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Why You Should Have a Business Continuity Plan

by FrankCrum on June 7, 2023

Disruptions can happen to any business, whether it’s a natural disaster, cyber-attack, or unexpected event. Such disruptions can have severe consequences, including lost revenue, operational disruption, reputational damage, and even bankruptcy. That is why it is essential for businesses to have a business continuity plan (BCP) in place. A BCP is a strategic plan that outlines how an organization will continue to operate during and after a disruptive event.

In this article, we will explore why businesses should have a BCP, what it should include, and how it can benefit businesses in the long run. We will also examine the consequences of not having a BCP and the potential risks businesses may face if they do not plan for the unexpected.

What Is Business Continuity?

Business continuity refers to an organization's ability to continue its operations or quickly resume them after an unexpected event or disruption. This could be caused by a range of factors, such as natural disasters, cyber-attacks, power outages, or a pandemic.

Business continuity planning aims to ensure that an organization can maintain essential functions and services during and after a disruptive event with minimal impact on its operations, reputation, and financial stability. This involves identifying critical business processes, assessing potential risks and vulnerabilities, developing mitigation strategies, and implementing plans to respond to and recover from disruptions.

Business continuity plans typically include measures such as emergency response procedures, backup systems, alternative work arrangements, communication plans, and regular testing and updating to ensure their effectiveness. By having a well-designed BCP in place, organizations can increase their resilience and readiness to face the unexpected and minimize its impact on operations and stakeholders.

What Does a Business Continuity Plan Entail?

A business continuity plan is a document that outlines the procedures an organization will use in the event of a disruptive incident to resume its critical functions. The BCP aims to minimize the event’s impact on the organization's operations, finances, reputation, employees, and stakeholders.

A typical business continuity plan includes several components, such as:

1. Risk Assessment: Identify potential risks that may disrupt the organization's operations.

2. Business Impact Analysis: Analyze the potential impact of identified risks on the organization's critical functions and services.

3. Business Continuity Strategy: Develop strategies to mitigate the risks identified and ensure the continuation of critical functions and services.

4. Emergency Response Procedures: Document processes to be followed in the event of an emergency or disaster.

5. Crisis Communication Plan: Create communication plans to inform employees, customers, suppliers, and other stakeholders about the organization's status during and after the event.

6. Backup and Recovery Plans: Determine procedures to back up and recover the organization's data and systems in case of data loss or system failure.

7. Testing and Updating Procedures: Plan to test and update the BCP to ensure its effectiveness and relevance.

While on the surface, a business continuity plan may seem like a disaster recovery plan (DRP), the two plans differ in scope, focus, and objectives. A BCP is a proactive plan that focuses on maintaining business operations and services, while a DRP is a reactive plan that focuses on recovering IT systems and infrastructure.

What Kinds of Businesses Need a Continuity Plan?

Every business, regardless of size or industry, can benefit from having a business continuity plan. Any organization can face unforeseen disturbances that could negatively impact its operations, finances, and reputation. However, some industries are particularly vulnerable to certain risks of disruption and are therefore strongly encouraged to use a BCP.

  • Construction: The construction industry is vulnerable to disruptions that can impact their projects, such as natural disasters, supply chain issues, accidents, and labor shortages. A BCP can help mitigate the impact of these acute challenges.
  • Information Technology: Businesses in the IT industry, such as software development firms, cloud service providers, and data centers, are completely dependent on their IT systems and data. A BCP is necessary to ensure the availability, integrity, and security of systems and data in the event of a cyber-attack, power outage, or hardware failure.
  • Healthcare: Hospitals, clinics, and other healthcare providers are critical for public health and safety. A BCP is crucial to ensure they can continue providing essential services during and after a natural disaster, pandemic, or other public health emergency.
  • Finance: Banks, insurance companies, and other financial institutions are highly regulated and must meet strict regulatory requirements for business continuity. A BCP is necessary to ensure that they can continue to provide financial services to their customers during and after a disruptive event.
  • Manufacturing: Manufacturing businesses rely on complex supply chains and production processes. A BCP is necessary to ensure businesses can maintain their operations and supply chains during and after a natural disaster, fire, or other disruption.
  • Retail: Retail businesses depend on a steady supply of inventory and customers. A BCP is necessary to ensure that they can continue to provide goods and services to their customers during and after a disruption, such as a power outage or severe weather.

