In early 2020, a massive flood struck Jakarta, forcing many businesses to shut down operations for days to weeks, causing severe financial losses. However, companies with a well-prepared business continuity plan (BCP) managed to adapt quickly by switching to remote work, rerouting operations, and staying connected with clients. This is an example of a business continuity plan, which is essential to keep operations running during unexpected disruptions. A business continuity plan is more than a backup; it is a proactive strategy to ensure resilience, protect resources, and safeguard business reputation during crises. We will explore the importance of a business continuity plan and how to create one for your business.

What is a Business Continuity Plan?

A business continuity plan (BCP) refers to a plan that outlines how a company will continue operating during and after an unexpected event. These events can be cyberattacks, natural disasters, or pandemics. BCP ensures that personnel and assets are well-protected and can function quickly whenever a disruption occurs. A BCP covers all aspects of business operations, including IT, human resources, customer service, and more. BCP needs to be tested before an emergency event to ensure its effectiveness and identify possible weaknesses, which allowing for quick corrections.

What is Included in the Business Continuity Plan?

A business continuity plan typically includes:

• Analysis of Critical Business Functions: Identify all assets (including critical systems, business operations, data, etc.), their location, and the resources needed to maintain them. 

• Risk Assessment: List and prioritize risks (such as natural disasters, cyberattacks, supply chain failures, pandemics, etc.) based on their potential impact and likelihood. 

• Business Impact Analysis (BIA): This process assesses how disruptions affect operations and finances and determines the minimum resources and personnel required to continue operations.

• Strategies and Mitigation Activities: Develop strategies and mitigation activities to maintain critical functions during unexpected events. It includes identifying backup systems, alternate locations, and contingency plans for various scenarios.

• Communication Plan: Develop communication protocols to ensure efficient communication with employees, customers, and other stakeholders during a crisis.

• Testing and Maintenance: The plan is regularly tested through simulations to identify weaknesses, update it to reflect new risks or organizational changes, and train employees.

• Documentation: This includes contact information, a glossary of terms, policy details, and revision management processes to keep the plan current and accessible.

How Often are Business Continuity Plans Reviewed?

It is recommended that the business continuity plan be reviewed at least annually to ensure it remains relevant and effective. However, more frequent reviews are better whenever significant changes occur within the company or its external environment. These major changes can include new business processes, mergers and acquisitions, or external risks like environmental or geopolitical factors. Some companies review their plan every six months, especially if the business continuity plan is complex or the company operates in highly regulated industries like healthcare or finance. Regular reviews help the company adapt to new threats, technological advancements, compliance requirements, and organizational changes more effectively.

Why is a Business Continuity Plan Important?

Running a business includes predicting what’s ahead, including potential threats that may disturb business operations. Without careful preparation, any unplanned disruption for a period of time can cause financial losses, higher costs, and difficulty starting again. To prevent these consequences, the company develops a business continuity plan to maintain critical functions and quickly recover during and after unexpected disruptions. Business continuity planning also allows companies to identify vulnerabilities and prepare strategies to handle these weaknesses. This can improve resilience and reduce the negative impact of emergencies. It also demonstrates reliability and preparedness, which are essential to maintaining customer trust and protecting the company’s reputation. Minimizing downtime during disruptions helps companies serve customers and prevent them from going to competitors.Business continuity plans are also important to support long-term sustainability. Companies with robust continuity plans are also better positioned to survive disruptions. It serves as a unique competitive advantage, showing the company’s stability in facing emergency events. 

How to Create a Business Continuity Plan?

Having a business continuity plan is essential for entrepreneurs who want to maintain effective business operations during and after an emergency. Here is the step-by-step process to create a business continuity plan:

Identify Critical Business Functions

The first step is identifying vital business processes, systems, and resources for the company’s operations. Assess dependencies and prioritize functions that must be maintained or restored quickly during a disruption. A recovery team with assigned roles is necessary to focus on continuity plans. 

Conduct Risk Assessment

Analyze potential threats that could disrupt your business. These threats include natural disasters, cyber-attacks, power outages, pandemics, etc. Assess how likely each risk is and how severely it could impact your business of each threat to understand vulnerabilities. This process helps prioritize which risks need the most attention and guides the development of mitigation strategies.

Create Recovery Strategies

Based on the risks identified, create detailed plans to mitigate and respond to these risks. It includes preventive measures, alternative work arrangements, and resource management to ensure critical functions can be restored promptly. Recovery procedures should be clear and actionable to minimize downtime and operational losses.

Establish Communication Protocols

Communication protocols define how information will be shared during a crisis. It includes specifying communication channels, key contacts, and protocols for internal teams and stakeholders such as customers, suppliers, media, and government. Effective communication can maintain trust, transparency, and coordination throughout disruptions.

Test and Train

Train employees and relevant stakeholders on their roles within the business continuity plan to ensure their readiness during actual disruptions. Regularly test the plan through simulations, drills, or practical exercises to evaluate its effectiveness. This helps identify gaps and areas for improvement, ensuring the plan remains practical and up-to-date. The plan should also be reviewed and updated regularly to reflect changes in the business's internal and external environment. 

Empower Your Business Continuity Plan with the Right Capital from Phintraco Natha Kapital

A robust continuity plan needs more than strategies, but also the right support to turn the plan into action. Phintraco Natha Kapital not only provides essential capital but also strategic advisory services and a powerful business network to help sustain your continuity plans. Backed by the reputable Phintraco Group, we have a strong presence across ICT, property, manufacturing, and education sectors, enabling us to offer more than financial backing, but also insights, proven experience, and trusted partnerships. Whether you are navigating disruption or scaling for future growth, our tailored investment approach empowers your business to stay resilient and agile. Partner with Phintraco Natha Kapital and gain the advantage of strategic capital and expert guidance that fuels long-term success.Editor: Trie Ayu Feminin & Irnadia Fardila