may be very costly. Loss of revenue plus extra expenses often means reduced profits. Many businesses can’t continue to trade following an incident, and a disaster can leave a business unable to re-establish itself. This is why it is crucial to have business continuity plans in place. Regularly updating business continuity plans can help mitigate these risks. Updates should be based on testing and ensuring they are up to date with current business needs.

Business Continuity Planning, Disaster Recovery Plan, and Insurance

A business continuity plan should include disaster recovery plans focused on recovering from failures. Putting aside time to do this will help to; 

• Lessen the impact. 
• Stop your business from failing if you do encounter a major disruption. 
• It may even result in lower insurance premiums.

Be Prepared for Business Interruption

If a disaster, such as a fire, flood, or power fault, affected your business you may need to close down while the issue is resolved. It’s important you have a contingency in place for this, because you will still have responsibilities. Things such as paying your staff and rent, whilst you are unable to run the business. Business interruption insurance (BII) can keep you going during this time. It can help to ensure your cash flow and reputation are still intact when you are able to resume business. BII can even help cover any additional expenses you have to pay in order to keep the business running. For example, renting temporary premises, as well as the shortfall which occurs due to the loss of business. Additionally, utilising a business continuity planning suite can guide you through the planning process with tools and software designed to help maintain operations during disruptions.

Conducting a business impact analysis is crucial to predict the potential consequences of disruptions. This analysis helps in understanding how your business will need to respond to crises and assesses the overall impact on your business.

Maintaining business operations during emergencies is essential. Ensuring that your production services, IT infrastructure, and other critical areas are covered can help you continue to operate smoothly even in adverse conditions.

Regularly reviewing your business continuity plans is important to ensure they align with current key business processes. This helps in covering all essential areas of business operations and adapting to any changes in your business environment.

Protecting and ensuring the continuity of critical business functions is vital. This includes safeguarding essential operational activities within your company, especially during disruptions or workforce changes.

Furthermore, understanding your recovery time objective (RTO) is important. The RTO determines the amount of time for recovery before suffering consequences from disrupted business processes.

You should also consider any other gaps you may have in your cover such as:

• Property insurance and temporary premises.
• Commercial vehicle or fleet insurance.
• Tools and equipment cover.
• Cyber insurance.
• Personal accident insurance.
• Employers liability.
• Public and product liability.

Whether you own a restaurant, shop, pub, hotel, or another small or medium-sized business, it’s vital to have the correct level of cover in place to ensure your business can continue to operate. We can advise you on obtaining the right cover for your business, including explaining from the outset exactly what is and isn’t covered, so there aren’t any nasty surprises.

Speak to smei about protecting your business.