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Road testing your Business Continuity Planning – brought to you by COVID-19

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Road testing your Business Continuity Planning – brought to you by COVID-19

By , March 23, 2020
business continuity planning - covid-19 - succession plus

This is the time the rubber hits the road in terms of businesses’ ability to survive (and thrive) in difficult times – employees working from home, remote meetings and events, IT systems stretched and the economy a rodeo ride of uncertainty.

I met with a mid-market business owner about 12 months ago in Melbourne, as we completed the non-financial/operational analysis of his business and got to Business Continuity Planning, he simply said: “we have one – we prepared it for the bank years ago – it’s bullshit but we have it!”

I wonder how he is going this week with the incidence of COVID-19?

A Business Continuity Plan (BCP) is designed to manage exactly what we are going through right now. Here are some of the questions the plan will address:

  1. How does the business continue if we can’t use the office, access our files or hold face to face meetings?
  2. What is the best way to manage staff remotely?
  3. Will our IT system cope with 80 people “logging in from home”?
  4. Will customers still get looked after, services provided, invoices raised and ultimately money still flow through our bank account?

A good BCP should cover all of these issues and more. It should provide detailed instructions as to how the business should be managed in multiple circumstances not just COVID-19, but the recent bushfires, floods and other natural disasters we regularly encounter in Australia.

If you haven’t already got this in hand, then follow this 6-step guide to “catch up“ and get on top:

Step one: List all of the potential areas which need attention and their solutions.

Some of the areas would include:

  • Phone answering
  • IT systems (including data security as employee use “home” internet connections)
  • Deliveries (both outbound and inbound)
  • Field visits or service calls
  • Compliance – lodgements, payments and banking
  • Employee/HR issues and solutions

Step 2: Rate them in terms of two key factors

  • Likelihood (how likely is this issue to arise/occur) and
  • Impact (if it does occur how seriously will it impact the business)

Then, give each a score out of ten

Step 3: Rank them in order of importance – likelihood and impact (high to low)

Step 4: Start at the top of your list

Those most likely to occur and with the highest impact – these are the things that could cause maximum damage and should be addressed first.

Step 5: For each, you need a short simple step by step guide on how to handle/manage this risk/issue

Step 6: Communicate (more than you think you need to) to all stakeholders regularly – outline the plan and update if things change.

Then once this is all over and things settle back down (don’t worry too much, they will eventually), I suggest you allocate some time to do this properly so if and when the next unplanned event comes along – you, your business and your team are better prepared.

 

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Craig West

Craig West

Managing Director | Succession Plus

Craig West is a strategic accountant who has over 20 years’ experience advising business owners. His background as a CPA in public practice, provided invaluable experience in the key issues of concern to business owners. Following 6 years of study to gain two masters degrees, Craig focused on Capital Gains Tax (CGT) for business sales advising on strategic management of tax issues. This experience formed a very strong view that business owners (and often their advisers) were unprepared and unaware of the steps required to prepare a business for exit.

Craig now acts as a strategic mentor for mid-market business owners and has written four critically acclaimed books on employee incentives, succession planning, asset protection and exit strategies. Craig has conducted numerous seminars and keynote presentations throughout Australia & internationally, including adviser education programs for the Institute of Chartered Accountants and CPA Australia.