Business Continuity is a highly relevant concept for any business. For an SMB/SME, it is even more critical as the SMB/SME typically has less duplication and redundancy than a Fortune 500 enterprise. Business Continuity is sometimes equated with Risk Management, which is a big part of Business Continuity, though Business Continuity is more than just Risk Management.
What is Business Continuity?
Business Continuity entails broadly the following:
- Internal Risks and Obstacles
- Internal Opportunity Management
- External Opportunity Management
- External Risks Management
Internal Risks and Obstacles:
For an SMB/SMB, the critical part of internal risks is to eliminate business loss due to single point failures. Following are examples of such risks although the list can be made much longer:
Business Standstill due to:
- Key personnel not showing up, one day or for more extended periods or not at all.
- Fire, electrical malfunction, Internet equipment failing, essential computers failing, HVAC environment control equipment failing, sanitary facilities failing, plant Structure failing.
- Lack of compliance with crucial oversight authorities such as EPA, OSHA, and other state and federal entities
Severe Business Impact due to:
- Fraud
- Gun violations
- Work crew action as to work stoppage
- Moving the business to a new location
- Cost of Capital changes
There are numerous remedies to manage each of these and other single point risks, some examples:
- Computers, have one standby laptop or desktop that can continue the work while the primary one is being repaired or replaced.
- Data management, have backups stored offsite in case of fire or theft. Encrypt sensitive data.
- Fire and such risks, don’t just go through the motions of complying with inspectors to avoid fines, use those inspections to activate continuous improvement to eliminate any business loss.
- Cross train personnel, have a “brick plan” in case of significant changes to an employee’s status.
- Use external resource to make significant moves while your team continues the business to the degree that is possible.
Internal Opportunity Management:
A key value in a culture of continuous improvement is also the addition to the notion of:
This means that if you don’t keep improving your competitiveness every day, you eventually will be outcompeted by a company that does.
Business Continuity assurance uses tools such as continuous improvement and workforce engagement in the process and workflow efficiency to reduce the risk for many of the single failure risks mentioned above. That said there will be times when changes will have to be made, e.g. in personnel or critical equipment and the aspect of business continuity is here the key to avoiding business loss.
As much at it is tempting to walk an in-subordinate employee out the door, the impact short term to business and medium term to other employees can be significant. Such changes need to be planned end executed efficiently for best business continuity practices.
External Opportunities Management:
Many times overlooked risk for business continuity is the lack of insight as to what business the company is in and how to survive industry changes in markets and business opportunities, one example of this is the recent cancellation of plastic drinking straws. Here a business that is focused on this product needs to find a substitute product that can be marketed to the same market segment it currently has.
External Risk Management:
As much as a business can control its own business, there are external factors that are outside of the SMB/SME owners risk management abilities to avoid the actual event. This is where business continuity comes into place in external risk management.
Such are:
- Major flooding and Forest Fires
- Earthquakes
- Tornados and Hurricanes
- Major Electrical Outages
- Energy supply shortages
- Trade Wars
There are remedies for many of these as well that can be executed with manageable investments; one example of business continuity for external risks is to have an evacuation plan for essential equipment and documentation/information assets in the case of a significant flooding or area evacuation. All of these types of management fall into business continuity and should be taken into account in any small business.
At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:
