Why Having a Business Continuity Plan is Essential

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CityDisaster strikes when you least expect it. A strong earthquake, an overwhelming fire that sweeps the entire city, long term power crises, or violent storms with winds that can uproot trees – even if these events are rare, their consequences are devastating. When they happen, what will your business do?

Without a good continuity plan, there’s no telling how long it will be before operations return to normal. In some cases, this can lead to immense losses or even bankruptcy. According to NetStrategy, there is no substitute for being able to continue working in the event of a disaster.

But despite this, many organisations do not have a formal plan, and simply trust their employees to figure out what to do on their own. This careless approach will only lead to confusion and unnecessary losses. There are many reasons for having a rock solid plan, but these are the most prominent.

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1. Avoid or minimise peripheral costs – When asked what their company’s continuity plan is, some owners will dismissively say that they already have insurance. But although insurance is a vital piece of the puzzle, it is far from enough on its own. You need to take into account the fringe costs that a disaster might have as well. These include:

• Customers that go elsewhere due to production delays
• Development setbacks or outright abandonment of new products
• Relinquished market share to competitors

Insurance policies do not cover these, but they are just as devastating to your business as any lost equipment or facility. A continuity plan can help avoid these secondary damages and help you preserve your company’s position in the wake of a disaster.

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2. Restore core operations quicker – Every department and process of your business is essential, but some are more time sensitive than others. If you do not get them back to a working condition quickly, the costs to your organisation will be significant.
Part of a good continuity plan is conducting a business impact analysis to identify these key operations, and then determining the steps necessary to restore them in as little time as possible.

3.Protect the company image – There are few things that can harm a business’ reputation more than an inefficient response to an emergency. It will shake the confidence that employees, customers, and suppliers have in you; if your operations were this fragile and unreliable, who is to say that the same thing won’t happen again someday?

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The financial viability of your organisation hinges on how well you can respond to a major emergency. Many have gone out of business because of a lack of planning and preparation.