Why You Should Have a Business Continuity Plan in Place



Businesses rarely know before a disaster strikes. For this reason, it is crucial to ensure your business is prepared to overcome any damaging threats that could come its way. This is where a business continuity plan comes into action. 

A business continuity plan (BCP) details procedures and processes designed to help maintain operations or restore them as quickly as possible in the event of significant disruption. Without a comprehensive plan, businesses run the risk of experiencing financial loss, extended downtime, and even damage to their brand’s reputation. This guide will help you understand the importance of implementing a disaster recovery plan and how to get started creating one. 


What is Business Continuity? 

Business continuity is the idea of safeguarding your company by preparing for potential crises. Having a plan in place gives you peace of mind that your core business functions and operations will not be severely affected by the known or unforeseen incident, ensuring the business can continue functioning during and after the disruption. 


Why is Having a Business Continuity Plan Important? 

Here are the six main benefits of having a business continuity plan in place:

1. Maintain business operations

The main goal of a BCP is to protect personnel and assets while keeping the business operational during a disaster. 

2. Build customer confidence

Companies that are transparent about their ongoing business continuity efforts show their customers that they are committed to providing service — no matter what. This builds trust and confidence among customers and other outside parties you do business with.

3. Preserve your brand value and reputation

Businesses that are not prepared to handle disruptions risk appearing incompetent to the public. A BCP ensures a smooth recovery, preserving your stellar reputation and carefully crafted brand value.

4. Protect the supply chain

A BCP details processes and procedures necessary to ensure your supply chain will be protected in the event of a disaster, ensuring you can continue delivering products and services as promised. 

5. Mitigate financial risk

Disruptions are costly, but with the right plans to restore operations quickly, you can minimize your losses as much as possible. 

6. Gives you a competitive advantage

Your ability to respond and get back up and running after a disaster will go a long way in showing customers and potential business partners that your brand is one of the best. 


Top Threats to Business Continuity 

Before you start creating a business continuity plan, you need to conduct a vulnerability assessment to understand your company’s potential risks. Every company has different industry-specific threats, but the following are the most common risks affecting businesses in various industries. 

1. Global Pandemics

As we have witnessed through the recent COVID-19 pandemic, global pandemics can throw a wrench in business operations and even force employees to work from home. Companies should establish adequate policies to cover increased employee absence and have an effective succession plan for those with critical roles. You should also implement a reliable communication model to ensure employees can collaborate at all times. Additionally, plan for possible supply chain disruptions by identifying alternative suppliers in your BCP.

2. Natural Disasters

The frequency and severity of natural disasters like earthquakes, flooding, storms, wildfires, and hurricanes are rising. These events often strike with little to no warning. They can throw businesses in disarray, halting operations, disrupting supply chains through affected areas, and causing severe damage to physical infrastructures. Business continuity plans should incorporate the potential economic and operational impact of such events.

3. Utility Outages

Utility disruptions, such as an extended power failure, can present significant challenges and potential financial losses for businesses. They can result in data and production loss and equipment damage. Your BCP should factor in the impact of utility disruptions and provide options to mitigate the risks, such as backup generators. 

4. Cyberattacks

Cyberattacks are critical threats you need to include in your BCP. These refer to any attack on the company’s technical assets such as ransomware, data theft, denial of service (DDOS) attacks, and SQL injections. Therefore, businesses must formulate cybersecurity strategies to ensure they are prepared for incident response and recovery.


Developing a Business Continuity Plan 

Here is a step-by-step guide on how to create a reliable BCP that works.  

1. Identify the Scope of the Plan

The BCP should have a broad scope if it is to effectively address the many disaster situations that could affect the business. A BCP broadly applies to all critical business functions, including IT, operations, public relations, human resources, and more. 

2. Identify Key Stakeholders

Select the critical stakeholders of each department in your company to form a business continuity management team that will implement and execute the BCP. It is advisable to designate one person as the team leader and ensure they have the authority to get things done.

3. Identify Critical Functions

To develop a good BCP, conduct a risk assessment and business impact analysis (BIA) to identify essential functions without which the company cannot operate smoothly. For example, if you are running an e-commerce business, critical functions could be inventory management, order fulfillment, e-commerce platform functionality, or supply continuity.

4. Identify Dependencies Between Various Business Areas and Functions

This helps you determine the order in which lost functions must be restored to understand where to allocate resources. A business function with more business processes relying on it to be operational should have a higher priority during resource allocation. 

5. Determine Acceptable Downtime for Each Critical Function

Document the acceptable minimum levels of operations each function can afford and identify the time frame necessary to restore it to full operation. 

6. Create a Plan to Maintain Operations

Identifying threats to your organization is crucial but knowing how to react and recover is essential to bouncing back after an unanticipated event. This stage involves identifying strategies to maintain operations and describes how to implement them. 

7. Develop a Testing and Training Program

Perhaps the most crucial step is to test and maintain your plan. This could include basic training and an overview of the BCP or more in-depth drills such as tabletop exercises and simulations. This is an effective way to ensure your employees are fully trained on emergency procedures in case of a disruption.


The Importance of Reviewing and Testing Your Business Continuity Plan 

Business continuity planning should evolve with your company. With changing technology, environmental conditions, personnel, and organizational structures, your BCP can quickly become outdated and unusable.

Performing ongoing tests and reviews helps you identify any weaknesses or gaps in the BCP for improvement. This keeps it up to date, ensuring your plan fits your organization’s needs increasing the chances for smooth and safe execution. It is advisable to review your business continuity plan at least once a year. However, review frequency can depend on employee turnover and changes to business processes and IT. 


Bottom Line

No one can predict the future, but companies can minimize financial loss and other adverse effects of business disruption with a sound business continuity plan in place. Contact us if you have any questions or click here to learn more about our technology offerings.




Scott Kroeger is a Lutz Tech Shareholder with over 15 years of technology related experience. His primary responsibilities include overseeing the areas of managed technology services, custom software development, and creative services. In addition, he provides CIO level consulting to clients.

  • Sales and Operations
  • CIO Level Consulting
  • Managed Technology Services
  • Custom Software Development
  • Creative Services
  • Interface Design
  • Web Technologies
  • Systems Infrastructure
  • Databases
  • Programming
  • Application Integration
  • BA in Computer Science, DePauw University, Greencastle, IN
  • Institute of European Studies, Freiburg, Germany
  • Omaha Children’s Museum, Past Board Member


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