Business Accountants: Continuity and Contingency Planning: A Comprehensive Guide

 

A Business Continuity Plan (BCP) identifies critical business components, assesses potential risks, and prepares you for quick recovery. Contingency planning, a key part of BCP, involves having a backup plan if your primary plan fails. It’s your essential Plan B.


Your BCP should address not only natural disasters but any risk that could disrupt vital business activities.


Difference Between Continuity and Emergency Planning


Emergency planning covers immediate crisis procedures, while BCP focuses on how to restore core business functions post-crisis.


Why You Need a BCP


While not legally required, BCP offers several benefits:


  • Increases chances of business survival post-disaster.
  • Attracts potential buyers and investors by demonstrating preparedness.
  • Boosts staff confidence and engagement.
  • Identifies current business improvement opportunities, like outsourcing payroll.
  • Potentially lowers insurance premiums due to increased resilience.

Step-by-Step Guide to Business Continuity Planning


This guide helps you protect crucial business aspects. As you follow each step, consider your unique risks, how to resume operations swiftly, and alternative options if normal operations can’t be restored immediately.


Step 1: Identify Key Products or Services


  • Questions to Ask:
    • What are the biggest risks to your most profitable activities? How can you mitigate these risks?
    • What is essential for key activities (e.g., raw materials, functioning website)?
    • Can you operate without your full product/service suite?
    • What is your least profitable activity? Can you pause or stop it temporarily?

Step 2: Identify Key Internal People


  • Questions to Ask:
    • Can your business continue without some staff?
    • Does your business rely on one person for key tasks? What if they are unavailable?
    • How can you get temporary staff quickly?
    • How can you support affected staff and their families?

Step 3: Identify Key Connections


  • Questions to Ask:
    • How robust is your supply chain?
    • Do you have backup suppliers or manufacturers?
    • What are your transport alternatives if disrupted?
    • Who can assist in recovery (e.g., bank, landlord, advisors)?
    • How can you access premises or IT systems if restricted?

Step 4: Identify Essential Equipment and Supplies


  • Questions to Ask:
    • Can you borrow or rent equipment if yours fail?
    • Can staff use home computers for work if needed? Identify who has suitable devices.

Step 5: Consider Relocation Options


  • Questions to Ask:
    • How can you operate if you need to vacate your premises?
    • Can staff work from an alternative site or home?
    • How will you communicate location changes to customers?

Step 6: Consider Insurance Options


  • Questions to Ask:
    • What potential business risks do you face?
    • Is business interruption insurance a good option?

Step 7: Identify Who Can Run the Business in Your Absence


  • Questions to Ask:
    • Who can take over important tasks if key members are unavailable?
    • What are the roles of each staff member in recovery?

Step 8: Keep Contact Details Handy


  • Questions to Ask:
    • Do you have emergency contacts for staff, clients, suppliers, and emergency services?
    • Are contact details up to date?

Step 9: Back Up Important Data


  • Questions to Ask:
    • What data is critical to your business?
    • Do you back up data regularly on a hard drive, server, or in the cloud?

Step 10: Put It Into Practice


BCPs should be regularly tested with relevant staff, at least annually. Conduct 20-minute stress test exercises to prepare for various scenarios and update the plan as necessary.


Ensure staff know their roles even if you’re not available. Keep the plan accessible to everyone.


By following these steps, you can build a resilient business capable of withstanding disruptions and continuing to thrive.

 

 

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