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Now Is the Time for a Business Continuity Plan

Cadence Bank explains how to protect your business from any disasters and disruptions with a continuity and resiliency plan.

June 1 is a critical date for almost every business that operates along the Gulf Coast or the Atlantic: It marks the official beginning of hurricane season. This makes now the perfect time to formulate plans for how you will minimize the potential impact of not just a hurricane, but any kind of disaster to your business — including server crashes, security breaches, extended power outages, sabotage and cybercrime.
The key is to devise a business continuity and resiliency plan to recover after a disaster. This plan will lay out detailed processes and procedures for the steps your company will take after a disaster or any other type of business interruption in order to get your operations back up and running again as quickly as possible.




The Two Parts of Business Continuity Planning

A business continuity and resiliency plan should consist of two main parts:

1. Short-term planning to minimize the immediate impact of the disaster or business interruption — You want to make sure your critical infrastructure and systems are back up and running as quickly as possible in the immediate aftermath of the disaster or interruption. This includes your physical facility, telecommunication and IT systems, hardware and software, and other critical business equipment.

Facilities often are the first priority after a natural disaster, since employees who don’t work from home will need to have somewhere to report for work. One option is to contract with a disaster recovery hot site that will provide office space where employees can work temporarily until your facilities are operational again.
Telecomm and IT systems usually are the next disaster recovery priority. You can’t necessarily assume that cell phones will work post-disaster, so think about possible alternative communication methods like two-way radios, for example. Meanwhile, secure offsite hosting might be an option for your IT network applications, while software should be backed up regularly with original copies stored offsite. Using cloud computing is one way to minimize the risk of these disruptions after a disaster.

2. Longer-term planning to ensure ongoing business operations in the weeks and months after the interruption — Once you have made it past the first few post-disaster days, you will need to plan for how your company will ramp back up to pre-disaster or pre-interruption production and service levels and maintain them.

Unfortunately, one out of every four businesses that experiences a disaster goes out of business within one year, according to the Federal Emergency Management Authority (FEMA), while nine out of ten fail within two years, according to the U.S. Small Business Administration (SBA). Statistics like these reveal how important longer-term continuity and resiliency planning are to the survival of businesses after a disaster or serious business interruption occurs.




Identify Your Vulnerabilities

Another key component of business continuity and resiliency planning is determining where your company is most vulnerable to specific business interruption risks. Then you should quantify the potential impact of those risks on your business so you know how to prioritize your planning time and resources.

Designate each one of your business systems, operations and functions as either critical, vital, sensitive or non-critical. Restoring critical functions that your business cannot operate without should be the highest priority and receive the bulk of your continuity and resiliency planning resources, while vital and sensitive functions should be next in line. Non-critical functions should be last on the priority list and addressed only after all other functions are back up and running.

Finally, be sure that you have compiled a list of current contact information for all of your employees, customers and vendors. This list must be stored in a safe place where it is accessible after a business disaster or interruption, such as in the cloud or a hard copy stored in a bank safe deposit box. You will need to let employees know when and how they are to report to work post-disaster and also let your customers and vendors know how the disaster or interruption could impact their orders and deliveries.
One thing companies often neglect in their business continuity and resiliency planning is the financial impact of a disaster or long-term interruption on their companies. If operations are disrupted for a long time, this could severely affect your sales and cash flow and make it difficult to meet payroll and cover other fixed expenses.
Business interruption insurance coverage can provide funds to meet these and other expenses after a disaster or serious business interruption. Talk to your insurance agent about whether such a policy might make sense for your company.




Start Planning Now

Nobody likes to think about disasters, but history has shown that they can and do occur — and not always to “somebody else.” Therefore, it would be wise to plan now for how you can minimize the impact of a disaster or serious business interruption on your company.
Disasters can occur when you least expect them. Make sure you proactively prepare and have a business continuity plan in place. Consult Cadence Bank’s Treasury Management team for further advice on protecting your business.
This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.

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