Though you likely can’t foresee a tragedy, there are ways to minimize the damage of disasters, from economic fallouts to weather catastrophes. Think: the floods in Alberta, Oklahoma tornadoes, the Toronto-area flood in 2013, wreaking havoc on homes and businesses.
Small and medium-sized businesses can be most vulnerable to sudden financial bumps and being prepared is the best way to avert loss of revenue and productivity.
Any business can learn from David Rumer, Vice President of Market Development in Canada at Sage North America, a leading global provider of accounting, ERP and other business management applications and services for small and medium-sized businesses. They have more than 500,000 customers in Canada and 6 million customers worldwide.
Prior to joining Sage, Rumer held several business development and marketing leadership roles at Oracle, SAP and TopSystems.
B2BNN asked him about how to prepare a business for the worst:
B2BNN: Why should SMB owners make business continuity and emergency preparedness planning a priority?
Rumer: It’s very difficult to plan for the unknown, but you can try to stay one step ahead of unexpected emergencies with a business continuity plan.
Having systems and processes in place before an emergency event occurs is critical to an organization’s viability. Getting your organization back to normal operations as quickly as possible will minimize service disruption and help preserve corporate reputation.
B2BNN: What is at stake for SMBs?
Rumer: By failing to properly prepare and regularly test the plan, small businesses are vulnerable to disruptions that could ultimately result in loss of revenue, profit and productivity.
Any disruption to your business will affect at least one, and likely multiple supporting business divisions – whether that be people or technology.
Last year, Sage surveyed Canadian small businesses on the impact that the severe 2013 winter had on their business and organizations stated that the top three challenges they faced were lower revenue, lower productivity, and lower profit.
Only 25 percent of Canadian businesses surveyed had a bad-weather plan in place last year, and this is only one type of emergency to keep in mind.
B2BNN: What are key steps that small businesses can follow to develop a business continuity plan?
It’s important to understand that a plan can’t be developed overnight. Plans take time and collaboration between all levels of an organization.
Planning and tools, including software, can help organizations prepare for an emergency and minimize the impact to business. For example, Sage has solutions that enable employees to work remotely should severe weather strike or an emergency prevent them from getting to the office.
[Editor’s note: See below for more advice from Rumer on what SMBs can do to implement a business continuity plan:]
- Developing a basic emergency plan. This will help mitigate disaster after an unpredicted event occurs. The overarching business continuity plan will allow operations to resume.
- Designate an emergency point person who can lead the plan.
- Consult a professional who will be able to recognize possible crises you may not have considered, and can also inform you of the best solutions.
- Educate and prepare all employees, including scheduling emergency drills and exercises, as well as gaining feedback from then. Providing employees with this knowledge will help to ensure your company can respond and recover.
- Back up essential data by choosing an on-site system, an off-site server or the cloud. SMBs should connect with an accounting software provider, such as Sage, to discuss their options. Backups should be performed a few times a week and whenever you upload a large amount of information. Information is fundamental to business operations and losing this vital data could result in a small business closing up shop.
B2BNN: Emergency preparedness plans vs. business continuity plans: what’s the difference, and why does every business need one?
Rumer: There are three key elements in planning: business continuity, emergency response, and disaster recovery.
Having an emergency response and disaster recovery plan means your company has a plan of action to mediate and restore damage after an incident occurs.
A business continuity plan is the process that allows operations to continue. A business needs both. Emergency events can occur in many forms, and it’s impossible to predict when the next will occur, and what it will be.
Small businesses in particular may not be able to afford or cope with a costly disaster, especially if their business is unable to resume.
This could include natural disasters like flooding, hurricanes or earthquakes, or something more common such as power outages, computer viruses and network disruptions – even traffic chaos or congestion during the upcoming Pan Am Games in Toronto can result in employees missing work.
B2BNN: What are the top misconceptions business owners have about business continuity planning?
Many businesses believe plans are not used until a disaster occurs, when in reality they should be living and breathing documents that are consistently reviewed and updated.
Another common misconception is that these plans are only useful to the disaster management team. Everyone in the company should be familiar with the plan, including any updates or changes made to it.
Some organizations also believe that if you have an emergency plan, you have a business continuity plan. Or, if you have one, you don’t need the other.
Again, these are two different plans. Emergency plans address how you manage specific incidences, while a business continuity plan outlines everything that needs to be in place to keep business operations running smoothly.
Also read our advice on dealing with a company crisis.