Hope for the best, prepare for the worst. It’s a common sense philosophy that business owners would do well to heed by. SMEs without a business continuity plan can find themselves in serious trouble if something unexpected occurs, and no contingency guidelines are in place.
Such concerns will be uppermost in some entrepreneurs’ minds this week, as today marks the launch of Business Continuity Awareness Week, an event designed to encourage enterprises to take a belt and braces approach to disaster recovery, particularly if they’re at the smaller end of the scale. Evidence shows the smallest firms are the most likely to ignore any risks their company face, and put their livelihoods in jeopardy as a result.
- Fewer than one in three small organisations has a business continuity plan, according to researcher Databarracks. This compares with 54 per cent of medium entities, and almost three-quarters of large firms.
- When businesses were asked if they intended to implement a business continuity plan in the next 12 months, more than 40 per cent of small companies said no.
Why SMEs don’t plan – but the risks still exist
The reasons SME owners give for not having considered the ‘what if?’ scenarios of business life are not hard to guess – time, and cost. But about 18 per cent of bosses also blame the poor skills of their staff, saying they aren’t up to conducting proper tests. Others naively say they’re too small to have to worry.
Of course, any such excuses are flimsy at best, and companies really can’t afford not to have a plan. If something does go wrong they could be out of operation, out of pocket, and, eventually, out of business. Eight out of ten small firms affected by a major incident close within 18 months, the Federation of Small Businesses estimates. So, what are the big threats for small businesses?
Loss of premises. It could be due to bad weather, such as last year’s floods, property damage caused by criminals, or even something as mundane as a gas leak – there are many reasons a workplace may be temporarily out of bounds. This can have a huge impact on a business’s ability to operate.
Data loss. Losing information can be ruinous to a company, and there can be a number of causes. Human error is a common fault, with 18 per cent of data loss cases down to members of staff, Databarracks found. Corruption of files is the reason in 15 per cent of cases, while an internal security breach causes problems seven per cent of the time. Natural disaster accounts for five per cent of data loss events.
Cyber attack. More SMEs are falling foul of cyber fraud, and sensible firms will be vigilant about backing-up information regularly, and beefing up their online security. About half of small companies plan to review their security policies, regardless of whether they’ve made any recent changes, Databarracks calculated, but this fell short of the 70 per cent of medium firms that planned to do the same. Digital security for your business is as important as locking your premises’ front door, so make sure you have necessary measures in place.
Loss of utilities or transport. If you were to be without electricity, water, or gas, it’s probable you’d find doing business very difficult, if not impossible. Equally, telecommunications and IT infrastructure being out of operation for just a few hours can be extremely damaging. And many SMEs need vehicles to function, or decent transport infrastructure to get from A to B. Imagine disruption to these services, then think about possible solutions – generators, alternative ways of travelling, or whether you could depend on mobile technology.
Losing staff, suppliers, partners, or customers. A number of key employees leaving in rapid succession can be very destabilising to a business, particularly a smaller one. Also, suppliers, business partners, or customers suddenly disappearing could present serious challenges to a company’s wellbeing. See if you can spread your risk, or develop reciprocal relationships with other businesses should a crisis ever occur to either of your organisations.
Whatever the perceived threat, a wise business owner will consider them all, undertake a risk assessment, and try to come up with a method for handling the imagined outcome.
Things to consider for your business continuity plan
Planning for emergencies requires a little thought, soul-searching, and some effort. Consider the following:
- What are the specific key risks to my business? What would be the impact on the firm if each particular scenario were to occur, and over what period – 24 hours, several days, weeks, or months? Assess how likely an event is, then determine how much effort should go into planning against it.
- What’s the period of time your core products or services can afford to be out of action? Knowing by when you need to be at least partially operational again will have a bearing on the rest of your contingency planning.
- Identify the key elements that need to be in place for your business to fulfill its main function. What is the minimum number of staff you need to get basic things done? What skills are an absolute must for the enterprise to work?
- Do you have alternative premises if anything were to happen to your current workplace? Obviously, you won’t run dual business sites if you don’t need them, but think about where you could move temporarily if necessary.
- Which pieces of equipment are essential to your most important activities? This will probably also include IT infrastructure, and having some data back-up system, possibly a cloud-based service.
Who does what?
Once you know what matters, and have a plan to address possible concerns, decide who’ll be responsible for carrying out particular functions. Someone at the top of the company should oversee the business continuity plan as a whole, but then individuals further down the company should implement the programme if the time comes. Training may be necessary to ensure people are ready to act when called upon. You should also review business continuity guidelines regularly, and keep them up-to-date with the enterprise’s needs, and structure.
If business owners want more help on planning for anything the future may hold, the UK Government’s Cabinet Office teamed up a few years ago with the Emergency Planning Society, and the Business Continuity Institute to produce a guide called Business Continuity for Dummies. A group of major insurers has also developed a free software toolkit called ROBUST to allow SMEs to test where the vulnerabilities in their business lie. Planning for every eventuality isn’t the act of a pessimist. On the contrary, it’s a positive statement that you want your business to operate, and succeed – whatever troubles it may encounter.