Home » Bookkeeping articles » What Is A Business Contingency Plan?

What Is A Business Contingency Plan?

June 16, 2021
Bill Kimball

small business continuity plan

A business continuity plan is a logistical plan companies use to restore interrupted business services. Business operations face several types of disasters that can partially or completely interrupt their operations. Natural disasters include floods, fires, earthquakes, tornadoes or hurricanes.

Business continuity management often begins with risk identification and assessment. No region or business is immune to a natural or man-made disaster.

Empower your people to go above and beyond with a flexible platform designed to match the needs of your team — and adapt as those needs change. Our world-class consulting team is here to help your organization realize the lasting advantage of Smartsheet. Get up and running fast with streamlined implementation and solution building to address your immediate business needs.

small business continuity plan

usiness continuity planning requires a three-pronged approach comprised of education, security, and backup. It won’t matter if you’re a victim of ransomware if you’ve lost all your data. strong encryption algorithms and a scheme that makes it difficult to crack within a reasonable amount of time. Ransomware is a type of malicious malware that threatens to publish a victim’s data or eternally block access to it unless a ransom is paid. Phishing is the fraudulent practice of sending out mass emails claiming to be from a reputable company or person to convince individuals to reveal personal information, such as passwords and credit card numbers. Phishing tactics have existed for over 20 years, and every year they become more convincing.

In the face of a weather-related disaster, where your business might have been damaged, think about your employees and others you do business with such as vendors. They, too, might have suffered damage to or loss of their property – homes, vehicles, etc. Jump-start new projects and processes with our pre-built sets of templates, add-ons, and services. Business impact analysis, recovery, organization, and training are all steps corporations need to follow when creating a Business Continuity Plan. Brex Treasury is not an investment adviser, and therefore investors should consider the investment objectives, risks, and charges and expenses carefully before investing. See program disclosures and the applicable fund prospectus for details and other information on the fund.

Lastly, disaster simulation testing can be quite involved and should be performed annually. For this test, create an environment that simulates an actual disaster, with all the equipment, supplies and personnel who would be needed.

Infrastructure – Relates to disruptions caused by crime, power or communications outages, or access to the facility. Technology evolves, and people come and go, so the plan needs to be updated, too. Bring key personnel together at least annually to review the plan and discuss any areas that must be modified.

The Purpose Of Contingency Planning

The impact has the potential to not only affect every single employee, client, and stakeholder but the overall reputation of the business. Just like the fire drills, every employee should know exactly who to call in the event of a security breach or data leak. The longer it takes to figure out who to call, the deeper the attack will go. Wasting valuable time during a security breach can cost you money and data that may never be retrieved. Cybercriminals bet on small businesses to forgo proper cybersecurity and are able to weasel their way into their networks, stealing company data, customer data, credit card information and account numbers. This doesn’t have to (and probably shouldn’t) involve shutting down your business to see how your staff responds. Tabletop exercises, in which someone creates a scenario and the individuals around the table take on roles, can be an effective way to talk through the details of your plan, Brown says.

You can use the results of your impact analysis to rank your risks in order of priority. and U.S. territories, have laws requiring businesses to notify individuals whose personally identifiable information has been stolen or released in a data breach. Every business should have a contingency plan so it can resume its operations as soon as possible after a disruptive event occurs. The failure to protect your business from human error, hardware failure, natural disasters, or security threats can be detrimental to your business.

access to the software, hardware, and data required to resume normal business operations in the event of a natural or human-induced disaster. And make sure each department or team of employees has developed their own plan to recover operations independently as well. Then, figure out the employees who have the biggest role in delivering those products and services to those customers. Arrange backup vendors or suppliers to provide you with critical resources and materials.

School Business Continuity Plan Template

Join over 100,000 of your peers and receive our weekly newsletter which features the top trends, news and expert analysis to help keep you ahead of the curve. The name of insurance agent, type of insurance, policy numbers, deductibles, and policy limits. You may want to consider Business Interruption Insurance, which compensates you for lost income if you have to close your doors when disaster strikes.

small business continuity plan

Before you create your business continuity plan, it is essential to conduct a regulatory review to identify the requirements from oversite bodies. For medium to large businesses, these may include requirements from international bodies, state agencies, federal agencies, and industry regulators. Many organizations test a business continuity plan two to four times a year.

Recruiting strategy tips and advice from hiring experts and seasoned business professionals. Read about the structure of a layoff letter due to COVID-19 with a free downloadable template for employers. A comprehensive list of tasks required to keep your operations going.

