Business continuity steps to help protect your company
Having a plan established may mean staying in business after a disaster. Use this checklist to help you safeguard your company.
Disasters are often unexpected — and costly. A study conducted by the Federal Reserve found 61% of small businesses in disaster-affected areas lost up to $25,000 in revenue, and 35% lost even more.
However, advanced preparation can help minimize the damaging aftermath. By taking proactive continuity steps, you might help save your business from experiencing similar losses. Review this checklist as you develop a plan to better protect your company:
1. Know your risks
Depending on the location, certain natural disasters may be more likely to strike. For example, businesses in a coastal region may face increased risk of hurricane damage, while a Midwestern company might prepare for tornadoes.
Once you have knowledge around which disasters are most common in your area, assess how likely they are to occur and how severe the damage might be. The Insurance Institute for Business & Home Safety offers a simple worksheet to help with this process.
2. Develop an emergency action plan
Creating a thorough action plan before disaster strikes may help reduce concerns and get operations back on track after an incident occurs. The plan should include items such as:
- Evacuation procedures: Create a safe exit strategy, taking into account your specific worksite layout, structural features, and emergency systems.
- Employee notification process: Maintain a list of all employees with up-to-date emergency contact information.
- Media relations plan: Be clear with staff about how they should respond if media approach them for comment.
- Supporting team members during and following an incident: Supporting staff before, during, and after an incident
3. Share, test, revise, and maintain
Sharing the emergency action plan with employees is a good first step. Then, test your plan to make sure it works. Encourage staff at all levels to make suggestions on how to improve the plan.
Incorporate changes based on feedback, and walk through the plan again. Regularly review your company’s emergency action plan with employees and make updates as necessary. Be sure to recirculate the plan with employees each time you change it. Ensure every team member understands the procedures clearly. Ensure that the plan is revised at least once a year or when a change in business occurs.
4. Create a business recovery plan
A recovery plan can help transform what would’ve been devastating aftermath into a minor interruption, allowing regular operations to resume as soon as possible. This plan should include items such as:
- A secondary site or alternative work locations for staff
- Key customer, supplier, vendor information and technology dependencies
- Critical business functions and process inventory (e.g., staff who performs them and necessary materials)
- Financial plan (e.g., documentation of bank accounts, lines of credit, and payroll services)
5. Keep business inventory and backup data
Take note of any items vital to business operations and record the information. For example, take photos of equipment and document descriptions and serial numbers. Also include an inventory of any software the company uses and a list of employees who can access the programs.
Update this information whenever the company acquires new technology and be sure to enforce a policy for employees to regularly back up important data. Save this information along with proof of purchase in a safe, off-site location.
6. Review your business insurance
As your business grows, your insurance needs may evolve. For example, if your business has become heavily reliant on technology and a power outage occurs, a standard policy may not cover the loss that a company faces. Consult with your business insurance agent annually to avoid gaps in your coverage.