Business Interruption

John Walters of 1-2-1 Business Consulting makes us stop and think about what would happen if our businesses, well, stopped. John outlines some excellent challenges to think through in advance and provides guidance to implement a plan BEFORE it is needed.

Have you ever stopped to think about how you would be able to operate your business in the event of an unscheduled break in critical services and or resources, and how you would be financially impacted by such an outage? The outage could be a few hours, days, weeks or months and could be related to a loss of power, machine failure, employee absence, and the list goes on and on.

For sure most businesses rely heavily on utilities, whether it be for direct production and or heating or lighting. Do you have an interruptible power supply? Have you a back up generator, and, if so, when did you last test it to ensure that it is in good working order?
Utilities, is a fairly obvious cause of business interruption, but there are a number of other areas that may be less obvious.

How about a computer hardware failure? With the advent of technology, most businesses use computers to schedule and to invoice. How long could you operate your business without computers?

What about the loss of data? Larger businesses have disaster recovery plans, and often business interruption insurance, but even they tend to suffer in the short term. There’s usually a delay to activate the service and several days before “normal” business is resumed.

What about Key employees that are unexpectedly absent from the business? This is of particular concern to the small business.

The point is that there are many potential causes for an outage, and that you are unable to protect yourself without first understanding the risk, the likelihood of the occurrence and completing an thorough evaluation of risk /reward. When you equip yourselves with the facts, you are then able to make an informed decision as to what, if any, steps you will take to mitigate the risk.

In summary, you should use the following guidelines to prepare a business interruption strategy for your business.

1.Make a list of the potential causes of an outage for your business.

2.Identify how long you could operate safely without said resources.

3.Identify the likely occurrence of the interruption to the service (High, Medium Low)

4.Indentify the financial impact of the outage. It may be helpful to think about this as a time range that you will be without resources.

5.List the steps that you could take to mitigate the risk of the outage.

6.Identify the cost of the risk mitigation.

7.Determine what steps, if any, you will take.

With the above information you are in a position to develop your business continuity strategy. Should you require any additional support then please take contact with 121 directly. They have the experience and are there for you.

For more planning steps before disaster (or just run of the mill annoyances) occur, check in with John, and visit OED's Online Community.