Learn how a business continuity plan can help keep your business operations running during an unexpected event or disaster.
When operating and building a business, experienced business owners expect the unexpected. Disruptions to your business operations could bring significant losses or financial damage to your company. However, entrepreneurs and business owners who develop a business continuity plan (BCP) can be one step ahead when problems arise.
Learn about BCPs, including what they are, why you might need them and how they work, in our overview.
All companies can experience business disruption. Sometimes disaster strikes without warning and harms business operations more than expected. Being prepared for these disruptions can help you hedge against unfortunate situations and mitigate risks.
A business continuity plan (BCP) is a set of actions and processes—generally outlined in a document—that helps ensure stability in the face of operational interruptions. This document helps proactively solidify processes and procedures to keep operations running in the event of an unexpected disruption.
Companies should write business continuity plans to encompass a wide variety of unexpected occurrences. These may include:
Business continuity plans can look fairly different from company to company. However, at a high level, business continuity plans should encompass clear policies, recovery strategies and contingency plans for restoring critical business functions and quickly returning to normal business processes.
Key steps to creating your plan:
1. Assess and identify vulnerabilities. Work across your teams to create a business impact analysis. This analysis should include disruptions that could be disastrous and the impact they could have to finances and operations. Consider covering:
2. Create and prepare your plan. Businesses will need to focus on their steps to recovery, response, communications and the roles and responsibilities of team members who will implement plans. BCPs should include:
3. Test and train. After creating your plan, train continuity teams and test it out. Even a well-crafted plan can fall short if employees haven't practiced implementing it. You should:
4. Update your plan. These plans can and should be “living and breathing” documents that are consistently reviewed and updated as needed. Ensure there is a plan to regularly evaluate, test and re-evaluate plans.
The actual contents of a business’s continuity plan will vary depending on the business. Businesses often perform a risk assessment and business impact analysis to identify the largest and most likely potential risks to their operations, and develop the best path to business recovery.
Business continuity planning is often part of the same conversation as disaster recovery. The two concepts work hand-in-hand. Though sometimes used interchangeably, the terms are not exactly the same and knowing the differences is important.
Here are some key differences between the plans:
Business continuity plans are an important part of a company’s overall risk-management strategy. They provide a foundation for a business’s approach to disaster preparedness and emergency management in all contexts. A BCP is one step towards building your business resiliency when uncertainty is in the future.
Without a sound business continuity plan—and associated documentation, such as a disaster response plan—a company may find itself scrambling to regain stability in the aftermath of an unexpected event. Business continuity plans exist to provide a path back to stability and generally help in the mitigation of both short-term and long-term risks.
As comprehensive proactive protection, other documentation in the risk-management realm, like succession plans, should complement business continuity plans. The more angles from which businesses can shore up their operations in the event of an emergency or disaster, the more effectively they can mitigate risk. In fact, doing so can help protect your business’s profitability during a catastrophe.
Developing a business continuity plan can help ensure your business is ready for anything and can support financial success. Working with a dedicated banking team at J.P. Morgan Commercial Banking can help make managing uncertain times easier.
JPMorgan Chase Bank, N.A. Member FDIC. Visit jpmorgan.com/cb-disclaimer for disclosures and disclaimers related to this content.
