Business Continuity- Building a More Resilient Business

Business continuity planning is often associated with worst-case scenarios: cyberattacks, natural disasters, loss of building access, utility failures or the unexpected departure of a key employee.

Preparing for those events is important. But business continuity planning can serve another purpose.

Done thoughtfully, it can help an owner identify weaknesses, strengthen business processes and potentially create a company that is more resilient, repeatable and transferable.

Moving Beyond a Crisis Checklist

It can be tempting to approach disaster recovery as a checklist of unlikely events.

What happens if the building becomes inaccessible? What happens after a cyberattack? What if a key employee suddenly leaves?

Those are useful questions, but focusing exclusively on recovery can overlook the broader value of the planning process.

Business continuity planning requires owners to identify where their companies are vulnerable and determine how operations could continue if one of those vulnerabilities becomes a problem.

That exercise can reveal issues worth addressing even if a disaster never occurs.

Building Confidence in the Business

A company that has thought carefully about continuity may provide greater confidence to the people who depend on it.

Customers may want to know that service can continue during a disruption. Vendors and lenders may value operational stability. A potential buyer may view documented processes and contingency planning as evidence of a more sustainable company.

In that sense, continuity planning can contribute to characteristics that support long-term business value.

Creating More Repeatable Processes

One of the benefits of continuity planning is that it encourages owners to anticipate potential pressure points.

What happens if a key employee is unavailable? How dependent is the company on one customer or vendor? Which processes exist primarily in one person’s head?

Answering those questions often requires documenting how important activities are performed.

Documentation can make those processes more repeatable and reduce reliance on individual people—including the owner.

That can strengthen day-to-day operations while also contributing to a company’s ability to operate successfully under future leadership.

Connecting Continuity With Transferability

For many owners, an eventual goal is to build a company that can continue operating without them.

Business continuity planning supports that objective by identifying areas where the company remains overly dependent on a particular person, relationship or process.

Addressing those vulnerabilities can help create a company that is more scalable, recoverable and resilient.

Viewed this way, continuity planning becomes more than an expense associated with preparing for a crisis. It can be an investment in the company’s future transferability.

Starting With What Is Most Fragile

A comprehensive continuity plan can feel overwhelming, particularly for an owner who has not previously focused on the issue.

It does not necessarily have to begin with every possible scenario.

Instead, consider identifying two or three areas of the business that would create the greatest difficulty if they suddenly disappeared.

That might be a key employee, an important vendor or a critical process that depends heavily on the owner. Then consider how the business would respond, what needs to be documented and what steps could help preserve operations and cash flow during a disruption.

Starting with the company’s most fragile areas can begin building the resilience, repeatability and credibility that contribute to long-term value.

Business continuity planning cannot eliminate disruption. But it can help create a business that is better prepared to absorb it—and potentially a stronger business even when the disruption never arrives.

This article is based on an EP Wealth Insights podcast episode about the strategic value of business continuity planning, from EP Wealth Advisors.

EP Wealth Insights Podcast Disclosure

The speakers featured in this podcast are employees and/or Investment Adviser Representatives of EP Wealth Advisors. The information discussed is provided for educational and informational purposes only and should not be considered personalized investment, financial, tax, or legal advice.

The views expressed are those of the speakers as of the recording date and are subject to change. Investing involves risk, including the possible loss of principal, and past performance does not guarantee future results.

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