Developing a business continuity plan
Published: February 7, 2014
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Developing a business continuity plan
Each Pocono-Northeast business needs to develop a continuity plan that can help guide its existence. There are entities that can help, such as the Small Business Development Centers at various universities such as Wilkes, Scranton, Lock Haven, Shippensburg, Bucknell and Kutztown.
Staff members are available to meet with businesses, as well as making presentations to chambers of commerce and other business groups. There are many different reasons why a continuity process becomes vital. Some of these are as follows:
n Natural disasters, floods, hurricanes, sink holes, tornadoes, and others.
n Accidents such as fires, loss of power and associated equipment, loss of data.
n Cyber attacks, loss of critical information.
n Law suits, penalties, scams, and thefts.
n Loss of major customers, contractors, or vendors.
n Loss of key employees or funds.
The continuity plan would provide the guidance necessary to examine all factors and remain a business operation for the future.
The continuity plan needs to consider a survival strategy that evaluates the condition of the business, customers, suppliers, and the location. List all the options and decide on a strategy that makes the best sense to the operations of the business despite the issues being faced. Consider what the risks are relative to reopening or starting a new business such as net worth, liquid assets vs. long-term investments, age of the owner and retirement needs, and probable insurance recovery. The latter means realistically knowing what is covered and whether the insurance company is solvent and can pay out an appropriate sum.
The plan should undertake a review of assets that have been lost or are still remaining, looking at the place of business, the inventory, production equipment/processes, key personnel and institutional memory, and business records.
Businesses that are smaller, weaker and under significant stress before a disaster or emergency are likely to fail. Thus, the reopening of a business under these circumstances requires a solid and knowledgeable examination of future financial resources as well as consideration of market share. These, and other factors are important irrespective of disasters and should be ongoing elements related to business operations.
Many times, after a serious disaster, it takes just as much talent, drive, energy, and commitment as it did to start the business in the first place. Therefore, the plan needs to take into account all of the factors that caused the owner to initiate the business in the first place.
Evaluate the business plan as if you were opening for the first time by talking to the appropriate Small Business Development Center, your financial institution, your banker, your accountant, and other available resources.
Conduct a market and location analysis based upon what is happening to the community as well as your owner personal needs. Estimate the financial resources necessary to reopen in the event of an emergency, considering finances, need for a new building, replacement of inventory, etc. Will your key employees be retained?
Depending upon whether or not your business was growing and profitable or whether it was losing to competition prior to the disaster will help determine the next appropriate steps. Stress can impact your thought process. This is why a business continuity plan is so essential.
The plan should include an assessment of the risks based upon location, events historically known, critical operations of the business, critical vendors, key employees, an assessment of the impact such as disruption, severity of interruption and damage, ability to communicate, resources necessary to resume operation, availability of employees, general preparedness level, human resources by preparing employees for emergencies, policies for working remotely and other factors, preparedness by operation such as back up needed, discussion of plans with major vendors and customers, communications, second set of files stored off site, as well as other elements that are important to the overall readiness of the business facing disruption.
The Small Business Development Center has a 10-page survey form that can serve as the basis for the continuity plan. Call 570-408-4340, e-mail email@example.com, and web site at www.wilkes.edu/sbdc. Contact can then also be made at the other SBDCs.
Howard Grossman is the former executive director of EDCNP, now NEPA Alliance. He operates HJG Associates in Dallas. E-mail him at GrossmanHJ@aol. com.