Business continuity plans good idea for business owners
May 23, 2012 at 12:23 a.m.
This hurricane season business owners are urged to have a plan in place to not only resume business operations quickly after a disruptive event, but to also keep making money.
A business continuity plan, BCP, as it is called in business circles, is a comprehensive approach business owners can take to ensure their business can survive a natural calamity.
"We all pay insurance every month and hope we don't have to use it," said Kacey Lindemann, senior business advisor for the University of Houston-Victoria Small Business Development Center. "It's the same thing with a business continuity plan. You plan and hope you don't have to use it."
Although a BCP is like insurance, it does not replace it, Lindemann warned.
While the details can vary greatly depending on the size and type of business, all continuity plans should encompass details on how employees will communicate, where they will go and how they will keep doing their jobs, according to the International Data Group's website.
"For some businesses, issues such as supply chain logistics are most crucial and are the focus on the plan," according to the data group's website. "For others, information technology may play a more pivotal role, and the Business Continuity and Disaster Recovery Plan may have more of a focus on systems recovery."
Texas business owners should be particularly serious about creating a BCP, as Texas has more natural disasters than any other U.S. state, said Lindemann.
Eighty percent of businesses may never reopen if they do not resume operations within the first month after a major disaster occurs, Lindemann said.
The following steps are usually taken to create an effective BCP: Do a business impact analysis, identify preventative controls, develop recovery strategies, test the BCP and maintain the plan.
Other steps can include creating a plan to partner with compatible businesses, cross-training employees and keeping important financial documents somewhere other than at the place of business.
Three years of recent tax returns and balance sheets are just some of the requirements business owners need if they hope to apply for assistance from FEMA in the aftermath of a disaster, Lindemann said. He suggests owners copy these forms on a USB drive or set up an account with other businesses that specialize in backing up data.
"A good plan today is better than a perfect plan tomorrow," said Lindemann.