Guest Column: Every Business Needs a Business Continuity Plan

Gail Moraton

Many small business owners have finally re-opened after a year of COVID-19 lockdowns and sheltering in place orders. However, those same businesses who are now operating but located in coastal states along the Gulf of Mexico and the Atlantic Coast are facing an active storm season. According to the Colorado State University, the 2021 Atlantic Hurricane Season is forecasted to be particularly active with approximately 17 named storms; four of which could be major hurricanes (category 3 or higher).

Businesses of any size can suffer a disruption at any time. However, small businesses have it tougher. While large organizations have more financial and physical assets both before and after a disaster, smaller businesses often lack the financial resources for recovery. Small businesses can’t spread risk across multiple facilities in different locations and may not have ready access to alternative suppliers. Yet, Mother Nature, man-made threats and other extreme events are not particular about who they strike, damage or disrupt. Recognizing this reality, one of the keys to survival for small businesses is preparing and planning for potential business disruptions of any kind. A business continuity plan can help small businesses focus on preparing for interruptions, regardless of the specific cause, so they can reduce their losses, get a jump start on recovery and re-open as quickly as possible.

Know Your Risks

The two biggest mistakes many small businesses make are failing to identify their potential threats and underestimating the severity of a known potential threat. To avoid this mistake, your first step in business continuity planning is to complete a risk assessment. After completing the assessment, you will be able to identify the greatest threats to the business, the likelihood or probability for each of those threats, how severe each event could be, and the potential impact on your business functions or processes.

  1. Identify the most serious threats to your business by focusing on the most likely disruptions and their impact.
  2. Find and review your county’s hazard analysis or mitigation plan, which can usually be found on the internet. This will include past threats and disasters in your area and geographical hazards related to severe weather patterns, wildfire concerns, proximity to flood plains, major airports, dams, ports, other companies with hazardous materials, etc.
  3. Consider risks and threats related to your business that stem from the nature of the operations or from specific situations that might originate inside your organization.
  4. Identify your potential risks, rank each risk by how likely it is to happen (probability) and the potential impact or amount of damage the risk is capable of causing (severity).
  5. After you have ranked the probability and severity levels for each risk, you can develop and document a plan for those risks with the highest score. You should assume these risks will strike your business and determine what controls you can implement to minimize your risk.
Know Your Operations

The next step in business continuity planning is understanding your business’ most critical functions and how to perform them if there is a disruption. Business functions considered extremely critical would include those with any legal, contractual, regulatory or financial obligations, along with other functions that need to be recovered in the first 24 hours, first two to three days, or first week after a disruption occurs.

  1. What is your main product or service? What other business functions or processes do you perform to run your overall business, such as production; service delivery; manufacturing; customer service; sales and marketing; purchasing; accounting and finance; human resources; administration; and information technology?
  2. What activities do employees perform on a daily, weekly, monthly and annual basis or other special times of the year?
  3. What are the consequences if the function can’t be performed? Can your business survive without this function? How much downtime can you tolerate for each function? Rank these business functions in priority from extremely high to low.
  4. When you have determined which functions are most important, for each of those business functions, you should consider and document:
  • Who performs and helps perform this activity?
  • What technology is needed to complete it?
  • Are there any other dependencies?
  • How is the activity performed? Are there any manual workaround methods if a dependency is not available?
  • Can the function be performed at a different location?
  • Who receives the final product or service?

To help business owners and managers create an effective plan, the Insurance Institute for Business & Home Safety (IBHS) created OFB-EZ™ (Open for Business-EZ), a free, easy-to-use tool for building and maintaining a business continuity plan. Designed specifically for small- to mid-size businesses, it does not require any previous experience with or knowledge of business continuity planning. The OFB-EZ toolkit provides sections on the business’ employees, equipment, suppliers and vendors, key stakeholders, information technology and finances. An exercise to test the completed plan is also included.

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To learn more about these steps and other business continuity best practices, and to download the toolkit, go to The kit is also available in Spanish at OFB-EZ is also available as a mobile app on both Google Play Store and Apple’s App Store.

Gail Moraton is the business resiliency manager for the Insurance Institute for Business & Home Safety (IBHS). She is a certified business continuity professional issued by DRI International. The IBHS mission is to conduct objective, scientific research to identify and promote effective actions that strengthen homes, businesses and communities against natural disasters and other causes of loss. Learn more at

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