“Planning is important, but the most important part of every plan is to plan on the plan not going...
The Foundations of Business Continuity Planning (And the Most Common Area Continuity Plans Miss)
Whether you realize it or not, you have a continuity plan in place in your life somewhere.
Maybe it’s the backup power generator you never need, until the day the power goes out and you fire it up and realize it is one of the greatest investments you ever made. Or the jumper cables you’ve only ever used once but can’t imagine what would have happened without them. Or the spare tire that saved your family from being stranded in the middle of the night on a long road trip. Or the surge protector that kept your new 80” TV from being fried during that electrical storm.
Backup plans all have something in common: They are designed to allow you to maintain control, even when something beyond your control happens. Without a continuity plan, you are at the mercy of the direction the wind happens to blow on any given day.
You certainly don’t want that for your family (hence, the jumper cables and spare), and you don’t want that for your business, either.
Today, I want to zoom out a bit to look at how business continuity planning works side by side with other impact areas of risk to create an added layer of protection around your company.
Plus, we’ll look at the most common area of continuity planning that small business owners miss.
The Foundation of Business Continuity Planning
The foundation of continuity planning is to have strategies in place that work in synergy with the other risk management strategies you employ.
For instance, you may plan to have your son take over your business someday, but what if you become permanently disabled while he’s still a child?
When your continuity plan works in parallel with the other impact areas of risk, you can feel confident that your business can continue on, even in the event of an unforeseen situation.
You may be thinking, “Isn’t that what insurance is there for?” Yes, when it comes to the financial aspect of hazard risk, commercial insurance does a lot of the heavy lifting. But it’s not going to do anything for you when a competing business starts undercutting your prices or an OSHA violation shuts down your worksite for three weeks.
Bigger companies will generally have true continuity planning woven into every detail – some even have a risk manager internally. But that’s just not the reality for most businesses.
Growing small businesses are the most vulnerable when it comes to continuity. They’re focused on growth, they have less experience and they don’t know what they don’t know, so they typically don’t see the necessity of backup plans beyond one or two key areas.
No matter what kind of business you run, every impact area works together. Solving any of them in isolation doesn’t fully eliminate risk. You may have created a fantastic company culture and improved retention as a result, but what if your best people still choose to leave? Could your business continue working tomorrow if your top three people left today?
I don’t ask these questions to scare you, but it’s also not just a pointless hypothetical exercise in “what ifs.” Business continuity planning is about the difference between your company closing and staying open.
The Most Common Area Businesses Miss When it Comes to Continuity Planning
I’ve talked to hundreds of business owners in my life, and there’s one area that consistently gets ignored when it comes to continuity planning: internal succession plans.
It makes sense when you think about it. If you have a trusted employee who has been around for years and they want to buy the business when you’re ready, you would feel pretty confident in that plan, wouldn’t you? You’ve got someone who knows your business inside and out, knows how to do the work and how to sell it – what more could you need?
Two things can happen in this situation that can undermine even the most carefully thought-out exit plans:
- Your successor’s personal circumstances change so they can no longer take over. Maybe their spouse is diagnosed with cancer, maybe they decide to move to take care of their aging parents – any number of things could happen.
While you may not be able to totally prevent this, there are things you can do to protect yourself. If nothing else, you should at least have some ideas for plan B – possible alternative successors, companies that may want to buy you out, etc.
- Your successor fails at leading your business. No matter how well someone knows your business, it’s impossible to understand everything that goes into running it until you’re actually running it.
Consider the difference between Steve Spagnuolo, the defensive coordinator for the Kansas City Chiefs, and Andy Reid, the team’s head coach. Since 2019, Steve has managed a lot for the Chiefs – defensive line, linebackers, defensive backs – and the team has done quite well under his leadership, becoming Super Bowl Champions in 2020, 2023 and 2024.
But that doesn’t mean he’d make a great head coach – just ask the St. Louis Rams, where Steve served as head coach from 2009 to 2011. In those three seasons, the team went 1-15, 7-9, and 2-14. His first year, the Rams had the worst record in the league, and his last year they tied with the Colts for the worst.
Nothing against Steve. He may make a great head coach someday! But if you want to be Andy Reid, you need a deep understanding of both sides of the football – not just defense.
When your right-hand man steps into the top position someday, he or she will have to oversee everything, and that is something that should spur both you and your successor to take action.
As the owner/founder/CEO, so much of your business lives in your head that you have no idea how much of it you actually need to impart to someone else. You may think they understand everything, but in reality they just know their responsibilities really well.
So how can you expose them to the rest? Bring them into your decision-making while you’re still around. Give them areas to oversee. Let them handle the budget, for instance. Put them in charge of inventory.
Then, bring them into key client relationships. Most business leaders don’t think about it, but you are a big part of why your clients and customers work with you. When you leave, those relationships will become far less sticky if you don’t bring your successor(s) into them. If you prepare your internal team to take over but don’t take the time to transition those relationships, the clients may run.
Finally, invest in leadership coaching. You may have heard the phrase, “He’s a born leader.” That may be true for some people, but the transition from employee to boss is full of landmines. Getting a good leadership coach is like handing your successor a landmine detector.
As an added bonus, all this investment in continuity planning doubles as a great retention tool. Your key people are more likely to stick around when you show that you trust and believe in them.
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At Ellerbrock-Norris, we’ve been helping keep businesses safe for over 100 years. If you’re looking for an external advisor with experience helping small businesses effectively navigate risk, reach out today.
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