The COVID-19 crisis has caused widespread economic damage in a way that is similar to other natural disasters of recent years, like Hurricane Harvey and Hurricane Irma.
But instead of affecting just a few cities or states, the coronavirus pandemic has made every U.S. state into a federal disaster area. Dealing with the pandemic and its economic impacts has caused many business leaders to revisit their plans for disaster recovery — and business continuity planning (BCP).
Business Continuity Planning During COVID-19 and Beyond
As you prepare your business to survive COVID-19 and beyond, it's important to consider the fundamentals of business continuity planning. The pandemic is prompting business leaders at all levels to reassess their strategies, rethink their assumptions and learn on the fly. But no matter what kind of business you operate, there are several key principles of BCP that might be helpful in thinking about the new challenges ahead as you work toward rebuilding and recovering after this crisis ends.
The Importance of Business Continuity Planning
Having a BCP plan in place for your business is essential for your overall disaster preparedness, as it will help you prepare for the unknown, give you a plan to access resources for a speedy recovery in case disaster strikes, and help you evaluate and improve your business's overall resilience to unexpected disruption throughout your operations.
This is especially important if you are doing business internationally; if your business operations could be affected by political instability, terrorist attacks, acts of war, infrastructure problems, labor unrest, or any other local issues in another country, anywhere in your supply chain or in your network of business partners, you need to prepare for how to deal with those contingencies. The COVID-19 crisis has especially demonstrated how interconnected the world economy is and how profoundly our lives can be affected by events in other countries.
The complexity and interconnectedness are significant reasons for your business to write a detailed, formal business continuity plan. It's absolutely imperative, says Edward Colson, owner of Ready Northwest, an emergency management provider based in Oregon.
“Every business, from a Fortune 500 company to a food cart, needs to have some sort of Business Continuity Plan in place.”
- Edward Colson
Owner of Ready Northwest
Indeed, the stakes are high. John Clouse, an emergency/disaster preparedness planner and consultant based in Kentucky, explains: "Post-disaster surveys have indicated that if your small business goes 'offline' for 10-14 days, there is a strong probability you will not recover." Colson and Clouse recommend the following key elements for your business continuity plan:
1. Identify the risks and hazards facing your business.
"A Florida-based business will have different risks than a Minnesota-based business," Colson says. Make sure your inventory of risks and hazards includes all the geographic areas where your business operates including your supply chain, vendors, distributors and partners.
2. Identify critical functions.
"What are the important functions that need to be restored after an interruption? If employees are working during or right after an event, are payroll and IT more important than other areas of the organization?" asks Colson. Business leaders need to prioritize the key functions to ensure and sustain orderly operations.
3. Back up your data.
Backing up your essential business data is a crucially important element of BCP. "That includes client lists, customer accounts, contact lists, vendor agreements, insurance policies, business licenses and anything else that is important to keep your business running," suggests Clouse. "Keep the back-ups maintained offsite at least 50-100 miles away so the same disaster doesn't destroy them."
4. Location, location, location.
Small businesses are particularly vulnerable to location-specific disasters, especially if you have critical facilities or multiple business operations on the same site. It's important to consider how your business would recover from the loss of a facility, loss of people, loss of technology including data and the loss of critical third-party service providers in the event of an unexpected event or disaster. Make sure you have a plan in place to pivot as needed should a location be unavailable, damaged or at worse destroyed.
5. Go remote.
Even before COVID-19, more and more companies were hiring remote employees and using online tools to conduct business remotely, which proved extremely useful when the pandemic absolutely required it. The ultimate goal is to ensure your business remains functional, resilient and less location-dependent. "Anything that can be done remotely should be looked into as a possible means for keeping your business afloat in troubled times," Clouse says.
6. Have vendor agreements in place.
One of the big challenges in the event of an incident or disaster is maintaining orderly business operations with vendors and partner organizations. That's why Colson recommends planning ahead.
"Have a listing of all vendors and their emergency contact info, and let them know prior to a disaster what your organization's plan is and how soon it includes a resumption of operations," Colson says. "Ask how soon they can be up and running to support your organization."
By setting expectations ahead of time, you can show your vendors you're prepared for the worst, and hopefully prompt them to update their own continuity plans so that everyone can get back to normal operations as quickly as possible.
7. Stay compliant with regulations.
Depending on your industry, there may be specific regulatory requirements for your BCP. For example, you might be required to keep a detailed plan in writing for how to handle sensitive customer data in the event of a disaster or disruption of operations.
In a bank's case, for instance, business continuity may be required from a regulatory perspective, but it is also critical from a strategic perspective. For any type of small businesses, it's important to take advantage of resources that can help you begin planning today so you can recover tomorrow.
Use your BCP regulatory obligations as a starting point to have a more in-depth discussion within your company and create the most comprehensive, robust BCP plan for your business's larger strategic needs.
8. Prepare and train employees.
Your people are your business's most valuable asset, especially in times of disaster that could potentially uproot them. Clouse recommends companies conduct "pre-event" preparations to assist employees in preparing their own families and homes for disaster.
"One of the simplest ways to do this is to host a 'Copy and Scan' event at your business for your employees, during which your people can have a dedicated occasion for copying and scanning important personal documents and securing them on a rugged thumb drive," Clouse says.
"Another option is to give your employees a pack of emergency supplies for their families in case they need to flee their homes for an evacuation. If your staff know that their families are safe, you'll be far more likely to get them to focus on the needs of the business."
9. Connect with your community.
In the event of a disaster, your business's recovery and long-term success are interdependent with the success of your surrounding community.
"Reach out to local emergency management authorities in your area for assistance, resources or ideas for how your business can be of assistance to others," Colson says.
10. Build resilience for the future.
The COVID-19 crisis is exposing the fragile foundations of so many American businesses, many of which have limited cash reserves and are vulnerable to an economic downturn. According to a recent survey, 35 percent of small business owners said that their businesses could only survive for less than three months of the economic conditions of the COVID-19 crisis.
Few people would have expected a catastrophic event like a pandemic to occur, but this crisis is also a learning opportunity and a chance for business owners to revamp their businesses, improve cash flow, increase their cash reserves and rebuild for a stronger future.
Every business has the potential to be challenged by some of the most unexpected crises, devastating risks and "black swan events." The current pandemic has also demonstrated how valuable business continuity planning can be.
Before the next crisis happens, take a step back from the daily routine and think strategically about big-picture threats and risks that might impact your business and strategize ways to adapt, innovate and build resilience for the future.