Partner Article

Does your business have a ?Plan B??

Tara Kneafsey, SME Director at RSA, the UK’s largest Commercial insurer, discusses the importance of business continuity planning and shares her advice on having a ’plan B’.

As a leading SME insurer, we know that small business owners face a raft of business interruption threats; from fire and theft to loss of intellectual property or crucial members of staff. This time of year also brings unique risks, with thousands of businesses already adversely affected by snow, ice and flooding.

Businesses must be prepared for this – not least as, following subdued summer sales, many retailers are relying on Christmas to boost their annual takings.

However, our research shows that small retailers are jeopardising their livelihood by being dangerously unprepared for interruptions to the Christmas trading period. In fact, many small retailers are more vulnerable to business continuity threats this year than last year, as a result of cost-cutting during what remains a tough trading climate.

Crossing your fingers and hoping for the best is just not enough, though. Almost one in four of the retailers we spoke to as part of a recent study said they have not reviewed their business continuity plans since last year, and the same amount again admitted to not having a business continuity plan in place at all.

Developing a business continuity plan is often viewed with scepticism and presumed to be something that only larger companies need to undertake but, for any company, even with the best risk reduction measures in place there will always remain a residual risk. Understanding that risk and planning for the fall-out from a likely incident can greatly reduce its impact. Therefore, an up-to-date business continuity plan can make or break a business in times of crisis.

Planning for the worst doesn’t need to be complex and should match the specific needs of the business. These six simple steps can help ensure you have a workable ‘plan B’ should the worst happen:

• Identify the key elements of the business. What are the critical processes and functions? Who are your key suppliers, customers, personnel? Do you have specific equipment or machinery that you can’t function without? What are your most profitable products or services?
• Develop an impact analysis to determine how critical some of these core elements to your business are. For example, can your e-commerce business cope if your high street store is shut? Are you in a position to quickly hire temporary staff in the event of several people falling ill at the same time? Consider seasonal as well as more general business needs, such as higher stock levels needed in key trading periods.
• Use this insight to develop your own business continuity plan. This should be divided into two parts; crisis management planning and recovery planning.
• Your crisis management plan should include evacuation procedures, crucial information for the emergency services (e.g. site layout, location of hazardous substances), a list of essential contacts (e.g. suppliers, utility companies) and a pre-agreed communications path for keeping key stakeholders updated (e.g. staff, suppliers, financiers).
• Your recovery plan should cover pre-planning of the resources available to your company in case of business interruption. This might include holding lists of temporary office or manufacturing space, a reciprocal agreement with another business to use their premises in case of emergency, or details of a third party supplier who can meet the needs of your customers on your behalf.
• Once a business continuity plan is in place, make sure you keep it up to date. Review it regularly – for example, are the emergency contact details listed still accurate, do you still work with the tradesmen you have on your list, or are there new ones to be added? Don’t forget to keep a copy off-site, too.

This was posted in Bdaily's Members' News section by Tara Kneafsey .