Why Small Businesses Should Consider Business Continuity Planning
Resilience, or a lack thereof, has been a defining theme of the past year.
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Amid economic strife and a public health crisis, businesses naturally divided along two lines: the prepared and the unprepared. Even then, most did not escape without bruises.
This division also seemed to fall along another line: the size of the business. While most organizations were impacted by the pandemic, small businesses were unquestionably hit the hardest. In a PNAS survey conducted in 2020, 43% of the small business respondents had temporarily closed, mostly due to Covid-19.
In part, this skewed struggle maps back to cash flow and resources. The PNAS survey showed that most respondents only had enough cash to last two months or less. On the flip side of the coin, enterprises have the advantage of typically having deeper pockets. According to a Small Business Administration report that analyzed the 2008 recession, larger companies recovered to their pre-crisis contribution to GDP in an average of four years, while smaller ones took an average of six.
Resilience is not solely dictated by cash flow, however. Large enterprises have another advantage — business continuity planning and disaster recovery. These practices are table stakes for big companies, yet are often seen as too corporate or excessive for smaller ones. Why are processes around resilience beholden to size? Don't we live in the world of scalability? Small businesses can — and deserve — to also think big without overextending their resources.
Why business continuity can't be exclusive to the enterprise
Business continuity planning helps make operations as resilient as possible. Here are two important definitions to know:
- Business continuity planning is the process of identifying potential threats to a company and creating protocols to deal with them so that business can keep moving forward.
- Disaster recovery is a set of tools and procedures that restore a business's vital information, processes and systems following a disaster.
Sure, that protocol and those tools may look different for an enterprise (ex. an entire team and tech stack dedicated to the issue), but that doesn't mean businesses can't adopt the same best practices on a smaller scale. With the right plan, they can reap the same benefits as larger companies.
Here are just a few of the benefits:
- Limit interruptions. There is no need to handle each crisis as an independent event. With a business continuity plan, small businesses can standardize their disruption response to minimize downtime. The less downtime, the less money lost.
- Lay out alternatives. There should always be a Plan B if a small business has to close its doors, reduce its hours or limit its capacity. For instance, if a salon is closed for a month due to Covid-19, it should have a way to use telecommunication, stay in touch with its clientele and allow customers to continue booking future appointments. That way, revenue is ready for a quick restart once the business reopens.
- Empower employees. Business continuity planning ensures every employee is on the same page for how to handle a crisis. With a set protocol, employees know how to carry on with their jobs, ensuring consistency and giving them peace of mind.
The first step in business continuity planning is to identify internal challenges. For instance, is your current infrastructure helping or hindering your resilience? While there are several factors that can contribute to a crisis — like economic volatility, staff safety and/or government advisories — a business's processes shouldn't be one of them.
That said, many organizations continue to rely on outdated tools and systems that compound crises. For instance, some businesses were not able to easily transfer to a remote, socially-distanced world. To lay a foundation for business continuity, businesses must prioritize digitizing their processes and systems.
Digitize before the next disaster
During early pandemic-related shutdowns, many small businesses discovered that their pen-and-paper systems made it difficult to respond quickly to necessary changes. Analog-only business management presents several problems. Information that lives in only one location can only be accessed physically from that location — if it's lost or destroyed, it's gone forever. It's also difficult to gain insights from that data regarding reporting, payroll, and the customer database.
By modernizing paper-only methods with digital solutions, businesses can eliminate internal bottlenecks and gain access to important information anytime, anywhere. Customers can schedule appointments and communicate even when doors are closed, and employees benefit by being able to do things like view their schedules and stay up to date.
Digitization doesn't need to be an enterprise-grade investment, either. By implementing all-in-one solutions such as business management software, small businesses can digitize their operations with ease. The right software can make business continuity planning simple and affordable, and the best time to start planning is now.
Small businesses need to be ready for the next disruption, whether it's a natural disaster, a burglary or a data breach. By modernizing and digitizing operations, small businesses can take advantage of the digital revolution without breaking the bank.