Running a small business can be full of surprises, some pleasant, such as suddenly gaining a new customer, and others negative, such as storms, technical issues, illness, or the loss of a key employee. These disruptions can have an impact on your operations, but a well-planned continuity strategy can help you weather the storm.
While the unpredictability of running a small business can be daunting, it's important to remember that challenges often present opportunities for growth and innovation. Many successful entrepreneurs have turned unexpected setbacks into catalysts for positive change, leading to improved processes, diversified revenue streams, or even entirely new business models. By maintaining a flexible and resilient mindset, small business owners can not only survive disruptions but potentially thrive in their aftermath.
A continuity plan is a critical tool for keeping your small business running even in the event of an unexpected emergency. According to Fed study, nine out of ten small firms experienced a financial or operational issue in 2023.
This statistic underscores the importance of preparedness for small businesses. While larger corporations may have more resources to weather storms, small businesses often operate with tighter margins and less room for error. However, this vulnerability can also be a strength. Small businesses are typically more agile and can adapt quickly to changing circumstances. By leveraging this agility and combining it with a robust continuity plan, small business owners can create a powerful defense against potential disruptions.
Here are the basic steps for developing a business continuity strategy to ensure that activities can continue during and after a disruption.
Develop Your Plan
Clear communication is critical to staying in business during difficult times. Knowing exactly how to contact your team can help you save time and stay organized no matter what is going on around you.
Organize your team's contact information in one location: Create a spreadsheet with all essential employees' contact information, including phone numbers and personal addresses.
As a precaution, request emergency contacts, such as a spouse or close family member. Store this information digitally and in a secure area so that it is quickly accessible during a crisis. If your organization relies heavily on suppliers or vendors, make sure to record their contact information as well.
For example, if you own a bakery, you may keep a list of suppliers for essential goods such as wheat and butter. Although you may have this information stored on your phone, your team members must also be able to access it in case you are unavailable.
Put someone in charge. Assign someone from your team to lead emergency communications, as well as an alternate. If your small firm has multiple locations, consider assigning a coordinator and backup person to each one.
Establish backup communication channels: If you are dealing with a natural disaster, a weather-related issue, or a technological incident, you may be unable to communicate via phone, video conferencing, or email. Ask your IT team or an outside managed services provider to devise a strategy for staying in touch with your team if the power goes out or your internet or phone service fails.
Some important considerations to ask include whether you need an electrical generator, whether business should invest in backup internet solutions such as hotspots, and whether your leadership team requires laptops to operate remotely.
It is far easier to complete these activities ahead of time than during a disaster or emergency.
In addition to these communication strategies, consider implementing regular drills or simulations to test your continuity plan. These exercises can help identify potential weaknesses in your plan and familiarize your team with emergency procedures. They can also boost confidence and reduce panic in the event of an actual crisis. Remember, a plan is only as good as its execution, and practice makes perfect.
Identify Key Business Functions
Documenting your important business functions might help you prioritize tasks during an emergency. If some of your staff are unable to work or crucial resources become unavailable, you may need to prioritize the bare necessities.
Prioritize critical actions. Critical business operations are actions that your internal employees must accomplish in order to provide the products or services on which your consumers rely. Assume you own a children's hair salon and cutting hair is a vital business function. If an emergency stops you from functioning at your regular location, you'll need to find an alternate venue — perhaps a salon across town willing to share space — to continue servicing your clients securely and efficiently.
Make a list of important accounts: It will be difficult to carry out important business operations if you do not have access to your financial accounts. To keep your operations operating, you'll need access to your bank account, payroll provider, as well as your rent and utilities accounts. Make careful to document these and other essential bank account numbers, and consult with your experts about whether anyone else on your team should have access to these accounts.
Make time for succession planning: Most small business owners want their company to survive even if they can no longer run it. Doing succession planning with a team of specialists, such as your attorney and business consultants, and constantly updating your succession plan, can assist ensure that you have a say in how your company is run if you are unable to lead it.
When identifying key business functions, it's also crucial to consider the interdependencies between different aspects of your business. For instance, while cutting hair might be the primary function of a children's hair salon, other elements like scheduling, inventory management, and customer service are also vital to the overall operation. By mapping out these interconnections, you can develop a more comprehensive understanding of your business's ecosystem and create more effective contingency plans for various scenarios.
Develop Recovery Strategies
Making sure your company is covered is beneficial while recovering from a severe setback. State Farm® provides small business insurance solutions, including a Business Owners Policy (BOP), which provides a variety of coverages to help protect your specific firm. Your State Farm agent can help you safeguard your small business so you can concentrate on developing it.
While insurance is a crucial component of recovery strategies, it's equally important to focus on building resilience within your business operations. This can involve diversifying your supply chain to reduce dependency on a single source, cross-training employees to perform multiple roles, or developing alternative revenue streams. Additionally, fostering strong relationships with your local business community can provide invaluable support during challenging times. Remember, recovery isn't just about bouncing back—it's about bouncing forward and emerging stronger from adversity.
