What Is a Business Continuity Plan and What Are Its Benefits?

What is a Business Continuity Plan?

A business continuity plan (BCP) details what your business will do during various kinds of emergencies. These can be direct threats to your company, such as natural disasters (e.g., floods and fires), hard drive failures, and cyber attacks, or they can be regional disruptions, such as losses of national infrastructure, transportation shutdowns, and pandemics. The plan should assess how probable each one is to happen and the losses each one would cause.

In fact, a BCP should outline how your personnel will contain and reduce the consequences of any possible emergency that could interrupt your business. This should include a list of the absolutely indispensable systems, processes, and functions that make your business what it is. And it should detail how you will keep them going using specific actions, personnel, and equipment.

The Elements of a Business Continuity Plan

A BCP often gives employees multi-step procedures to use in each situation to navigate and recover from each type of disaster. But that doesn’t mean it should be novel-length. If it’s so long that no one can effectively use it, it’s not worth having. So, it should be just the right length to guide your staff during a stressful time—and no longer. A small business might even fit it onto just one page.

Here are the essential pillars that a BCP is built around:

The smallest amount of resources you would need to stay in business
The physical location(s) where you will operate during an emergency
What team members will be there to perform operations
How much it will all cost

But most plans also include:

General data about the company, including key contact information
The purpose of the plan and what it covers
The procedure for revising and updating the plan
Other policies
Instructions about how and when to use the plan
Steps to take in each type of emergency, including checklists and/or diagrams
A schedule for revisiting and testing the plan

That last bullet point is crucial. New threats to businesses keep appearing, and your business and its environment keep changing. Your employees can only use the plan if they are periodically educated about it and trained on it. And the plan will only remain effective if you test it, audit it, and improve any problem areas of it.

Benefits of Having a Business Continuity Plan

Additional benefits of business continuity planning and disaster recovery planning fall into several major categories, explained below—but these are just some of the benefits.

Strengthening Your Business:

Because the process of preparing a BCP exposes vulnerabilities in your organization, it can help you to improve your business right away. You might answer questions you have never thought about.

How would your business fare if computers, the Internet, email, etc., were to stop functioning?
Is there any one part of your business that could fail and bring everything else to a halt?
Do you have any vendors or outsourced functions that are critical to your continued operations?
Do you have any way to work around certain business functions if they are interrupted?
After a disaster, what knowledge and skills would your business need in order to bounce back?

Many firms have found and corrected problems in the small details of their daily work through this planning—even in areas they had never thought to examine before. In fact, some potential smaller threats have become non-issues by catching them early.

Investor, Employee, and Customer Confidence:

Your investors will see how well-prepared you have become and will gain more confidence in you. Your employees also will see the plan as a sign that you are protecting their jobs and safety. And it can improve your public image; it shows you will be reliable to your customers even during a disaster. In fact, safeguarding your brand and reputation during and after an emergency might be more financially important than anything else, because it ensures that customers will still want to buy from you afterward.

Reducing Financial Loss:

One of the main effects of a successful BCP is that it reduces financial exposure and loss. This also extends to the realm of accounting: you are able to ethically value your assets at higher prices based on the “going concern principle,” which assumes that you will stay in business indefinitely and not be forced in the future to sell assets at a deep discount.

Insurance Coverage:

Without a BCP, insurers won’t even cover certain risks. But with a good plan, they will cover you and even give you discounts on premiums. This is comparable to the incentives health insurance companies give to insured individuals who engage in preventive health activities. Insurance companies recognize that a business that takes the time, attention, and thought to build a continuity plan is less likely to actually file a claim. Because insurance companies see you as less risky for them, that should tell you that a BCP measurably reduces the risk that your company will be unable to pay the bills during an emergency.

Regulatory Compliance:

The government may eventually require you to create a BCP. It’ll be better to be finished creating it when that happens than to task your employees to do it, or to bring in an outsider in a hurry. Contact ROI Call Center Solutions today for a free consultation. A professional staff member will get back to you soon to answer your questions.