How to Prepare for Business Interruptions

For those severe business interruptions, it’s important to have a business continuity plan in place to ensure your business is protected and prepared for the unexpected.

Understanding Business Continuity Plans

A business continuity plan will help you get through the unexpected curveballs life throws at your small business. Sit down and take a moment to think through scenarios that could severely impact your business. As examples, if your business is in Florida, you’re going to want to have a hurricane prep plan in place, while small business owners in New York would want to focus on snowstorm prep. While even the best-laid plans can go astray, having one mapped out before an emergency hits can help reduce some of the panic and mayhem when things do take a turn.

What To Include in a Business Continuity Plan

Creating a business continuity plan can be overwhelming as there are many things to consider and plan for. Below are the things you’ll want to think about and include in your plan:

• Evaluate risks. Using the example above, if your small business is in New York, you’ll want to think through everything that could affect your business if a bad snowstorm hits. Snowy and icy conditions can make it challenging for you, employees, and customers to get to your business. In severe cases, power can be knocked out for some time which would impact any technology needed for your business. While thinking through these scenarios, spend some time reviewing any business insurance you have and understand how your policy may cover the costs you incur.
• Develop internal and external communication plans. When emergencies happen, it’s crucial to have a clear and organized communication plan in place for your employees and your customers. In the example of COVID-19, many businesses needed to deploy communications to employees about how they were preparing the business to stay safe and implementing work from home policies. At the same time, customers need to be notified about any changes in business operations, including hours available, important contact information for your business or customer service team, and other important updates. When drafting communications, especially in the event of widespread panic, it’s vital for messages to be clear and calm and thoroughly explain everything going on. Have plans in place for sending messages via email and social media posts and ensure that updates are communicated quickly.
• Protect important documents. If you know there is a chance of a business interruption, such as a storm, you’ll want to spend some time backing up any important documents and ensuring physical copies are located in a safe space. You should also spend time backing up any technology you use to prevent hiccups when you need it. If you’re going to run payroll during the projected interruption, make sure you have everything you need ready, so you can still pay your employees on time. If you use an online payroll provider, this is something they can help with.
• Employee action plan. An employee action plan has two components; one is the actions your employees should do during an emergency, and one is the actions you will be providing for them. During an emergency, it’s all hands on deck and having an outline with tasks and roles and responsibilities for each employee will be necessary. Choose an employee or two to handle external communications to ensure that customers are being updated. Other jobs could include preparing your business, whether it’s gathering supplies in the event your team can’t leave, or gathering supplies like salt and shovels so your business can focus on safety.  
• Cash flow. Depending on the type of business interruption your small business faces, there may come a time where your business is forced to close or change how you conduct business. In the example of COVID-19, many restaurants had to close their dining rooms and could only offer take-out or delivery to customers. While it was still a way to bring in money, it impacted the amount a restaurant could typically bring in. It’s important to look at your finances and understand if you would have enough cash to get you through any type of business setback. Additionally, you’ll want to be aware of the expenses you must pay in the event of a cash flow problem, like payroll, insurance, and rent. Knowing what will be impacted by an emergency can help you prepare an emergency fund to ensure you can keep your doors open as long as possible in the event of a business interruption.

Bottom Line

Preparing for the unexpected can be scary and overwhelming because the unknown holds so many possibilities. While you may not think of everything in your business continuity plan, incorporating the subjects above can get you in the right place. As things are happening, you can always check in with resources like the Small Business Administration to see if they have any information on funding if you do find yourself in a pinch. The best thing to do in the event of any emergency is to stay calm the best you can and be prepared to pivot your plan.