On this week’s episode of the Managing Uncertainty Podcast, Bryghtpath Principal & CEO Bryan Strawser takes a look at small business continuity planning
Inspired by a question from Meg Cumby, in this episode we discuss the consequences of disruptions for small businesses, disaster recovery challenges, evaluating risks to your business, and small business continuity planning expectations.
Related Episodes & Blog Posts
- Episode #25: To BIA or not to BIA
- Episode #35: Alternate Workplace Strategies for Business Continuity
- Free Course: Business Continuity 101 Intro Course
Episode Transcript – Small Business Continuity Planning
Hi everyone, welcome to the Managing Uncertainty podcast.
This is Bryan Strawser, Principal and CEO at Bryghtpath.
On this week’s episode, we’ll be talking about small business planning and preparedness for disasters and disruptions. This is a topic that came up in a recent discussion on an online entrepreneur business owner forum that I’m a part of, and I asked for some questions that folks wanted to get answers to related to this topic, and my friend Meg Cumby had this specific question: What process should a small business, a one to five-person business, go through in order to evaluate and plan for disruption and disasters, and how often should you re-evaluate those risks or update your plans?
You can learn more about Meg and her business at megcumby.com. Her business is Meg Cumby Consulting: Where you can get client testimonials and case studies without the awkwardness.
So let’s take a look at Meg’s question and unpack this.
Certainly, a lot of our previous episodes have dealt with business continuity and crisis management planning and talking about enterprise risks really on a very large scale. We’ve talked about Fortune 500 organizations and the complexity of managing global operations and dealing with disasters and disruptions, but let’s bring this down to the small business level where you don’t have the resources and time to do the type of planning that a General Motors or a Merc or a 3M might have to do.
First, I think we can really simplify what we’re looking to plan around by looking at the consequences of disruptions that might impact the business.
And this is where I like to think about the four areas of consequence that happen when a disruption hits a business of any size, and those consequences are the loss of the team, the loss of the folks that do the work, the loss of the technology that the business is reliant upon, the loss of the facility that the work is conducted in … Where the work happens, in other words … and then finally, the loss of third-party services that you rely upon.
There’s another factor that can come into play with small businesses in terms of consequence, and that has to do with if you’re dependent upon a physical location because you are a restaurant or you are a small one- or two-location retail business, or you are a bar, for example. One of your dependencies that we can’t skip over is the need to have … the ability to reach the business. So you think about disruptions to transportation or lack of parking or lack of transit all suddenly become issues in those situations because you’re not able to reach the business.
Just this morning on the StarTribune … The Twin Cities newspaper, or one of the Twin Cities newspapers here in Minnesota … one of the more famed bars in Minneapolis is closing because they’re losing their parking lot. The parking lot is actually owned by the city of Minneapolis, and the city is taking the parking lot away from the business. They’ve been operating on this handshake agreement for years, apparently. They’re taking the parking lot in order to have a staging area for construction of a new rail line, a light rail transit line that’s being built here. And so the business is losing their parking lot, and because they’re losing their parking lot, they’re going to lose their customer base, because no one will be able to reach the bar and music venue that they operate, so they’re closing in a few weeks.
So that’s a dependency that we want to make sure that we’re thinking about when it comes to small business planning.
Let’s unpack the consequences a little bit about how to plan for some of these disruptions.
We’ll start with facilities. For a small business owner, the facility that the work gets done in might be their home. It could be, as it is for us … We have a single office location in Shoreview, Minnesota. And so I could lose the facility in a catastrophe. There could be a fire, we could have a flood, we could have an aircraft crash onto the building, we could have a tornado come through, so you think about all of these ways that it could happen. The bottom line is I may not be able to operate the facility. But I could also have other issues that cause me to not be able to work at the facility. I could lose power, and I may not have a generator. I could lose internet access, in which case I need to …
What’s my workaround, or am I just dead in the water, and I have to consider working from home or something similar? But that loss of facility or the inability to work at the facility because of some time of disruption – utility, natural disaster, power – that’s one area that you want to consider and then build plans around.
The second area is about the folks that do the work. For a lot of small business owners, that might just be you. It might just be the one person who does the work. It’s a one-person business. So if you lose yourself, if you’ve been injured fatally, obviously you’re not going to be able or really care about what happens next, because you’ll be deceased. But what if you’re injured and you’re not able to work?
And this is where I think the insurance situation comes to play. You’re looking at disability or some type of business owner insurance that contains coverage for that type of catastrophe that might impact you.
If you’re a larger business, and there’s four or five of you … And that’s our situation here at Bryghtpath; there’s five of us … losing one employee means that I either have to hire another one or I can outsource some work to a contractor in the short-term. But there’s a ramp-up period, and hiring somebody might take me two months to fill the position and six months to train them appropriately. So those are considerations I have to think about.
This happened to us here at Bryghtpath in 2018. One of our consultants is in the Minnesota National Guard. She was activated for active duty and has been deployed for most of the last 13 months. So we had some warning. We had about 12 weeks, I think it was. We were planning on hiring another individual, so we just accelerated those plans, and the timing happened to work out for us, but that could have taken much longer in order to fill that role.
