What Your Business Needs to Know About Business Continuity Planning - First Horizon Bank

The recent destruction caused by Hurricane Harvey and Hurricane Irma has helped to focus the minds of business leaders on the importance of disaster recovery — but disaster recovery is just one aspect of the broader and often overlooked topic of Business Continuity Planning (BCP).


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 disaster, 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 disasters and disruptions throughout your business 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.

Long before disaster strikes, it's important for your business to write a detailed, formal Business Continuity Plan. Edward Colson is the 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



The stakes are high: John Clouse, an Emergency/Disaster Preparedness Planner and Consultant based in Kentucky, says, “Post-disaster surveys have indicated that if your small business goes 'offline' for 10-14 days, there is a strong probability that 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 a disaster? “If employees are working during or right after a disaster, are payroll and IT more important than other areas of the organization?" Colson says. Business leaders need to prioritize the key functions to ensure orderly operations in the event of a disaster.


3. Back up your data.

Backing up your essential business data is a crucially important element of BCP. “Back up all of your critical data, including client lists, customer accounts, contact lists, vendor agreements, insurance policies, business licenses, and anything else that is important to keep your business running," Clouse says. “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 often particularly vulnerable to location-specific disasters, especially if you have critical facilities or multiple business operations at the same location. Mark Livingston, SVP-Director of Business Continuity and Records Management at First Horizon says, "Here at First Horizon, we focus our plans around how we 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."



“For some small businesses, you may need to consider how to recover from multiple losses should you have critical personnel and technology colocated in the same facility.”
- Mark Livingston

SVP-Director of Business Continuity and Records Management at First Horizon



Make sure your BCP plan accounts for the full range of impacts at your business-critical locations.


5. Go remote.

More companies are hiring remote employees and using online tools to conduct business remotely; this can also be useful in BCP because it can make your business more 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. “It's far better to have a plan to preemptively relocate staff and supplies to keep things moving in the event of disaster."


6. Have vendor agreements in place.

One of the big challenges in the event of a 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 BCP plan is and how soon you plan to resume 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 that you're prepared for the worst, and hopefully prompt them to update their own disaster plans so that everyone can get back to normal operations as quickly as possible.


7. Prepare and train employees.

Your people are your business's most valuable asset, especially in case of disaster. There are a few great ways to provide your employees with resources and training that will benefit your employees as well as your business. Clouse recommends that 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 where 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, then you'll be far more likely to get them to focus on the needs of the business."


8. 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.

Livingston says, "As a bank, business continuity may be required from a regulatory perspective, but it is also critical from a strategic perspective. There is an abundance of material available to small businesses, so it is important to take advantage of those resources. Begin planning today so that you can recover tomorrow."

With BCP, as with so many other aspects of business, it's not good enough to do only the bare minimum to stay compliant with regulations. Instead, 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.


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. Business Continuity Planning provides an opportunity to take a step back from the daily routine and think strategically about big picture threats and risks that might impact your business. You may even discover some key insights about your business operations that can help you improve your productivity and efficiency, even in “normal" times.

Business Success Begins with Cash Flow Management

Keys to Effective Cash Flow Management

2/22/2017

Read More