Unexpected events can have serious consequences on your business. The COVID-19 pandemic is one such example. Other potentially catastrophic events include fires, natural disasters, and extended IT system power outages . . . all of which can have major financial repercussions on your company. Protect yourself with a business continuity plan, and be ready for whatever comes your way!
Big or small, your business needs to be able to count on a plan of action should an unexpected crisis occur. According to a study conducted by the Business Development Bank of Canada (BDC) involving 600 entrepreneurs, 73% of Canadian businesses were already experiencing the negative effects of COVID-19 as early as mid-March 2020. And two months later, the battle continues...
Any crisis has the potential to affect the fluidity of your operations. And misfortunes don’t just happen to other people! In fact, according to a study conducted by marketing research firm SOM for the ministère de l’Économie et de l’Innovation du Québec (MEI) in 2018, a third (33%) of Quebec businesses claim to have suffered loss or damage at some point.
The best way to deal with the difficulties arising from an unexpected crisis is to imagine it happening BEFORE it happens, and preparing yourself . . . as if it were real! This way you’ll be able to better protect your employees and assets from imminent danger, limit the damages caused by the incident in question, and resume your activities in a timely fashion. So how exactly do you go about establishing a business continuity plan? Read on to find out!
1) Determine what your main products and services are
The goal of this first step is to determine the challenges associated with your various sources of revenue, and to define your company’s strengths and weaknesses. For example, if a single product generates 100% of your sales, the incapacity to produce or deliver said product to your regular clients will have a catastrophic impact on your business.
Inversely, if your SME offers a wide range of services—say a dozen or so, each representing approximately 9-10% of your sales—a temporary incapacity to offer one, two, or even three of them will only have a moderate impact on your business. That being said, make a list of all your main products and services, from highest to lowest grossing, or according to the number of clients who benefit from them.To support you in this process, Quebec government has made available to businesses a business impact report that you can fill.
2) Evaluate the potential impact unexpected events can have on your company
Now that you’ve established what your main products and services are, you need to determine what potential risks could most affect your SME. For a manufacturing company, a stop in production caused by several employees’ inability to come to work, would be a potential impact.
Recently in Canada, several food factories were forced to close their doors for 14 days in order to limit the spread of the coronavirus. Should this happen to you, how long would your current inventory last?
An inventory issue when it comes to your raw materials is another possibility. If you rely on a single supplier for all your production material, you are putting yourself in a very vulnerable position should you find yourself short on inventory. And what if your supplier is also forced to cease activities due to a natural disaster? What then?
3) Make a list of all measures necessary to protect your company
The previous step outlined two potential issues: employees incapable of coming to work and a single supplier forced to close shop. Now you need to come up with a strategy to help limit the impacts. What preventive measures can you implement to improve your reaction to adversity? We suggest using the 4P method—personnel, procedures, profits, and partnerships—to come up with quick and efficient solutions.
To limit the spread of the coronavirus, rethink your workplace’s organization, following public health recommendations. For instance, you could install Plexiglas dividers to separate employees in the production line, assign one of your work teams to daily disinfecting, and consider buying protective equipment, such as masks, visors, and gloves.
Some of your employees may be required to self-isolate. To remedy this issue, plan training sessions to ensure you have a back-up for every position. You might want to document the processes and responsibilities of each employee to make it easier for others to adapt to a new role.
If you intend to let your employees work from home, you’ll need to review all of your processes. Do your employees have the equipment they need to carry out their tasks? What about the security of your company’s data? Meetings can of course be held via cloud communication solutions or videoconferencing tools such as Google Hangouts, Zoom, Skype or Teams, just to name a few.
To maintain your profitability, you need to be able to get supplies continuously, under advantageous conditions. Find alternative suppliers. Local suppliers, for example, may be more efficient, as their merchandise doesn’t need to cross the border.
Enter into an agreement with another reliable supplier and give them a small portion of your raw material needs. This will allow you to determine whether the quality of the product is comparable and if delivery times are respected, in preparation for another crisis.
If your communications with clients and suppliers is done on the basis of e-commerce, you depend on the reliability of your Internet network. You need to be prepared for any potential issues that may arise as the result of a service outage.
Demand that your telecommunications provider have a back-up solution on hand to ensure business continuity. In the event of a service interruption, make sure you have access to a back-up mobile network: Guaranteed Internet Access is a solution you can ask for!
4) Revise the plan regularly
Having a business continuity plan you can count on is great! But being able to improve it as the situation evolves or based on your SME’s growth is even better! It’s therefore crucial that you revise your plan on a regular basis.
When you adopt a well-designed business continuity plan, you give yourself an undeniable edge over the competition. Not only can you respond to incidents more effectively as they arise, you can also pat yourself on the back, and with good reason too, for thinking ahead.
Business continuity plan: 5 suggestions for SME managers
- Appoint a coordinator to help you with crisis management.
- Get financial flexibility from your banking institution to easily apply the remedial measures set out in the plan.
- Draft a communication plan for employees, senior managers, customers, and suppliers.
- Put your business continuity plan to the test through simulations with the different stakeholders, and make any necessary improvements.
- Use the same provider for all your business telecommunications services to benefit from a single point of contact for all your services.
29 May 2020, By Videotron Business
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Sources : Selligent, Forrester Research