You always need a backup plan. That’s what a business continuity plan is.

A business continuity plan can help your company endure and survive an unexpected crisis or event that temporarily closes your business. Plus, it demonstrates to your employees, business partners, suppliers, and customers that you’re a thoughtful, strategic business owner who doesn’t take unnecessary risks.

Likewise, a comprehensive business insurance policy inspires trust and confidence in your company and is vital for recovering from accidents and emergencies.

Let’s go over what a business continuity plan is and how you can develop one:

Small business continuity plan

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What Is a Business Continuity Plan?

A business continuity plan is a strategic document containing critical information any organization needs to continue operating in the face of unexpected disruptions or disasters, such as a cyber-attack that takes a company’s website offline or a fire that damages a commercial property and the business cannot open.

The primary goal of a business continuity plan is to minimize downtime, protect assets, and maintain essential services during unforeseen events that could otherwise interrupt a business’s normal operations.

What Type of Events Could Force a Business to Close?

While we always hope for the best, it’s wise to be prepared for bad things to happen without warning. Any number of unexpected events could force a business to close and possibly threaten its survival, such as:

  • A fire that damages or destroys a business property, its equipment, and inventory
  • Water damage caused by a leaking roof, a burst water pipe, or a flood
  • A natural disaster, like a wildfire, hurricane, ice or windstorm, tornado, or earthquake
  • A cyber-attack, ransomware attack, data breach or other cyber-related event
  • Damage to or loss of local infrastructure or services, such as electricity, water, or transportation networks
  • A break-and-enter and theft at your property or vandalism of property and equipment
  • Sudden equipment malfunctions or breakdowns
  • Public security-related events, such as active shooter in the community

A KPMG business survey found nearly 60% of Canadian small- and medium-sized businesses were impacted by extreme weather and natural disasters in 2023. Furthermore, 45% said their facilities were damaged, 44% suffered a direct loss of revenue, and 41% had to relocate their operations due to severe weather last year.

With these figures in mind, it’s worthwhile for small business owners to ensure their companies have a business continuity plan and are prepared for any unexpected event.

What Information Does a Business Continuity Plan Include?

The details of what a business continuity plan includes depend on the size of your business, its operations, the industry you’re in if you have employees and the type of equipment and inventory you have. However, after conducting a thorough risk assessment of your organization and its single points of failure, most business continuity plans include the following: 

  • Key stakeholder contacts and initial response actions
  • The scope and objectives of the plan
  • Roles and responsibilities of employees and their contact information
  • Step-by-step emergency response and management procedures
  • Local emergency contacts (police, ambulance, fire department)
  • Vital functions and processes that must be maintained (both technology-related functions and not)
  • Contact information for business partners, service providers, and suppliers
  • An inventory of equipment, business contents, and merchandise
  • Critical business information, like your company’s business insurance policy and broker’s contact
  • An internal and external communication plan to use during a crisis
  • Detailed recovery strategies, including alternative workspace locations, access to data backups, and network infrastructure redundancy to keep data moving during a crisis or failure
  • A schedule for reviewing, testing, and updating the plan

6 Steps to Take to Draft a Business Continuity Plan

Here are six steps to take to draft a plan that works for your small business:

1. Know What Risks You Face

Doing a thorough risk assessment demands getting your employees and partners involved and discussing all possible risks your business faces. Identify everything that could affect your operations, such as cyber-attacks, blackouts or power outages, major storms, computing infrastructure failures or unexpected downtime. Think of any possible risks that could disrupt your regular activities.

2. Do an Impact Assessment

Understand how your plan addresses lost income during an outage or downtime, regulatory fines, contractual penalties with partners or customers, and increased expenses like overtime labour-related costs. 

3. Identify Your Critical Systems

Identify and determine how your company will maintain its critical or essential systems and services during an emergency. Rate the impact of each one if unavailable and prioritize and itemize an order of recovery. In other words, know what systems or services must be re-established immediately, which ones should only be suspended for short periods, and which ones could be suspended for a more extended period if necessary.

4. Automate Mission-Critical Data Backups

You can manually backup your company’s mission-critical data, encrypt it, make copies and store at off-site secure locations (this should be done regularly), but automating backups is a better way to go. That way, regular backups are never overlooked. Keeping up to three copies of your data is recommended: one in the cloud, one in immutable storage, and another in a secured location off-site.

5. Assign Roles to Employees

Assign specific roles to employees to carry out during a disruption as per their unique skills and experiences. For example, if your business has heavy equipment and machinery, only assign employees who are licensed to operate that equipment to be responsible for them.

6. Regularly Test the Plan

Test and review the plan with your employees regularly. Treat it like a fire drill in that everyone has assigned tasks and knows what to do as planned. Identify gaps in the plan, update it, and keep track of tests and updates made to it.

What Is the Difference Between a Business Continuity Plan and a Disaster Recovery Plan?

While business continuity and disaster recovery plans are related concepts that often work together to help an organization endure and recover from unexpected events, they are each unique strategic documents.

In general, a business continuity plan is broad in scope and is designed to ensure a company continues to function when there is an interruption to regular operations. It encompasses maintaining an organization’s technology and infrastructure, physical property and equipment, provides instructions for employees and communications protocols for a company’s critical operations during a disruption.

On the other hand, a disaster recovery plan is laser-focused on the recovery of technology systems and data following a disruptive event or disaster to restore and resume technology operations with as little downtime as possible.

How Insurance Can Help Your Small Business Survive an Accident or Disaster

When unexpected events, accidents, or tragedies unfold that affect your company and its ability to survive, that’s when the value of having a customized business insurance policy becomes clear and makes all the difference.

Regardless of what your business does or how small it is, don’t take unnecessary risks with your finances and livelihood. 

Fill out our online application and get a free quote for your insurance needs. We’ll shop our partner network of more than 50 insurers to get the low-cost policy you need, and our friendly brokers can customize it to ensure you’ve got the coverage you require to recover from unexpected events and accidents.

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About the Author: Brandon Bowie

Brandon Bowie is a Team Lead, Professional Lines at Zensurance.