Business contingency: How to plan for the unexpected
Read time: 3 mins Date added: 21/11/2023
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Read time: 3 mins Date added: 21/11/2023
Business contingency planning probably isn’t at the forefront of your mind when running your company day-to-day. However, there’s no shortage of risks that could disrupt business as usual. For example:
The COVID-19 pandemic and its impact on businesses of all sizes showed how vital it is to be prepared for anything. Smaller, more localised events such as those listed above can still cause huge problems if you’re taken by surprise.
A detailed business contingency plan will provide you with a clear structure and roadmap for what to do in a crisis. So, what are the benefits?
When employees, customers and suppliers rely on you, effective continuity planning can also help minimise reputational damage and give you a competitive advantage over those who haven’t put anything in place.
It’s impossible to prepare in detail for every eventuality. Bloomberg UK reported the coronavirus pandemic caused a 14% rise in UK business closures compared to the previous year.
The risks mentioned above are some of the most common, so it makes sense to plan for as many of these as you can
You might feel you’ve got enough to do already without spending time drafting business continuity plans for things that may never happen. It’s easy to put off what might seem like non-essential tasks until another day.
Here are three tips for getting started:
Once you’ve got a list of relevant risks using the table above as a guide, the next step is to assess each risk individually.
Create a matrix outlining the risks, scoring them on:
The next step is categorising your key facilities and processes and prioritising recovery plans for business-critical operations.
Decide who and what will be affected and how
This involves listing all the people and organisations you’ll need to contact if a serious incident happens in your business. This should be as detailed as possible with the names and contact details of staff, customers and the following suppliers:
It’s worth having a secure copy of this list saved in the cloud so it can be accessed when getting to your premises isn’t possible.
Once your contingency plan is ready, testing and reviewing it at least annually is crucial. As your business grows and changes, there may be other risks you need to prepare for.
Businesses of all sizes can be vulnerable to cyber-attacks and IT outages. Cyber insurer Coalition recently claimed that smaller firms have become bigger targets for cyber attacks.
Specific threats include ransomware with demands for payment and customer information stolen through hacking.
Having a small section in your business contingency plan for your IT systems is not enough - you need a separate continuity plan. For example, are you able to securely back up and run your systems off-site, if necessary? Other steps you can take include:
Learn how to stay one step ahead of cyber risk on our dedicated hub.
Are your IT systems insured?
Cyber Insurance can provide cover if your IT systems are subject to a data breach or cyber attack. Your policy could reimburse you for:
Learn more about our business insurance cover.
Your continuity plan should cover several crucial stages:
For each stage, focus on what you will need to do across the following areas:
It may be more important for some areas of your business to resume quicker than others. It’s wise to think about the order of this and who will be responsible for each function. Different parts of your business may need separate recovery plans.
Compile a communications strategy
Depending on the profile of your business and the issues affecting it, you may find yourself dealing with the press. You should nominate a spokesperson in case the incident is newsworthy. Reinforcing confidence in your recovery is essential to managing major incidents.
Your contingency plan should be fully documented and agreed upon so everyone can return to normal as soon as possible. It should align with your business strategy and objectives and be credible.
In the aftermath of any business continuity incident, there are some vital steps to take:
It’s not a foregone conclusion that your business will be affected by any of these risks. However, it’s prudent to test and review your contingency plans regardless.