If 2020 has taught business owners anything, it’s to expect the unexpected. The chaos of a global pandemic has caused companies big and small to restructure their business models, revamp their operations, and rethink the way they conduct business. It’s a time of simultaneous reflection and swift action. While business disruption is never easy, having a business continuity plan in place can ease some of the stress and financial hardship when disaster occurs. The plan outlines protocol to help businesses function during or immediately following a disaster, which may include anything from a weather event to a technology failure. Here are a few things to consider when preparing to develop a business continuity plan:
Ask ‘What if?’
As with most great plans, developing a business continuity plan starts with an accurate and honest assessment. Consider what scenarios pose the greatest risk to the business, and be thorough. Include natural disasters such as floods, fire, and severe weather, as well as less visible threats, such as cyber attacks, illness, or financial crisis. Once those risks are established, consider their impact on the daily operations of the business. Then, prioritize risks according to threats that will cause the worst case scenario and threats that will have the least impact on cash flow. In the end, cash flow is what keeps the doors open and the lights on (literally and figuratively).
Assessing financial reserves, assets, access to lines of credit, and identifying financial resources during a potential shutdown are vital components of any business contingency plan. To ensure financials are accurate and make a plan, consult with a trusted financial advisor, accountant, and Banker.
Review insurance policies.
Depending on which scenarios pose the greatest threats to cash flow, it may be wise to consult with a trusted insurance agent and review insurance policies to ensure there is adequate coverage in case of a natural disaster or property damage. This is also a good time to research Business Interruption Insurance, designed to help business owners continue to pay their bills when coping with a temporary closure or decreased revenue due to a disaster.
Develop communications plans.
Maintaining clear and open communication to a number of different groups is critical during a crisis. If a business is temporarily closing, or modifying its schedule and protocols as many are during the pandemic, business owners must be able to communicate effectively with staff, customers, and clients. Consider developing multiple communication plans suitable for different types of disasters.
For crises that aren’t due to technical failures, the Small Business Administration (SBA) recommends establishing an email alert system for employees and stakeholders, and social media, texts, and phone calls to communicate with customers. Communication during a technical failure, such as a cyber attack, can be more challenging, and may require input from IT specialists.
Invest in technology.
Every business should have a cloud-based backup system for files that are critical to daily operations. Cloud-based systems are generally more secure and efficient than back-up systems of the past, such as external hard drives, flash drives and cds. Consult with a trusted IT specialist to find a provider that will copy and encrypt sensitive information and records before storing it is a secure data center, off site. There are plenty of options that are cost effective, safe and secure.
Test the plan. Revisit it often.
It’s best to discover gaps in the plan before a crisis hits. That’s why annual testing is crucial. Assemble a testing team of company leaders who oversee various aspects of the business. This may include members of the senior management team, department heads, facilities and IT managers, marketing and communication professionals, as well as a small number of clients and customers. Testing is the only way to assess if a plan will work during a crisis, and how long recovery may take.
Research & Resources.
Developing a business continuity plan takes time, and requires input from a variety of people. A great place to start is the Department of Homeland Security’s website featuring downloadable resources for business continuity planning. The site covers a wide variety of topics from how to conduct a business impact analysis to testing recovery plans and recovery toolkits. For guidance throughout the process, reach out to Bankers, local business consultants at Small Business Development Centers, and tech and cyber security experts.
Fidelity Bank has built a strong history as trusted advisors to customers served, and is proud to be an active member of the communities it serves. With 20 branches located throughout Northeastern Pennsylvania and the Lehigh Valley, Fidelity Bank offers full-service Trust & Investment Departments, a mortgage center, and an array of personal and business banking products and services. The Bank provides 24 hour, 7 day a week service to customers through a variety of digital banking tools, branch offices, online at www.bankatfidelity.com, and through the Customer Care Center at 1-800-388-4380.