Introduction
Crises such as bird flu outbreaks, fire damage, illness of key staff or IT failure could make it incredibly tricky to carry on “business as usual”, especially for small businesses. However, planning can ensure you minimise the potential impact of these disasters.
This article helps you identify potential risks for your business, and helps you to make preparations for disaster scenarios and test how your business is likely to cope should the worst happen.
Why you need to plan for possible crises
The larger your business is, the more resources you’ll have at hand to enable you to cope. So for small business owners and managers, who have few resources, planning is critical. Failure to plan could mean losing customers while you're getting your business back to normal, or at your business may have to cease trading.
Plan Plan Plan
T help you plan, you could:
- Identify potential risks;
- Ascertain how you intend to minimise the risks;
- Ascertain how key individuals will react;
- test the plan
Simply, this means if you're reliant on computer information, identify it as a risk, think about how to minimise the risk – i.e. it would be a good idea to install a back-up system so you have a copy of key data in the event of disaster. Lastly, back up frequently and check the back ups.
Benefits of a business continuity plan
- A plan gives you a reference in a disaster;
- It will therefore make provide step by step answers and actions to take;
- It will minimise disruption to the business and its customers.
If you work with the plan and stay calm it will also prove to customers, insurers and investors that your business is tough enough to cope with anything - possibly giving you the edge over your competitors.
Crises that could affect your business
Depending on your location, line of work etc, here are some possibilities:
- Natural disasters they are more common than you think;
- Theft or vandalism – think about vandalism of machinery or vehicles, costs as well as health and safety risks;
- Fire
- Power cut
- IT system failure - computer viruses, attacks by hackers or system failures could affect employees' ability to work effectively;
- Restricted access to premises - how would your business function if you couldn't access your workplace - for example, due to a gas leak? Could you use somewhere else? Work from home? What would your employees do?
- Loss or illness of key staff - if any of your staff is central to the running of your business, consider how you would cope if they were to leave or be incapacitated by illness;
- Outbreak of disease or infection such as the bird flu;
- Terrorist attack - consider threats to your employees and your business operations, either where your business is based or in locations to which you and your employees travel. Also consider longer-term effect on your particular market or sector;
- Crises affecting suppliers – can you source alternative supplies?
- Crises affecting customers - will insurance or customer guarantees offset a client's inability to take your goods or services?
- Crises affecting your business' reputation – could you do a product recall?
Grade the risks so you can prioritise
You could easily grade the probability of a particular crisis occurring, perhaps on a 1 – 5 scale or as high, medium or low. This will give you an idea of what is really a priority and your business' attitude towards each risk. If this risk is low, you might decide to do nothing about it.
Potential impact of a crisis
Look at risks from the perspective of your customers. How would they be affected by each potential crisis? Are they going to look to alternative suppliers?
Minimise the potential impact of crises
Once you've identified the key risks your business faces, you need to take steps to protect against them.
Premises - good electrical and gas safety could help protect premises against fire. Installing fire and burglar alarms makes sense.
Think what you would do in an emergency if your premises couldn't be used. For example, you might suggest an arrangement with another local business to share premises temporarily if a crisis affected either of you. An alternative would be to use a business continuity supplier, which can make alternative premises available at short notice, however, this is costly.
Equipment/machinery - If you use key pieces of equipment, you may want to cover them with maintenance plans guaranteeing a fast emergency call-out and specialised insurance.
IT and communications - Installing anti-virus software, backing up data and ensuring the right maintenance agreements are in place can all help protect your IT systems. You might also consider paying an IT company to regularly back up your data offsite on a secure server.
People - ensure you're not dependent on a few staff for key skills by getting them to train other people. Perhaps you could get temporary cover from a recruitment agency if illness left you without several key members of staff.
Insurance – need we say more? Choose a provider carefully
Plan how you'll deal with an emergency
Draw up a business continuity plan setting out in writing, a step by step plan how you will cope if a crisis does occur.
It should include:
- the key business functions you need to get operating as quickly as possible and the resources you'll need to do so
- the roles of individuals in the emergency
Making the most of the first hour after an emergency occurs is essential in minimising the impact. As a result, your plan needs to explain the immediate actions to be taken.
Consider whether you'll need to give staff specific training to enable them to fulfil their responsibilities in an emergency situation. Ensure all employees are aware of what they have to do.
Arranging the plan in the form of checklists can be a good way to make sure that critical steps are followed.
Include contact details for those you're likely to have to notify in an emergency such as the emergency services, insurers, the local council, customers, suppliers, utility companies and neighbouring businesses.
It's also worth including details of service-providers such as glaziers, locksmiths, plumbers, electricians, and IT specialists. Include maps of your premises' layout to help emergency services, showing fire escapes, sprinklers and other safety equipment.
Set out how you'll deal with possible media interest in an incident. Appoint a single company spokesperson to handle questions and try to be positive in any statements you issue. Ensure staff, customers and suppliers are informed before they find out in the media.
Finally, make sure hard copies of your business continuity plan are lodged at your home and with your bank and at the homes of other key members of staff.
Test the plan
Think about the things that would cause most disruption and that are most likely to happen to your business. Then make sure that your plan covers each of the risks. Ask yourself the following key questions:
- Does it set out each employee's role in the event of each emergency?
- Have you set out the right steps to take?
- Is the order of the plan correct so that priority actions to minimise damage will take place immediately after the incident?
Check the telephone contacts you noted to make sure they are correct. Finding the right numbers in a crisis could use up valuable time.
Update the plan
Update your plan regularly to take into account your business' changing circumstances. If you hire new staff for example, for example, you could face an entirely new set of risks. You'd need to draw up new maps for the emergency services and amend any contact numbers necessary
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