What are the risks of not having a business continuity plan?

What are the risks of not having a business continuity plan?

Considering the wide variety of threats that businesses face today, it may be surprising to learn that many aren’t prepared for business-affecting emergencies or disasters. Unfortunately, it’s true: a study on business responses to the COVID-19 outbreak found that 51% of organizations worldwide do not have a business continuity plan.

Unforeseen events such as natural disasters, IT failures, and key staff falling ill can make it difficult or even impossible to carry out day-to-day business activities. A business continuity plan is therefore essential in minimizing business disruptions and ensuring that a business can keep operating at least at a minimal level during an emergency.

However, if an organization doesn’t take business continuity planning seriously, they’re risking the following:

Reduced productivity

When IT systems shut off or become unavailable, employees can’t access the applications and resources they need to perform their work. While offline solutions may mitigate the risks of downtime, these may not have the functions necessary to carry out certain tasks.

In addition, some employees may feel stressed because they can’t get any work done, which means a business is also risking lowering their employees’ morale by not properly handling unexpected IT failures. That’s why it’s important that disruptions are addressed rapidly to avoid significant dips in productivity.

Financial loss

Downtimes or disruptions prevent operations from going smoothly, and customers might not receive positive experiences — which can translate to significant revenue loss. This can be catastrophic for small businesses, especially considering that unplanned downtime costs around $9,000 per minute.

What’s more, the damages caused by disasters can be extremely costly. In 2020, natural and man-made disasters cost $83 billion, $76 billion of which were damages incurred by wildfires, thunderstorms, floods, and hail. It’s therefore crucial to have a strategy in place to mitigate disasters and emergencies as well as unnecessary financial damage.

Related reading: 4 Ways business continuity planning saves money

Reputational damage

A business’s response to a crisis can have an enormous impact on its reputation. For instance, if a brand makes a social media gaffe, then people might assume that the brand is careless. Or if a company experiences a data breach and fails to inform the appropriate parties, then the public might feel that the company is untrustworthy. There are so many ways in which mishandling crises can ruin a business’s reputation, so it’s important to be prepared.

Business failure

Reduced productivity, revenue loss, reputational damage — all of these could eventually spell the end of a business. If an organization doesn’t know how to address and manage these risks, then it might not be able to bounce back from a major crisis. But with appropriate plans of action and preventative measures in place, a business can recover right away and minimize potential damages.

Injury and death

In the event of natural disasters, violent incidents, and other dangerous emergencies, the safety of employees, customers, guests, and other individuals must be of the utmost priority. It's therefore crucial to effectively communicate your business continuity plan to stakeholders to inform them of the steps they need to take before, during, and after an emergency or disaster.

It makes all the difference to ensure that everyone in a company is aware of what they must do during a crisis. Businesses can consider providing specific training to make sure people properly fulfill their responsibilities when disaster strikes.

Having a business continuity plan will not only help avoid panic and uncertainty in a crisis, but also prove to stakeholders that your business is resilient enough to handle any unforeseen challenge. We at Kortek Solutions can help you future-proof your business with our comprehensive business continuity solutions. Get in touch with us today!