The Importance of a Business Continuity Plan

The Importance of a Business Continuity Plan

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There are different names for a business continuity plan; they can also be called recovery strategies. The basic idea of a recovery strategy or continuity plan is to devise a plan for your business so that it can bounce back from some kind of catastrophe. That could be a catastrophe of a physical means such as a fire, flood, or other kind of natural disaster. Alternately, the catastrophe could be economic. If your business is faced with an extraordinary financial burden, it could be difficult to survive. In fact, research has found that 40% of businesses without a continuity plan will fold within one year of a catastrophe. You can avoid this with your business, though.

Hire the Experts

It’s important to hire experts when you need to devise a business recovery strategy. The strategy you devise will be one that is all about how to assess the different risks you might be facing and then plan for them. The first step in any kind of plan is risk assessment. For example, if you live in the UK, you will probably not face many hurricanes. While they are not uncommon in the UK, they should not be of the highest concern. However, you should be concerned about sustained rains and flooding. Therefore, if you have a business that has a physical location in a low-lying area, you need to plan for a flood. You should also plan for different economic catastrophes.

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Economic Catastrophes

In 2008, the world economy saw how quickly a bubble can burst. No matter what economy you were in, you probably took a hit to your bottom line and to your stock portfolio. In addition to that, you likely saw some damage to your investment portfolio that was outside of stocks. If you were in the real estate market or the banking sector, you likely saw something close to a catastrophe. This kind of catastrophe is the exact type of situation for which you design a continuity strategy. After the financial crisis in 2008, the businesses best positioned to recover were the ones that had planned for catastrophes of that nature.

You cannot predict when the next economic crisis will hit; however, you do know that developed economies tend to face a recession every six to eight years. With that in mind, you need to be prepared for a recession at least once per decade. Sometimes there are more recessions in a decade and sometimes there isn’t one at all, but you do need to be prepared for one. Most economic corrections are not as severe as the worst ones, but a plan will help you run your business through that difficult period.

Working with experts on your business plan will ensure that the plan you devise is based on the best available knowledge and experience.

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