What is a Business Continuity Plan and Why Do You Need It?

The lack of preparedness in the SME space was exposed through the lens of the pandemic.

In the midst of recent economic strife and the public health crisis, businesses naturally divided along two lines: the prepared and the unprepared, and most did not escape unscathed.

This division also seemed to fall along another line: the size of the business. While most businesses were impacted by the pandemic, small businesses were unquestionably hit the hardest. In part, this skewed struggle maps back to cash flow and resources. African SMEs play a key role in the economy, and employ an estimated 80 percent of the continent's workforce in both the formal and informal sectors, but they are often the least resilient during times of crisis. This is because they often have smaller client bases, fewer cash reserves, and a lower capacity to handle commercial pressures than larger enterprises. On the other hand, larger enterprises typically have the advantage of having deeper pockets, a larger client pool, and are more well-equipped in general to manage crises.

Howbeit, resilience is not solely dictated by cash flow. Large enterprises have another advantage — business continuity planning and disaster recovery. These practices are standard operating procedure for large corporations, yet they are frequently perceived as too corporate or excessive for smaller businesses. Why are resilience processes bound by size? Are we not living in the age of scalability? Small businesses should have a comprehensive business continuity strategy to enable a healthy recovery from times of crises.

What is a Business Continuity Plan?

A business continuity plan (BCP) is a living document that details the procedures that a company should follow in the case of a major disruption or tragedy. It can help protect the company's assets and employees, while also allowing them to remain competitive in the days following a crisis.

The most basic business continuity requirement is to keep essential functions up and running during a disaster and to recover with as little downtime as possible. A business continuity plan considers various unpredictable events.

Depending on your specific organisation, business continuity planning could include planning for threats of downtime due natural disasters, fires, disease outbreaks, cyberattacks, and other external threats. One thing that is often overlooked by small businesses is the importance of also planning for the potential loss, permanent or temporary, of a key individual.

BCP for Key Person Risk

In addition to the external threats that must be covered in a BCP, it is of great importance, particularly when pertaining to SMEs, to also cover key person risk.

A key person in any business is described as an individual who is vital to the business’ success. Such an individual often possesses a highly specialised skill set or level of expertise relating to a variety of important business operations, thereby greatly contributing to the overall stability of the business. As a small business owner, an entrepreneur, or a self-employed professional, the key person is often you.

It might be a months-long absence due to a serious health-related reason. It might be a permanent departure such as retirement or death. Regardless, losing you will limit or halt your operations and could negatively impact your company’s bottom line. In essence, if your business cannot afford to lose you tomorrow, it is likely to fall victim to key person risk.

Why Do You Need A BCP?

A BCP prepares your company to withstand major disruptions. It removes the confusion that is that we so often find ourselves experiencing amidst disaster by offering a clear plan for what everyone should do.

Your BCP benefits many people in addition to business operations. By keeping operations running, you will be in a better position to keep your staff employed and maintain the jobs that support them and their families. You also continue to meet your clients at their need, impacting their lives as well as the lives of others who depend on them.

Although we cannot forecast how business circumstances, marketplaces, or environments will change, a BCP allows you to respond swiftly and decisively. This is critical for your business’ survival in the face of adversity.

Creating a business continuity plan is not just a smart business strategy; it is an essential component of ensuring survival during and after a crisis. If your organization is looking to create (or update) its business continuity plan, look no further. We are here to help. Contact us for a consultation and let us use our expertise to help you stay 3 steps ahead of your business risk.