Creating a business continuity plan may protect your company from disruptions and keep operations running smoothly during and after a major event.
- A business continuity plan (BCP) helps your company prepare for and recover from unexpected disruptions such as natural disasters or cyberattacks.
- A well-developed continuity plan helps remove the guesswork from responding to unexpected events.
- The five key components of a BCP include risk assessment, impact analysis, recovery strategies, training, and continuous improvement.
- Understanding your business’s recovery time and recovery point objectives enables faster, more efficient responses.
- Testing and revising your plan regularly can strengthen resilience and reduce downtime.
No matter how much news you watch, how much data you process, or how much you prepare, sometimes things happen. In a crisis, even a few days or hours of downtime may have lasting consequences. However, a specific type of plan may provide a way to respond and recover quickly so operations continue with minimal interruption. Here's what you need to know about business continuity plans.
Understand the Building Blocks of a Business Continuity Plan
Before you can design your BCP, it helps to know what it entails.
What is a Business Continuity Plan and Why it Matters
A business continuity plan outlines the procedures, resources, and communication strategies your business will use to maintain essential functions during an emergency. But it goes beyond simple recovery or disaster mitigation. It's a comprehensive documentation of roles, critical systems, and recovery steps to help safeguard your employees, customers, and brand reputation.
Key Components: The 4 Ps and 5 Pillars Demystified
Experts often describe business continuity plans in terms of the 4 Ps or the 5 Pillars. Both are frameworks for development, but each focuses on slightly different aspects of the process.
The 4 Ps focus on protecting the core components of the business, both during and after the disruption:
- People: Employee safety, communication, and succession plans for critical roles
- Processes: Operational workflows, revenue generation, and customer service processes
- Premises: Physical spaces and other assets of the business, property damage mitigation, and the process path to return to normal operations
- Providers: Third-party vendors, external partners, and other suppliers with the intent to create resilience in your supply chain
The 5 Pillars focus instead on the lifecycle of continuity planning:
- Risk assessment and analysis: The "prevention" part of the plan, handling the identification of potential disruptions and their effects
- Strategy development: The "preparedness" aspect, or what the business will do to maintain and restore operations
- Plan documentation: The formal response, documented into clear steps and roles
- Implementation: How recovery will happen once the disaster has happened
- Testing and maintenance: Review of the plan both in real situations and in a testing environment so that the plan adapts and continually improves
Considering your business continuity from each of these angles may help you create a more comprehensive plan that covers all angles.
Common Types of Disruptions and Their Business Impact
Not all disruptions are large-scale disasters. Those are part of your BCP, but other types of disruptions also may pop up.
1. Technology and Cyber Incidents
The World Economic Forum's 2025 Cybersecurity Outlook highlighted just how complex the cybersecurity landscape has become.[1] Supply chains are the leading risk, while the introduction of AI has introduced new vulnerabilities. These incidents cost companies millions each year.
Planning for cybersecurity and technology disruptions involves both precautions before the incident — think firewalls, multi-factor authentication, and data encryption — and the process for after an incident occurs.
2. Natural and Environmental Events
Severe weather events such as hurricanes or snowstorms may disrupt supply chains and knock power grids out for days, but even minor power outages may affect point-of-sale systems or endanger climate-controlled inventory.
Temporary fixes for both utilities and space challenges may help. Alternate power supply systems might fill a gap until the power comes back on, or designing a system that works without power may also help. Additionally, considering alternative spaces where you can store inventory, conduct deliveries and customer pickups, or safely store inventory may mitigate the effects of natural events.
3. Supply Chain and Vendor Disruptions
Even small businesses work through a complex network of suppliers. Businesses that have just one supplier must also rely on that supplier's third-party chain, and if one link fails, the company may experience cascading challenges. Labor shortages or strikes, transportation delays, and the effects of other events from this list (such as environmental events affecting the original supply) may all factor in.
Diversifying suppliers might provide additional security against disruptions in a supply chain, but a clearer focus on how to manage inventory may also help.
4. Operational and Equipment Failures
Critical machinery or system malfunctions may delay production or service delivery. For example, a refrigeration unit breakdown in a restaurant or a server failure at an IT firm might halt operations entirely. Routine maintenance and equipment monitoring may prevent some of these costly interruptions.
Predictive maintenance tools may also provide ways to manage equipment and operational failures. As part of the BCP, scheduling maintenance before failures and monitoring performance might provide critical context in deciding the next steps during an event.
5. Human and Workforce Factors
Sometimes, it's difficult to see that everything hinges on the knowledge and expertise of one or two employees, especially in small business operations. However, leadership transitions and loss of key knowledge may also slow decision-making. Further, employee illness, unexpected turnover, or, in the bigger picture, labor disputes may lead to sudden staffing shortages.
Cross-training employees and establishing clear succession planning may help ensure continuity because it provides a backup to critical knowledge. It also helps to know how to route customer inquiries and task management without minimal delay because that speed might preserve customer goodwill.
6. Public Health and Societal Crises
The disruption of the COVID-19 pandemic brought many small businesses to the brink of closure. There was no way to know that a simple two-week quarantine to flatten the curve would stretch on for many months. Events like pandemics, civil unrest, or large-scale economic or transportation disruptions may impact employee safety and customer accessibility.
A BCP may include communication plans for these disruptions. It also outlines flexible work or even remote protocols that allow the business to run during periods of time when it's difficult to bring everyone into the building.
