Despite the number of recent high
profile threats to businesses (E.g.:
Terrorism, extreme weather conditions,
petrol blockades), a worrying number of
businesses are failing to plan for the
effects of serious business
interruptions.
Research
produced for insurance company AXA shows
that 46% of SME’s do not have a business
continuity plan; this means
that over a million small businesses are
risking massive damage and even business
failure in the event of a serious
business
interruption.
Perhaps more surprisingly, 37% of senior
SME management admit to having relied on
luck when making an important
business decision; adding yet more
needless risk to their business.
The report also uncovers the four main
reasons why many SME owners do not make
business continuity
plans:
Insufficient Resources
– Assuming that you cannot afford the
costs or management time to make
continuity plans; often ignoring the
fact that a small cost now could prevent
a huge cost in the future.
Underestimating Impact
– Assuming that your business will be
able to survive a serious business
interruption, and that your customers
will tolerate any effect it has on your
operation.
Inefficient Scenario Planning
– Assuming that most problems caused by
business interruption are too small to
matter or too large to deal with; and
those in-between can be managed as they
happen.
Ineffective Prioritizing
– Assuming that if a crisis hasn’t
happened yet, it isn’t urgent enough to
plan for.
AXA Risk Control and Strategy Manager,
Douglas Barnett, says: “As the report
proves, too many of Britain’s SMEs bury
their heads in the sand when it comes to
continuity planning, assuming they can
deal with problems as and when they
arise. The stark fact that 40% of
businesses suffer a terminal failure as
a result of an incident proves that more
needs to be done.
“Continuity planning can be a simple,
practical measure whereby senior
managers ask a series of ‘What if’
questions, and for most businesses, the
only cost to the business will be their
time.”
Find out more about making an effective
Business Continuity and Disaster
Recovery Plan with our free article
here.
