Business Continuity As A Marketplace Advantage

Business continuity planning and similar preparedness efforts are often seen as either unrelated to the business plan or at best, a necessary evil. Those businesses that do have a plan seldom review it for consistency with the current state of the business. A plan written three years ago is likely incompatible with the existing business.

The reality is that business continuity is a strategic investment that helps a business stay competitive, even in the face of temporary disruption. Some quick facts provided by the Houston Area Research Center:

• 35 - 40% of businesses disrupted by a disaster without a continuity plan never reopen
• 5 year average of US disaster losses is 2.5 billion (pre Katrina)
• According to the Houston Area Research Center Every dollar spent on disaster preparedness saves 7 dollars in recovering disaster related economic losses
• The rate of occurrence of natural disasters has increased by 40 % in the last 15 years

We know for a certainty that every business will face some form of disaster at some time. Those businesses who have prepared will be in a much better position to prevent a serious disruption of their operations. Additionally, those prepared businesses will be able to recover in a more cost-efficient, timely manner because much of the initial recovery requirements and resources have already been identified. This means that those businesses that can recover faster will attract more customers and draw business away from a competitor who has not resumed operations. This can have far-reaching consequences for an unprepared business, beyond just the loss of real dollars. Potential future sales lost and even a negative perception by customers can all lead to loss of market share. Often market share loss can be many times greater in value than the actual real dollars. Conversely, a well-prepared company with a business continuity plan may have some additional benefits:

• Increased Investor Confidence
• Favorable public opinion
• Better insurance rates
• Better loan rates
• Higher customer loyalty (you were there when your customers needed you)
• More efficient recovery means lower cost due to fewer wasted dollars
• Better employee loyalty (you cared enough to help them prepare)
• Reduce financial and legal liabilities

A business with a healthy business continuity plan and program to support it will have a decisive advantage over an unprepared rival in the competitive marketplace. Disasters create opportunity for those who are prepared.