Owning your own business can be immensely rewarding, especially as you grow to employ others and services to an ever-increasing list of clients. And as you grow and succeed, you owe it to yourself, your staff, and your customers to plan for the future, including possible future disasters.
What will your business do if the servers for your website go down? Or your network experiences a cyber attack? Do you have a plan for how to act in the event of a natural disaster? These are questions all business owners should ask themselves. Your answers and solutions will help form the basis of your company’s business continuity plan.
What Is a Business Continuity Plan?
Your business continuity plan is your roadmap in times of crisis. The goal is to complete a business impact analysis, risk management assessment, and develop a plan to recover and bring your business back to normal. Think of natural and man-made threats to your routine business operations, which could include, but are not limited to:
- Natural disasters such as flooding, earthquakes, tornados, or wildfires.
- Human disasters such as theft or arson.
- Cyber attacks, phishing scams, ransomware, etc.
- Cyber disasters such as internet downtime, payment methods not working, etc.
Once you’ve identified all the potential risks to your business, you’ll want to go through each one and determine how it would affect your business and what steps can be taken to mitigate the impact.
Why Does a Business Continuity Plan Matter for Small Businesses?
As a small business owner, you might assume that continuity plans are only essential to large-scale companies. You might feel confident that you’ll be able to figure out solutions to emergency scenarios in the moment. The reality is that when you’re faced with a crisis, you’ll make better choices if you’ve preplanned a course of action rather than trying to find your way amidst the stress and chaos.
The best way to create a business continuity plan is to take some time to strategize before disaster strikes. You don’t have to do the work alone either. Chartered Professional Accountants can help by sharing advice, offering insights, and providing accounting services to determine the potential financial impacts of each situation.
What to Include in Your Continuity Plan
There are four main parts to developing and implementing a business continuity plan:
- Conduct a business impact analysis to identify what threats pose potential risks to your business processes and how they will impact your activities.
- Create a roadmap to recovery by listing the steps it will take to mitigate each disaster scenario. This step and the previous step are often supported by a CPA or financial professional.
- Organize a continuity committee or team. This team might include two or more employees, depending on the size of your business. Ensure that each team member is involved with creating the plan and stays up-to-date on any changes.
- Train the continuity team, so they stay informed and confident about how to manage each situation.
Take Care of Your Personnel
Once you grow past being a solopreneur, you’ll have a duty to think of the well-being of your employees as well as yourself. For each potential risk you identified in your plan for your business, you’ll need to go through and assess how it could affect your employees and what actions you’d like them to take. Some questions to ask might be:
- What is the first thing my team should do if our network is hacked?
- What actions should my employees take in the event of a blizzard when working at our physical location?
- How should my remote employees proceed if our systems go down?
Another section of your continuity plan should address HR issues in the event of emergencies, such as how you will stay in contact with your team. How will you ensure they get paid? What is your plan of action if you’re unable to do either of those things? There is a lot to think about, but it’s better to be prepared.
Protect and Manage Your Assets
In addition to taking care of your personnel, you’ll also want to think about protecting and managing your business assets. These can include:
- Offices, factories, storefronts, or other real estate properties.
- Infrastructure systems or supply chains.
- Machinery or vehicles.
- Electronic devices, such as computers, mobile devices, scanners, servers, printers, etc.
- Cloud services and networks.
To effectively manage and protect your business assets, going through your business operations and highlighting which assets are at risk for each scenario will be helpful. Once you’ve completed that analysis, creating instruction sheets or checklists for employees to follow to mitigate each risk will help the business get back to normal sooner.
Test Your and Identify Weaknesses
Once you have your plans in place, it is highly recommended that you test them regularly. Your goal will be to identify any weaknesses in your plans. You can work with your employees to test whether they can follow and understand your emergency management instructions or not. You’ll also want to look for opportunities to make updates based on technology changes or evolving situations. If your company grows, you’ll want to address that change in your plan. If your physical store launches an online portion, you’ll want to add a section on cyber risks and action plans. Continuity plans are documents that should evolve as your business does.
When is a Continuity Plan Less Effective?
There might be times when your continuity planning efforts are not effective simply due to the nature of the disaster. For example, a major natural disaster that affects an entire community will make it difficult to plan for contingency options. If the electricity goes down, you can’t phone the power company to hook it back up. Instead, you’ll have to wait your turn until power is restored. Other emergencies can be so unpredictable and large-scale that it’s impossible to predict and plan for them (such as a global pandemic!)
Have Confidence in Your Business
While no business is completely disaster-proof, there are a lot of things entrepreneurs can do to prepare themselves. The hope is that you’ll only have to use your continuity plan for minor issues, never major ones. If your business does face a big risk, you can have confidence that you have a plan to take care of almost anything. Knowing that you are prepared for the unexpected can help make stressful times more manageable.
Chartered Professional Accountant in Edmonton
Are you thinking about creating a business continuity plan? Do you have a plan that needs updating or revisions? Contact the team of chartered professional accountants at Schwan & Associates CPA for personalized service, guidance, and feedback. We love any opportunity to set up local Edmonton businesses for success.