Business Continuity Planning

Small and medium-sized businesses (SMEs) have been urged to plan ahead this year or face putting their livelihoods at risk. Aviva , in its bi-annual SME Pulse survey, says companies that don’t take the time to prepare disaster recovery and business continuity plans (BCPs) are more likely to close in the first two years of trading.

A BCP seeks to identify a small business’s current service levels. It requires a risk assessment identifying the key threats to the business, puts in place a plan to manage any incident, and includes business recovery planning as well as rehearsal and maintenance planning.

In the Aviva survey, half of SME owners questioned revealed they had no BCP in place, and a further 16% said they didn’t think they needed one. Only 36% of respondents were even aware of BCPs and what they were for, while, worryingly, only a quarter (28%) of business owners said they had a BCP in place. The remaining 6% didn’t know if they had a BCP or not.

The Aviva survey found that business owners grossly underestimate the time it could take to get their company back on its feet following a serious incident or interruption. The majority of SMEs believe it would take them only a week (33%) or a month (31%) to return to normal trading. But Aviva says a return to full trading can often take a business more than a year.

This is echoed by the Federation of Small Business , which says 80% of SMEs affected by a major incident close within 18 months, while 90% of SMEs that lose data from a disaster shut within two years. This is a major worry considering 99% of businesses in the UK have less than 50 employees.

In a report on major incidents and small business, the FSB states: “Small businesses, by their nature, are more vulnerable to the impact of major incidents and disasters and the impact all too often is terminal. This has a knock-on effect on the whole supply chain in which they were involved and the community in which they were based.”

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