Imagine a thriving business brought to its knees by a single event. In early 2024, UnitedHealth’s Change Healthcare subsidiary suffered a massive cyberattack that potentially exposed sensitive data from 100 million people. The financial toll was staggering: $2.5 billion in total impacts within nine months, including $1.7 billion in direct response costs and $705 million in business disruption.
Companies may also experience other threats or disasters in other ways. Personal ones, like the death of the owner, can leave an organization in turmoil. In many cases, the owner isn’t just a figurehead; they are the company’s heartbeat, the driving force behind its vision, leadership, and decision-making.
When that guiding presence suddenly vanishes, the impact reverberates through every layer of the organization. Employees may feel lost without clear direction, unsure of who will take charge or how their roles might change. Clients may begin to doubt the company’s stability, questioning whether the quality, service, or trust they’ve come to rely on will remain intact.
For family members, the loss is doubly painful—grieving a loved one while also facing the potential unraveling of shared dreams and financial security.
In the absence of a clear succession plan or business continuity strategy, the company can become a battleground for competing interests, with disputes over leadership, ownership, or the future direction of the business. Even the most successful enterprise, one with years of profitability and growth, can falter under the weight of such uncertainty.
These scenarios are a stark reminder of businesses’ vulnerability to unexpected crises. A robust business continuity plan (BCP) is your safeguard, ensuring operations remain steady despite disruptions.
No matter the size or industry of your business, having a well-thought-out continuity plan isn’t optional—it’s essential. You must know how to create a business continuity plan that protects your assets and secures your enterprise’s future.
What is a Business Continuity Plan?
A business continuity plan (BCP) is a proactive strategy to help organizations identify potential risks and establish actionable steps for maintaining seamless operations during a crisis. By pinpointing vulnerabilities and weaknesses, a BCP ensures companies can protect their personnel, assets, and reputation.
This plan includes assessing how risks impact operations, implementing safeguards, testing procedures for effectiveness, and regularly reviewing processes to stay current. A well-executed BCP minimizes downtime, allows businesses to continue serving customers, and reduces the risk of losing them to competitors.
By developing a BCP, companies can safeguard their future and enhance resilience in uncertainty.
Key Components of a Business Continuity Plan
A successful business continuity plan must have essential components that enable a company to weather crises and maintain operations:
Risk assessment and business impact analysis
Identifying all potential points of failure and prioritizing the most significant risks to an organization’s success is crucial.
If everything suddenly came to a halt, the steps taken should ensure the business survives—not just for today, but for the generations who will carry on its legacy. Safeguards must be in place to protect the vision and hard work poured into the company. These considerations should focus on addressing vulnerabilities before they escalate into major disruptions.
Emergency response procedures
Executives, team leaders, and IT administrators must collaborate to define the scope and purpose of key functions in the BCP. Their roles and responsibilities should be clear: Who coordinates problem-solving efforts? Who handles data recovery? Who serves as the point of contact for each team?
This part of the BCP should include diagrams, checklists, emergency management protocols, guidelines for initiating responses, and a glossary of terms. A communication strategy for handling a crisis is also essential to ensure swift and effective action.
Critical business functions and recovery strategies
A robust BCP addresses challenges like data loss, human error, reputation repair, customer acquisition, resource allocation, and regulatory compliance. It should clearly outline the steps to address and resolve disruptions in these areas.
Testing and maintenance
Regular training, realistic drills, and post-exercise assessments ensure teams can execute the plan effectively. Continuous review and updates help keep the plan relevant to evolving risks and business needs.
Benefits of Having a Business Continuity Plan
Implementing a BCP provides both tangible and intangible benefits that can strengthen your organization’s ability to navigate crises effectively:
Minimized downtime
Every moment of inactivity can lead to financial losses. A well-structured BCP enables your business to maintain productivity and safeguard assets and revenue streams by securing the supply chain and ensuring consistent service or product delivery.
For example, if a natural disaster makes your office building inaccessible, a robust plan allows for seamless remote work. Similarly, backup servers or data centers can ensure access to critical systems during power outages or network failures.
Customer confidence
Reliability builds trust—customers, stakeholders, and the public value companies that demonstrate resilience. With an effective BCP, you can maintain operations when others falter, enhancing your reputation, gaining market share, and fostering customer loyalty.
Regulatory compliance
Numerous sectors are subject to legal and regulatory standards requiring preparedness. Adhering to these standards through a BCP prevents legal complications and potential penalties so your organization can operate within compliance frameworks.
Long-term resilience
A strong BCP protects the security and integrity of your data, intellectual property, and physical infrastructure. It empowers your business to weather the storm, maintaining not only its function but also its spirit. After all, you have a responsibility to the people who rely on you and honor the legacy you‘ve built, ensuring it thrives far into the future.
Common Mistakes to Avoid When Creating a BCP
Creating a business continuity plan requires careful consideration and collaboration to avoid common pitfalls compromising effectiveness.
Failing to involve key stakeholders
Employees are the backbone of your organization’s daily operations. A strong BCP must focus on their needs and include emergency communication protocols, evacuation routes, and recovery strategies.
Identify who oversees various areas and consider their input to foster ownership and familiarity with the plan. When you make your BCP inclusive, employees can confidently perform their roles during an actual emergency.
Neglecting to test or update the plan
BCPs are only effective when regularly tested and updated—they should evolve to address emerging risks and avoid significant losses. Here, testing allows you to identify weaknesses and improve existing strategies.
Ignoring supply chain vulnerabilities
Overlooking supply chain dependencies can be detrimental. For instance, a manufacturing business heavily reliant on raw materials could face catastrophic revenue losses over disruptions in its supply chain. A robust BCP should include contingency plans to address such vulnerabilities.
Relying on a single recovery strategy
No single solution fits all crises. Form a BCP management team comprising representatives from various departments to provide a comprehensive perspective. This way, your plan covers all contingencies and adapts to changing circumstances.
Not consulting a Certified Financial Planner®
Collaborating with a Certified Financial Planner® in Utah helps ensure your BCP integrates financial resilience, securing your company’s ability to recover and thrive.
A well-structured BCP also prepares your business for unexpected circumstances, such as the need to sell. It protects business value during transitions, whether due to financial strain, personal reasons, or market shifts. Likewise, it ensures uninterrupted operations, providing potential buyers with confidence in your company’s stability and long-term viability.
This approach safeguards your interests and positions your business for a smoother sale process, maximizing its worth.
The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the State of Utah or where otherwise legally permitted. All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication of future results. Moreover, this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons. Investing always involves risk and possible loss of capital.
Joe Griffin
Joe has been building and managing financial planning firms for the past 14 years. He loves the financial planning space and is very proud of the success and growth that has come from his proprietary marketing and leadership. Joe spent years being involved with the bright minds of the investment committee at Utah’s 529 college savings plan – a plan managing over 20 billion. Joe only works with firms that are stated fiduciaries on a client relationship. Joe is committed to leading a financial planning firm with ethics and integrity. The money management philosophy that Tencap subscribes to is built on strong academics and is supported by a highly impressive academic board. We can't wait to coach you on the excellence that Tencap stands for.
