A family member is in the hospital, and you have to be across the country to care for them. A thief stole your laptop from your car. A storm has knocked out your internet service. Disasters are a part of life. But the ability of your business to function during and after crisis periods could be the difference between success and failure if you create a Business Continuity Plan.

What is a Business Continuity Plan (BCP)?

A BCP is a system of procedures that a company executes after a disaster. It ensures that the business will meet its obligations to its customers and creditors and continue to function with minimal disruption. Even small, one-person businesses need a BCP because anyone can be at risk from:

• Natural disasters such as flooding, blizzards, fire, etc.
• Accidents such as sewer backups, vehicle accidents, coffee spills on your laptop.
• Theft and vandalism.
• Power outages and electrical surges.
• Data loss due to viruses, malware, hacker activity, etc.
• Loss of staff due to injury, illness, death of themselves or that of a family member.

You are still accountable to customers and creditors even if you decide to close your business after a disaster. In that case, implement a BCP to wind down your business operations. You will maintain your reputation as a responsible, dependable person. And as Michael Fertik says, “Reputation is becoming more valuable than money or power.”

Where to Start

Start with a review of your business insurance. Some insurance policies include a business continuity clause that will provide funds to tide you over during a disaster. There can be many exclusions, so speak with an insurance agent to ensure you have the best coverage for your company. While you are talking to your agent, write down the procedure on how to execute your insurance’s continuity coverage and include the agent’s name and contact information. Make sure your spouse or trusted employee knows to contact them if you are unable to do so.

Next, visit your lawyer or notary and have them draw up a Power of Attorney for your business. If you are a solopreneur, your next-of-kin may not have the skill set or be in the best emotional state to manage your business if you are in hospital (or worse). Consider having a colleague or employee on the Power of Attorney in addition to your next of kin. Discuss the arrangements with both of them and confirm they are comfortable working with each other in what likely will be a very trying time. Also, they should know where to find the Power of Attorney and how to connect with each other.

Identify Critical Areas in Your Business

Establish which services are required to continue generating revenue. If these services are not performed, calculate how much revenue the business will lose and how long it can function without this income.

Determine what information must be available to deliver goods and services to customers by the promised deadline. You may need to access:

• contracts or agreements
• service or production schedules
• company policies and procedures
• accounts payable/receivable
• inventory listings
• contact information for customers and suppliers

Review customer and supplier contracts and verify what penalties (e.g., legal, financial), if any, would be incurred from being unable to meet responsibilities or fulfil agreements by the promised deadline. Record all of this information in one document or spreadsheet. If you can, add these notes to your customer relationship management (CRM) software with each supplier’s contact information.

In your business continuity plan, you may want to include an estimate of the decline in the company’s competitiveness if the business could not operate for a while.

Create Many Plans

As the saying goes, “Expect the best but prepare for the worst,” and that is the next step – thinking about “the worst.”

Special note from Linda: In the next paragraph, I suggest thinking about different types of disasters. It may provoke stress and anxiety. Please work with a friend, colleague, business partner, or therapist if you feel you can’t do this part alone.

Think about various types of disasters (e.g., accidents) that could happen to you, your loved ones, your employees, or your equipment. What if something happened to any combination of those or all of those? Imagine you had no computer or no internet service for an extended period. Is your business prone to natural disasters such as flooding, landslides, or severe weather?

The point is to imagine how each catastrophe would affect your business and create a plan to keep functioning – even if it is just at a minimal level.

Plan for Equipment Failure

Whether your widget machine or photocopier breaks, you should know who to turn to for help. Create a procedure for your employees on what to do if a breakdown occurs. Employees should know who in your company can authorize a service call and when to contact them. List the contact details for the primary and secondary equipment service companies and any account numbers. Likewise, ensure each of your service companies and suppliers knows who is authorized to request service at your company.

Computer viruses and malware or plain-old hardware failure – having backup systems in place is essential. Sometimes viruses can attack your backups, so your recovery plan should take this into account. Since everyone has a different computer setup, I suggest that you make an appointment with your technical support specialist (If you don’t already have one, get one!) to set up a recovery plan suitable for you.

Plan for Absent Staff

If any member of your staff is absent due to an emergency, other team members should be able to pick up the slack, at least temporarily. Keep contact and emergency contact information for all staff up to date. If you don’t use a password management system, have each staff member create a file with their passwords and other critical details to perform their tasks. You and at least one other team member should know how to access that information. Ideally, you should train at least two people on each system (e.g., newsletter publication, widget machine cleaning, etc.) so if one person is not available, others can do the job.

Plan for Complete Shutdown

One dire situation is having no electricity or access to your office or computer systems. Yet, if you plan correctly, you can still do business from your backup systems. You might not produce your widgets, but you could operate (pay suppliers and employees and communicate with clients) from a new location with borrowed computer systems. Besides cloud backups of computer files, keep paper copies of vital records (incorporation documents, contracts, patents, lease/ownership, insurance certificates, etc.) in a secure off-site location just in case.

Plan for Your Absence

It’s one thing for a staff member to be out of the picture, but it’s more challenging when the CEO/founder/owner is unavailable. It would be best to designate someone else to make executive decisions in the company’s best interest. The designate should have access to account numbers, information for key contacts, online passwords, and security codes and know where to find these items.

The designate should know what they are permitted and not permitted to do when the CEO is unavailable. In dire situations (illness, death), their actions may be governed by the Power of Attorney. However, in some circumstances (e.g., you are halfway around the world caring for an ill family member), the Power of Attorney may not be activated.

Test Your Business Continuity Plan

The final and most crucial step is to test your BCP. Secretly lockout your equipment, tape laptops closed, or throw a bedsheet over your head and pretend you’re the “Ghost of the CEO.” Get the test conditions as close to reality as you can. It’s a good idea to alert your staff to the BCP Test but don’t give them too much preparation time because, in real life, no one knows when a disaster will strike. Also, tell your staff that the BCP Test is a learning experience, and their input can contribute to keeping the company operational.

Have a team member take notes of any problems during the test. Use this information to improve your process for the next time. You might find that Team Member Bob wrote down all his passwords, but no one can read his writing. Maybe CEO Betty is the only one who knows the answers to the security questions for the company bank accounts.

Once you’ve incorporated the improvements, redo your BCP Test. Correcting these problems before a critical incident arises and people are too stressed to think clearly is much better.

A business continuity plan takes time and effort to set up. Still, a well-developed process will ensure that your business will survive – and maybe even thrive – after a severe disruption. For more office organizing advice, check out our business organizing tips. You can also book Linda for a productivity workshop by contacting her through the website.

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