Using a Business Continuity Plan
When you are starting your own business it is important to have a business plan set up to help direct the success of your business. What is also important, that many small businesses don’t consider, is a Business Continuity Plan. A Business Continuity Plan s set up for all contingency circumstances revolving around the success of your business. Many problems can occur through the course of running your own business, both natural and man made. If you are operating your own business it will only be a matter of time before your Business Continuity Plan will have to go into effect. It may happen tomorrow or it may happen 20 years from now. Many people believe there is no such thing as luck, only preparedness. When disaster hits you should have a Business Continuity Plan set up to prevent your business from going under.
Probably one of the most famous Business Continuity Plans resulted in the formation of the Bank of America. In 1904 Amadeo Giannini founded the Bank of Italy in San Francisco, California. The goal of the bank was to make small loans to immigrants who were denied by other banks. The Bank of Italy did not possess a fire proof safe and when the San Francisco earthquake occurred in 1906 Giannini was forced to return to the bank and take out all of the money before the fires reached the Bank of Italy. All of the other banking institutions in San Francisco had fire proof safes. Where the fireproof safes prevented the fire from consuming the contents of the safes they were incapable of being opened for days because they needed to cool down. After the earthquake Gianinni was the only person in the city of San Francisco who was capable of making loans to individuals for repairs. Because of his ability to finance the rebuilding of the city, Gianinni’s business thrived and eventually became, what is known today, as the Bank of America.
Where Gianinni’s Business Continuity Plan was not done on purpose this is a great example of how to prepare for disasters and the result of poor planning. The other banking institutions did not think about the result of an overheated safe, and for that reason, they were damaged financially.
When creating a Business Continuity Plan you should contemplate your business exposure to internal and external threats. The first step in creating a Business Continuity Plan should be to assess your business essential aspects and gauge what are the most important and fundamental operations of your business. These should be listed in order of priority and assess what backup, and contingency, arrangements should be made for the failure of each one.
There are many issues that can arise through the course of a business that can cause your business to suffer loss or become insolvent. These include: Theft, natural disasters, looting, damage to inventory and equipment, fire, changes in the financial market and many others.
You should prepare for each situation appropriately; prioritize certain aspects of your business over others; do cost analysis comparing the costs of the business continuity plan versus the value of the asset to the company. For example, the theft of inventory from the store may have less of an impact on your business than the destruction of your business due to fire.
Business continuity plans can consist of backup generators, security systems, backup machinery and equipment and insurance. Each business will have a different business continuity plan and you should consult with a specialist in these matters to assess how you should fully prepare for any worse case scenario.