Benefits of a Business Continuity Plan

A business continuity plan can provide several benefits to organizations, including:

Minimizing Downtime: A BCP can help an organization minimize the impact of a disruptive event on its critical functions and services. By having a well-designed BCP in place, an organization can ensure that it can continue to provide essential services to its customers, minimize downtime, and avoid revenue losses.

Ensuring Readiness: A BCP helps an organization prepare for potential risks and disruptions and respond to them effectively. This includes identifying potential risks, developing response strategies, and regularly testing and updating the plan to ensure it remains effective.

Enhancing Resilience: A BCP can help an organization build resilience by identifying and mitigating risks before they occur. The BCP ensures that the organization is well-prepared to respond to disruption and can quickly recover its critical functions and services.

Protecting Reputation: A BCP can help an organization protect its reputation by demonstrating its preparedness and responsiveness to potential customers, investors, and other stakeholders. A well-designed and tested BCP can enhance an organization's credibility and trustworthiness.

Meeting Regulatory Requirements: Many industries and businesses are required by law to have a BCP. A BCP ensures that the organization meets regulatory requirements and avoids potential fines or legal liabilities.

Reducing Costs: A BCP can help an organization reduce costs by avoiding revenue losses. The plan can also help reduce recovery costs by ensuring the organization is well-prepared to respond to disruption and can recover its critical functions and services quickly.

What Could Go Wrong If You Don’t Have a Business Continuity Plan?

Businesses that do not have a business continuity plan can be vulnerable to a wide range of risks that can significantly impact their operations and stakeholders. Here are some examples of what could go wrong for businesses that do not have a BCP:

  • Downtime: Disruptive events such as natural disasters, cyber-attacks, or power outages can cause prolonged downtime for a business. Without a BCP, a business may struggle to recover its critical functions and services, leading to significant revenue losses.
  • Operational Disruption: Emergency events can also cause operational disruptions, such as supply chain issues, staff absenteeism, or IT failures. Without a BCP, businesses may find it challenging to respond to these disruptions effectively, leading to delays, customer dissatisfaction, and revenue losses.
  • Financial Losses: Disruptive events can cause significant financial losses, including lost revenue, increased costs, and reputational damage. Without a BCP, businesses may struggle to recover from these losses, leading to financial instability and potentially even bankruptcy.
  • Legal Liabilities: Businesses may face legal liabilities if they are unable to meet their contractual obligations due to a disruptive event. Without a BCP, businesses may struggle to defend themselves against legal claims and may face penalties or fines.
  • Reputational Damage: Disruptive events can cause reputational damage, especially if businesses are seen as unprepared or ineffective in their response. Without a BCP, businesses may struggle to restore their reputation and may lose the trust of their customers, investors, and other stakeholders.

In conclusion, a business continuity plan is crucial for any business, regardless of size or industry. A BCP can help businesses prepare for unexpected events, reduce the negative impact, and maintain business continuity. It can also help businesses protect their employees, customers, and stakeholders and ensure long-term sustainability.

By taking the time to develop a well-designed BCP, businesses can gain a competitive advantage, build resilience, and enhance their reputation. So, don't wait until a disruptive event occurs to start planning – start creating your BCP today and safeguard the future of your business.

At FrankCrum, our mission is to help businesses become the best they can be. To learn more about our comprehensive services, contact us today


FrankCrum is a professional employer organization (PEO), founded in 1981 dedicated to helping business owners boost HR capabilities and broaden convenient services and benefits to employees. The origin of FrankCrum dates back to 1981, when Frank W. Crum, Jr. and his father, Frank Crum, Sr., founded the Great American Temporary Service. With a passion for helping small business owners succeed, the company has evolved and grown over several decades.