Essential Crisis Management and Business Continuity Strategies for Small Businesses

Small business owners are no strangers to challenges, but what happens when one of those challenges rises to the level of a crisis?

Whether it’s a natural disaster, a cybersecurity breach, a supply chain disruption or the sudden death of a key team member, having plans for crisis management and business continuity ensures your business can withstand and recover from unexpected events.

Understanding crisis management and business continuity

A crisis management plan (CMP) is a plan for how your business handles unexpected and disruptive events. It’s essentially a series of steps you’ll take to help the company handle the crisis and minimize its impact on your operations, finances and reputation.

A business continuity plan (BCP) outlines how you’ll quickly resume operations after a major disruption.

The two plans might sound similar and are intertwined, but they’re not the same. A crisis management plan can help you respond to all types of disasters — not just those that threaten your ability to continue operations. For example, you might implement a CMP following a product recall or a bad story about your company in the press.

A BCP, on the other hand, helps you prevent and recover from disasters like a fire or tornado that destroys your business premises or a cyber attack that compromises your data.

So, just how important are crisis management and business continuity plans? According to the Federal Emergency Management Agency (FEMA), 25% of businesses never reopen after a disaster.

Below are tips to help you avoid being part of that unhappy statistic.

How to create a crisis management plan

1. Assess risks

Begin by identifying potential risks that could impact your business. Consider scenarios such as natural disasters, cyberattacks or significant market changes.

A useful tool for assessing risks is a SWOT analysis. SWOT stands for:

• What are your business’s advantages? Some examples of strengths include excellent relationships with suppliers, a specialized workforce, substantial financial resources, etc.
• What are your disadvantages? Are team members resistant to change? Do your competitors have a larger marketing budget? Take time to consider how and why competitors are doing better than you.
• These are chances for something positive to happen, but you need to claim them. Opportunities usually arise from situations outside of your organization, such as changes in the markets you serve, the technology you use or government policy related to your industry.
• Threats are anything that can negatively impact your business from the outside, like supply chain problems, shifts in market demand or talent shortages.

This exercise can help you understand your vulnerabilities and prepare for various scenarios.

2. Establish a crisis management team

Form a dedicated team responsible for crisis management. This team should include key personnel from different departments. Assign specific roles and responsibilities for:

• Gathering information on the crisis from credible sources
• Initiating, coordinating and overseeing the crisis response
• Reaching out for expert and legal advice

Assigning roles and responsibilities ensures everyone knows their part during a crisis.

3. Develop communication strategies

Effective communication is critical during a crisis. Create a communication plan outlining how the company will disseminate information to employees, customers, stakeholders, regulatory authorities and the media.

Identify the appropriate channels (email, social media, press releases, etc.) for different types of communications, and designate a spokesperson to ensure clear and consistent messaging.

4. Document your response procedures

Develop and document detailed response procedures for different types of crises. Your written crisis response plan should include step-by-step actions your team will take immediately after a crisis occurs.

Make sure these procedures are easily accessible during a crisis. For example, if your plan resides on an internal server, what happens if that server is inaccessible during the crisis? Do you have a printed version or a backup saved elsewhere?

Regularly review and update your plan to reflect changes in the business environment and your personnel.

5. Conduct training and drills

Regular training sessions and drills ensure your team can execute the CMP effectively. Simulate different crisis scenarios to test your procedures and identify areas for improvement.

How to create a business continuity plan

Your BCP might incorporate some aspects of your CMP, but its primary purpose is to help you maintain or quickly resume business operations in the face of disruption. Here’s how to develop and implement one.

1. Identify critical/vulnerable processes

Your BCP starts with understanding what’s most important to the business. Which IT systems, networks, people and suppliers are crucial to operations?

This identification process is known as a business impact analysis (BIA), and it can help prioritize recovery efforts and resources.

2. Identify recovery strategies

Based on your BIA, identify and document recovery strategies for critical business functions.

For example, if your business premises were no longer available, where could you set up an alternate work location? Could employees work from home and access necessary applications and data on the cloud? Can you partner with another business to temporarily use its premises?

If you lost a crucial supplier, could you find another vendor to provide the necessary products or services? How long would it take to get the supplies from the new vendor, and would it cost more?

Make sure your recovery strategies are feasible and cost effective.

3. Document your continuity procedures and communication plan

Create detailed, written continuity procedures outlining how to maintain or restore critical functions during a disruption.

Also, document your communication plan, including contact information for key personnel, vendors and stakeholders.

Make sure all employees are familiar with these procedures and that the procedures are accessible in the event of a disaster.

5. Test and update the plan

Test your BCP regularly to identify gaps and areas for improvement.

CIO.com recommends using a tabletop exercise to test your BCP two to four times per year. This exercise usually takes place in a conference room, and the business continuity team and other key personnel review the plan, looking for potential gaps and opportunities for improvement. Including newer employees in this exercise ensures you have fresh eyes on the plan that can detect weaknesses other team members might overlook.

Update the plan regularly to reflect changes in your business operations, technology and external environment.

By developing and implementing comprehensive crisis management and business continuity plans, you can minimize the impact of disruptions and ensure your business’s survival and recovery. By taking proactive steps and preparing for the unexpected, you can safeguard your business, protect your employees and maintain the trust of your customers and stakeholders