Eight in ten companies affected by a major incident close within 18 months and 90 per cent of businesses that lose data from a disaster are forced to shut within two years.
Proper planning can limit how badly an emergency affects an organisation, yet half of the businesses surveyed by Aviva admitted to having no business continuity plan (BCP) in place.
Thorough planning for the future is essential to the ongoing success of a business, yet 16 per cent of the SMEs surveyed by Aviva said they didn’t think they needed to have a BCP in place.
In fact, just 28 per cent of business owners who took part in the research said they had a BCP, with 64 per cent either unsure as to their purpose or not aware of the term.
Given these findings it is really important that businesses take time to assess the factors that might have an impact on their business and, where necessary, implement risk management measures to reduce the risk and plan how they would continue to trade until the business is fully operational again.
This encourages businesses not only to review areas of their operation that they may not have previously considered, but also to be more proactive in protecting their interests.
The benefits to SME owners in working through a BCP are not just limited to knowing how to react to emergencies. Anecdotally, major clients are increasingly making it a requirement for their suppliers to have a BCP in place when they negotiate contracts, to protect their own business operations.
Preparing a BCP helps companies gain a better understanding of the structure of their business. It may reveal, for instance, that a business is over-concentrating on a single client or sector and it can be used as a proactive tool by identifying any business strengths and potential areas of growth.
As well as assessing fire, flood or IT issues, it is also important that SMEs review the key threats relevant to their particular sector. For example, last year’s prolonged bad weather had a major effect on road travel, not just disrupting haulage but also the mobility of staff and customers across all types of business.
Establishing how long it will be before the business is up and running after a major event, and whether actions such as moving into temporary premises will be necessary, can be overlooked or underestimated by businesses.
According to Aviva’s research, 64 per cent of businesses thought they would probably return to normal trading within a week to a month² following a serious incident. However, according to Aviva’s commercial specialists, in fact, it can take more than a year.
Creating a BCP need not be an arduous task. Aviva has created a quick and easy way to create their own plan called ‘Business Continuity Planning for Small Business’, which is free to download and breaks down the process of creating a BCP into five simple steps.