7. Financial or Regulatory Changes
Economic downturns may affect interest rates on variable-rate business loans or potential new loans for expansion. New compliance requirements might cause accelerated timelines for upgrades or force operational adjustments that strain business savings.
A BCP might include modeling how these changes would impact business revenue and then documenting procedures to help maintain liquidity. For example, the business may take out a business line of credit or determine staffing and expense procedures. It may also be helpful to review contract processes to accommodate easier changes in the event of financial disruption.
Simple Steps To Develop Your Business Continuity Plan
Now that you understand the frameworks and potential types of disruption, the next step is building your plan.
Step 1: Conduct a Business Impact Analysis (BIA)
In several of the types of disruption above, we mentioned modeling how that particular disruption might affect your business. A business impact analysis does just that. The BIA identifies potential disruptions and outlines the possible consequences on various aspects of operations and cash flow.
The first part of this process is identifying critical functions. What business processes are the most important for keeping the business running during a disruption? Which ones may be altered or relaxed to allow essential functions of business to continue as smoothly as possible? You might also consider these questions from multiple perspectives, not just revenue. For example, how will disruptions affect customer and employee morale?
Step 2: Perform a Risk Assessment
Next is assessing impacts. How will different types of disruptions affect operations, including from a financial, reputation, or legal standpoint? You might evaluate the likelihood and severity of each risk, assign risk ratings, and develop mitigation strategies, such as data backups or alternate suppliers.
Identifying the foundational pieces that keep the business going may make it easier to then identify what could threaten those processes. This may help ground your plan in reality while also providing enough consideration to encompass a broader range of disruption.
It may also offer a clearer picture if you analyze dependencies. What secondary systems and processes support those critical functions? How can you balance their function with prioritizing funding and operations for critical ones?
Step 3: Define Recovery Objectives (RTO and RPO)
Once you have identified critical objectives and assessed how they might be affected by any kind of disruption, you may begin prioritizing recovery efforts. There are two key measures to help guide and assess recovery planning:
- Recovery Time Objective (RTO): The maximum acceptable time your business may be down
- Recovery Point Objective (RPO): The maximum data loss you may tolerate, from the time a disruptive event happens to the last good backup
For example, if your business data changes daily, a backup from last week might be disastrous. Downtime of more than a day might end business processes for good. A recovery plan may help determine what sort of timeline your business may be able to weather so that you don't accidentally cross that threshold and cause more damage.
Step 4: Develop Response and Recovery Procedures
Now that you've followed all the steps, you may begin informing your recovery plans. How do you put all this information together into a logical, clear-to-follow plan that employees and leadership may refer to in the event of small or large disruptions?
This is where the plan becomes actionable. Include communications, instructions for resetting and restoring important data and operations, and contact lists for both suppliers and critical team members. It may help to have a digital and physical copy to cover different types of disruptions.
Step 5: Assign Roles and Train Team Members
If a disaster happens, getting the plan in motion in a timely manner may help prevent the worst damage. It might help the timely implementation to assign roles and responsibilities early so that you have time to inform those team members and provide any necessary training.
Strengthen Resilience with Proactive Measures
A continuity plan is a living document. It grows with your business and changes as the threat landscape does. Proactive strategies may provide a way to maintain a clear continuity plan without becoming too rigid to apply it in the future.
Maintaining Agility Through Testing and Continuous Improvement
Having your BCP worked out on paper is the first step, but it's challenging to know if it covers everything unless there's a disruption. You may be able to help stress test the plan without the full effects of a disaster event by testing it first. Simulating disruptions reveals weak spots before they become real problems. After each test or actual event, review your plan to incorporate lessons learned.
Often, the goal is continuous improvement, rather than a perfect plan through research. Once you establish your foundations and do the work of answering each component of the plan, having time to test and subsequently improve may provide better results in the event of a real disruption.
Frequently Asked Questions: Clearing Up Business Continuity Confusion
Let's clarify some common terms and standards to help refine your approach.
What Are the Five Components of a Business Continuity Plan?
While frameworks may vary depending on your source, a comprehensive business continuity plan generally includes five core components:
- Governance and roles: Defining ownership and responsibilities
- Risk assessment and business impact analysis: Identifying threats and critical functions
- Strategy development: Outlining approaches to maintain or restore operations
- Plan implementation and documentation: Creating procedures, communication steps, and resource lists
- Testing and continuous improvement: Reviewing performance and updating the plan regularly
What Is in a Business Continuity Plan?
A business continuity plan is a framework for weathering disruptions by using a predefined set of action steps. It identifies core business processes, assigns key roles, and provides a clear pathway during and after the disruption to maintain operations and reopen the business. Its biggest benefit is that it doesn't rely on gut decisions made in the moment, but on a proactive and strategic plan created with careful thought before something goes wrong.
What Are BCP Standards?
Many organizations reference standardized frameworks such as ISO 22301 from the International Organization for Standardization.[2] This framework provides explicit guidance on assessing business risks, developing continuity strategies, implementing controls, and reviewing performance. Industry-specific regulations or regional guidance may also apply, but ISO 22301 remains the most widely recognized benchmark for continuity planning.
Resilience Starts with Planning Ahead
A business continuity plan offers a different pathway than reactionary choices once a disruption hits. A documented, well-researched plan provides your team members with clear steps for maintaining business operations as much as possible and removes the guesswork from roles and communication. Once this is in place, it offers the business a way to mitigate the effects of unplanned challenges and may allow the company to recover well and with dignity.
