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A business owner getting advice from an SBDC business adviser

How to manage risks in your business

What would you do if your business was flooded, or ravaged by fire destroying equipment, vehicles, computers and furniture? Would you be able to continue working while your office, factory or farm was repaired or restored? What if you were injured in an accident? Could your staff continue without you?

Disasters can cause expensive disruption to a small business, so the quicker you can get back to work, the less expensive and disruptive it will be. Being prepared with a business continuity plan can give you peace of mind if the worst should happen and your business is faced with a disruption of any kind, large or small.

A business continuity plan can be as simple as a comprehensive insurance policy, a list of emergency numbers and important documents stored in a safe place.

Alternatively, it can be very comprehensive ensuring full back-up of all documentation stored off-site, communications and marketing plans, and alternative production and supply options sourced and ready to go at minimal notice.

To help small business owners avoid or limit damage from a disaster, we have created the following Business Continuity Planning Checklist as a guide to developing plans specific to small and medium-sized businesses, and it’s suitable for any type of business.

Here are some things to think about:

   
Identify risks Identify the possible risks to your business – fire at your premises, the closure of a major supplier or the illness or death of a key staff member.
Check your insurance Are you adequately covered in the event of a disaster? Keep a copy of your current policy in a safe off-site location, as well as in a handy position on-site.
Critical activities Which activities are critical to the success of your business and how will they be maintained in short and long-term situations?
Location Identify another workplace that could be used while the damage to your business premises is repaired.
Cash flow and cash reserves Identify ways to access cash reserves (keep in mind that facilities may be limited in a crisis). How will a downturn in your business affect your cash flow, long-term or short-term?
Distribution and transport Identify alternative transport/distribution routes and make arrangements with suppliers, couriers or freight handlers.
IT Consider how to strengthen your IT infrastructure to minimise loss of data and maintain contact with customers. Always back-up your business databases and other commercial information.
Marketing Develop strategies for advising and maintaining contact with customers in the event of a disaster and for winning them back afterwards.
Succession planning Have processes and procedures documented to ensure others can easily cover for injured or ill employees. Identify who will take over in the event of a loss of managerial personnel.
Accessibility Make copies of the business continuity plan, keep it updated and locate copies on-site and off-site. Inform staff of the location of the plans, and ensure they are familiar with the details.

It’s a fact of life that things can and will go wrong. Being prepared for all contingencies is the basis of good business planning.

For more information

See our information on risk management or contact our free business advisory service to help you identify the risks in your business and prepare a risk management plan for dealing with unexpected events.

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