Use this template to document recovery objectives, teams, and strategies in order to accurately capture all facets of the continuity plan needed for an IT team. Organizations test a business continuity plan at least two times per year. The testing schedule depends on where your company is located, how high the risk from a natural disaster is, and the amount of turnover in the continuity team since the last test. Assign independent staff to monitor the drills in action and note any observations about shortfalls or potential gaps in the plan that the company should address. There is no denying the growing threat to company data— from system failure, loss, hacking, and theft. In today’s workplace, it is important to make sure you’re prepared for the worst before it happens. Developing a business continuity and disaster recovery plan can be time-consuming.

Understanding Business Continuity Planning (bcp)

Your Small Business Continuity Plan should also include an email alert system or call tree to keep your employees and key stakeholders in the loop about your recovery. With a comprehensive list of contacts, you can use phone calls, texting, and even social media to provide updates on your recovery process and let everyone know you’re still in business. One way to ensure your plan is not successful is to adopt a casual attitude toward its importance. Every business continuity plan must be supported from the top down. That means senior management must be represented when creating and updating the plan; no one can delegate that responsibility to subordinates. In addition, the plan is likely to remain fresh and viable if senior management makes it a priority by dedicating time for adequate review and testing.

For business continuity planning, operational resilience is also essential. Operational resilience boils down to location and team resilience. And how can a business owner keep teams productive, with continuous measurements in place?

Updates should be made to evacuation procedures, staff contacts, and communication methods as needed. The business continuity management team is responsible for implementing and executing your BCP. The size of your team is dependent on the size of your company and the way in which you plan on rolling out your program. The COVID-19 pandemic is a real-world example of an emergency situation in which a business continuity plan should be instituted. People – Contact information in the form of telephone and emails for employees, customers vendors, suppliers, etc.

Threats and disruptions mean a loss of revenue and higher costs, which leads to a drop in profitability. And businesses can’t rely on insurance alone because it doesn’t cover all the costs and the customers who move to the competition. Revise procedures, update all the plan copies, and redistribute them to the appropriate personnel. An emergency evacuation drill trains all employees, so they know what part they play in an actual evacuation. Continuity team members should take notes on how the evacuation progresses and make changes or special arrangements that should be updated in the plan. Gaps or deficiencies in the walk-through should be corrected and noted for an update. In the case of the Florida company affected by a hurricane, the team would be responsible for moving critical data, documents, and equipment from the vulnerable site to a safer location.

small business continuity plan

Monique Jennings, Paychex HR generalist, points to a business continuity plan that other small business owners may consider implementing. One of her clients came up with an employee-friendly solution to assure the continuity of operations. Employees should be informed of their roles and given the opportunity to practice business continuity procedures. It is wise to document the intended methods of communication with workers in the event of an emergency — via text message, phone, or email.

This plan should encompass every area of your business from the macro to the micro levels. Consideration and review should move through the entire company, including every division and into each department, role and function. Once the team that is working with you on the creation of the business continuity plan has the information from the BIA and any gap analyses, it’s time to get started on the creation of the BCP. Initially, the team should create a draft document, and then they can present it to the senior executives who have to sign off on it.

  • With those risks in mind, one would assume that all small businesses would have a plan in place.
  • Business operations face several types of disasters that can partially or completely interrupt their operations.
  • You know a retired salesperson who could step in for Susan temporarily.
  • If the staff is equipped with paper order forms, order processing can continue until the electronic system comes back up and no phone orders will be lost.

Contact us for a copy of the fund prospectus and recent performance data. Uninvested Balances in your Brex Cash Account will initially be aggregated with Uninvested Balances from other Brex Treasury customers and deposited in a single account at LendingClub Bank, N.A. Only the first $250,000 in aggregate deposits at the Clearing Bank will be subject to FDIC coverage.

The company should provide specific examples of a phishing email- how to identify, signs to look for, and who to ask if they’re not sure. type of cyberattack used to target small businesses is ransomware. Learn valuable insights for protecting your business against disasters or threats. Perhaps the most important step is to exercise and maintain your plan.

Is Business Continuity The Same As Disaster Recovery?

You should also let your vendors know how you’re doing and of any interruptions in service or delivery. A business continuity plan can help set your business on the right path to recovering from an unexpected interruption of your normal operations.

Included on this page, you’ll find a business continuity plan template, a small business continuity plan template, a business continuity framework template, and more. Along with testing the continuity team, the company should also test the BCP itself. It should be tested several times to ensure it can be applied to many different risk scenarios. This will help identify any weaknesses in the plan which can then be identified and corrected.