The third area, consequence, that we want to plan for is around disruption to technologies that you’re using for your business. So there’s a lot of things that can come into play here. There is the aspect of losing hardware. So perhaps you have one laptop that you use, and that’s your principal computing machine, and that’s what most of the business runs on. So lots of questions: back-up strategy, access to another machine, a back-up machine that you have available on-site, multiple back-up methods for the data that’s on your laptop. And the list goes on.
You may have a website. How is that website backed up, and what if your website provider goes down? What if your data is lost? How do you restore that and move to an alternate?
And then if you’re a highly-dependent e-commerce business, or you’ve got an online digital learning business where you’re very dependent upon that technology for your income, then I think you want to have a more complex back-up and high-availability infrastructure in place, even if it’s just you. Because you’re highly dependent upon that to be in place in order to operate your business. So there’s a lot of things to consider there. We would want to see … In a larger business, we would be making plans around dealing with those disruptions. At the same time, I think in a smaller business it’s not a bad idea to have some of that planning for recovering your website or recovering the app that is at the heart of your business or the digital course platform that’s at the heart of your business, and being able to cover that when there’s a disruption.
The last area that we plan for is the loss of third-party services, and this is where … And some of this may overlap with some of the technology components. When you’re outsourcing part of what you do to a third-party firm, or you’re using a software as a service, like …
Think about your email provider. You might be on Mailchimp or Drip or ConvertKit or Infusionsoft or something else. What you’re really looking for here is what is that service level agreement that you have in place with them? What happens if you have to move and take your data? So are you regularly downloading your data? What if their business model changes?
For example, we use Drip, and we’re very happy with Drip as a mail service provider and marketing automation. But Drip’s changed their focused more recently towards e-commerce businesses, maybe away from some types of businesses they worked with before, and there have been some occasional performance issues now that didn’t exist previously. A lot of folks have been switching providers. So what happens if that core part of your business changes, that core provider for your business changes and perhaps no longer delivers what you want? Are you able to make that shift?
So when we think about consequences that would disrupt your business and how you should plan for those, those are the four areas that we’d encourage you to think about. And then if you’re a brick-and-mortar business or if you’re dependent upon folks having access to your business physically, then that transportation, parking, and transit situation comes into play.
We would encourage folks to re-evaluate those risks regularly. I think I would encourage folks to look at it in two ways. On a calendar basis, at least once a year, I would dig into where are things at. Has anything changed? Do we need to re-evaluate anything? I would do that at least on an annual basis, but second, I would re-evaluate and update my plan any time there was a significant change in the business or in that infrastructure and environment that surrounds your business.
For example, if you change hosting providers for your website, you should re-evaluate your plan around that area and make sure that your documentation that you have chosen to document is current and that you feel like you have good procedures in place to recover if there is some type of disruption.
We’ll make this real a little bit by just talking about how we plan for some things here at Bryghtpath.
As I said, we have a five-person firm. All of our employees are local, but two of them regularly work from home, as they’re about 45 minutes or so from the office. Our office is a standalone building that we share with a sub-tenant of ours, a classmate of mine from business school who runs his business out of here as well. And so we’ve identified some risks. We’re very dependent upon having electrical power. We do not have a generator for the building. We’ve chosen not to do so because I live within seven minutes of the office here. That office is on a different power grid than my home, so I’d be able to go home and work from there.
We are highly dependent upon the internet. This is a place where we have decided to make an investment. We have two different internet providers coming into the office. We have a business cable internet connection and we have business DSL, and then we have a router and load balancer that smartly decides how to route that traffic coming into the building. So we’ve chosen to have some redundancy in place because of the risk with that. And we also have the ability to use hotspots and some other things on a temporary basis. We don’t need a whole lot of bandwidth, except when we’re doing video broadcasts and that kind of thing from the office here.
From a technology standpoint, we are highly dependent upon a number of different cloud-based technologies, and plus our website hosting, so we have some plans in place around portability of data, monitoring of the website, alerting when the website’s down and those kinds of things, so that we can take action as appropriate when those things happen. And then the unknown risk, or the unknown … We don’t really have a plan is what I’m trying to say … For when we …
If we were to lose an employee, that would be a pretty significant issue for us. We would need to make some plans pretty quickly in how to deal with that. But we are properly insured, at least for my wife and I as the owners of the business and the two principal employees in case we have some kind of injury that prevents us from working or … We’re also properly insured if one of us should have a … Should be killed or deceased to be able to protect the business.
And then lastly, we have a succession plan. We know if something were to happen to me as the leader of the business, we know what our moves would be at that point for my wife to deal with the business and vice-versa. We just know what we would do because we’ve kind of planned and talked through that appropriately.
So those are some ideas about looking at small business planning for a one- to five-person business. Again, my thanks to my friend Meg Cumby from Canada. Her business, Meg Cumby Consulting, who gave us the question for today’s episode of the Managing Uncertainty podcast. And you can learn more about Meg and her business offerings at megcumby.com. Again, you can get client testimonials and case studies without the awkwardness through Meg Cumby.
Thanks again, everyone, and we will talk with you next week.