Why is a business continuity plan important?

Business continuity plan

‘Plan B’ for protecting your business when things go wrong…  

For many new enterprises or small to medium sized businesses, the idea of a business continuity plan can be overwhelming. Especially, if you’re still in the early throws of what smooth sailing business actually looks like.

You have to know your business before you can figure out how to manage it in less than ideal circumstances, right? But the fact remains, the longer you operate without one in place, the greater risk your business is at in the eventuality that disruption occurs.

What is business continuity?

Business continuity is the ability to maintain your business activities when faced with obstacles that threaten to derail them. Companies looking to mitigate these risks consider such situations and develop a plan around them to deal with the worst-case scenarios.

The ‘business continuity plan’ is a detailed outline that helps you to continue running your business when things beyond your control have gone pear shaped. It covers areas such as processes, people and procedures and it forms a guide to bring together these elements in the event of business disruption.

In critical situations you won’t necessarily have the time or focus to be able to think things through clearly and this is where the contingency plan comes in handy.

Obstacles and threats that organisations face

In New Zealand one of the greatest risks we face is natural disaster. Depending on the geographical location. Earthquakes, tsunamis, landslides, and flooding are a big concern for businesses and communities alike.

Ever increasing threats include data breaches and cyber-attack. Many businesses protect themselves with backup security, servers, and generators to maintain business continuity in the face of this danger. 

More recently the global pandemic has thrown all industries, supply chains and workforces out of kilter. The resurgence of Covid-19 in New Zealand is an ongoing (and unpredictable) threat to business continuity for the foreseeable future. 

Why you should have a contingency plan

The primary goals of a business continuity plan are to help safeguard the people involved, the assets and brand equity/reputation. 

If you can show your stakeholders, insurers, and employees that you have a robust framework to work through in times of disruption, you are more likely to:

  1. increase your market value
  2. reduce your premiums, and
  3. gain confidence and trust from your key stakeholders.

A ‘contingency plan’ is a marker of forward thinking, risk-averse companies that have business interests and reputations to protect.  

Statistics show that 80% of organisations that are faced with a significant business discontinuity, and do not have in place adequate and appropriate plans to ensure business continuity, do not survive the event.

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Businesses that rely on reactive measures have significantly less chance of survival than those that are proactive in these circumstances. Where companies survive these situations, reputational damage can be a double blow.

Benefits of having a backup plan

  1. Being able to trade during and after business disruption.
  2. Restart operations quickly after business disruption.
  3. Minimise the cost and time involved in getting business back on track.
  4. Reduce the risks and effects on your business.
  5. Assure your customers, stakeholders, and employees that you can weather the storm.
  6. Protect your corporate reputation.
  7. Improve insurance terms and costs.
  8. Reduce risks and danger to your employees and customers.

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Things to consider in your business continuity planning

  1. Identify your key business areas and critical business functions.
  2. Take note of the dependencies between various business areas and functions.
  3. Determine acceptable downtime for each critical function.
  4. Strengthen your systems security and put processes and measures in place to help outline your contingency planning.
  5. Insure parts of your business that protect against the biggest threats.
  6. Back up your data and files so they can be accessed from anywhere.
  7. Move your business to the cloud and operate its functions remotely (as far as possible).

Get in touch

If you don’t have the time to put your plan together, or would like to formalise one you already have drafted, we can help.

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If you are interested to find out what services and support we can offer you, click here to learn more.

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