(3 Minute read)
You need a business continuity plan!
Yup, you heard me, get yourself a business continuity plan! In this pandemic ridden world full of uncertainties, small business owners need to have a plan B when plan A fails. This three part guide will look at how to quickly setup a business continuity plan for your business. It will also discuss how to best use it. So let’s kick it off with the first question:
What is a business continuity plan?
A business continuity plan is a document that outlines key steps to keep your business operational in times of trouble.
This is the plan that you fall back on in case a natural disaster happens, illness befalls you or, say a global pandemic totally changes the way you do business. A good continuity plan allows for flexibility in approach while still ensuring that your core business activity remains viable. It also helps you rearrange your business processes to accommodate the changes in the environment that will affect your business.
That’s what it is in a nutshell.
Why should you have a business continuity plan?
More importantly, why shouldn’t you?
Sure business is all fine and dandy right now, but what happens if you fall sick? What happens if your shop is forced to close down? What happens if your warehouse burns down? A business continuity plan is part risk management document and crisis management. It is a plan that is designed to keep you sane and focused while your business enters turbulent times.
Think of it as a rescue tool that you break out when you need to save your business. Basically you will want it ready before you actually need it.
Building your business continuity plan
A business continuity plan (BCP) generally consists of:
#1 Outline of Key products/services and threats
This section is an overview of the key products/services sold by the business. More importantly, it outlines the threats that can affect the delivery of said products/services.
Let’s use the example of Johnny’s Yoga Haven.
Johnny is a Yoga teacher with 15 years of experience. He has had some moderate success with his Yoga studio. Ever since the pandemic caused his area to go into lockdown, Johnny has been thinking about how to build better business resilience. So he starts his BCP by outlining his key products/services:
Johnny’s Yoga Haven products/services:
- Group Yoga classes
- Private Yoga classes
- Sales of Yoga books
- Sales of Yoga incense, chants and other paraphernalia
From there, he outlines a few threats that face his business such as:
- The rising pandemic situation
- Potential lack of instructors (as most Yoga teachers work on a contractual basis)
- Customer resistance to pricing (which may be exacerbated by the pandemic situation)
For each threat, he jots down some notes for mitigation strategies.
For example, for the rising pandemic situation, he could run online classes to keep the group and private yoga classes active. He could also look into producing more health and wellness book electronically to sell to his clients.
For the potential lack of instructors, he could consider increasing his own personal hours. He could look at hiring more instructors, or engaging an instructor on a full time basis.
For the customer’s resistance to pricing, he could explore offering his classes at different price points. He may even decide to create a more affordable subscription service to his business for clients who are more price resistance.
The main purpose of this section is to clearly outline WHAT makes your business money and what are the potential threats that could affect it. Then, you need to come up with some brief ideas on how you could mitigate those threats. So have a think about what your business’ core products/services are and jot down some notes on threat mitigation ideas!
#2 Key support activities
Key support activities focus on activities that support the delivery of your core products/services. In this section you will want to be writing down your:
- Marketing Channels – Social media, word of mouth, website. Literally anything that you use to get word out about your brand and your business! What are your marketing channels and how do they work? How resilient are they to external impacts?
- Supply Channels – Where do you get your supplies from? If you are in manufacturing, how will you ensure a steady supply of raw materials coming in?
It is as important to consider the impact that a business disruption will have on your support activities as your core products/services. Without the support activities, you may not be able to deliver core products/services.
Let’s go back to Johnny’s Yoga Haven.
Johnny has identified that his most important marketing channel is social media. He has a lot of followers on instagram. Social media is largely online and thus resilient to the pandemic, however new changes in the terms of service could impact Johnny’s account as he does not have a business instagram account. So he needs to take into account all factors that could potentially affect his marketing channel.
Johnny relies on a local provider for his yoga mat, blocks, stretching bands and exercise balls. He checks his equipment every month for signs of wear and tear. Fortunately, many of his clients bring their own mats, so he does not have to replace his mats very often. However, a supply disruption could see him turn away newer clients if there are no mats available. He could make it a point to order in a new batch of mats every year to ensure a consistent supply of mats.
#3 Key individuals and connections
This section outlines who are the key individuals in the business. This can include the business owner, key staff members and even sub-contractors that the business relies on to perform certain functions. You will also want to outline some strategies that can kick into place if any of your key individuals are not available or indisposed.
For example: Johnny identifies himself and his co-owner Jerrica as key individuals of the business. He also hires yoga instructors to run his classes. These are all outlined as key individuals for his business.
Key connections are also outlined here – looking at the systems that are in place for the business to run smoothly. Examples of key connections can include things like booking systems, access to equipment. Connections with suppliers, business support groups and even your accountant are other things to look at.
That’s all for part 1!
Stay positive team!
Need a business continuity plan done? Get in touch with me at www.shadvisory.co.nz!