Recent man-made and natural disasters, including terrorist attacks, the Indian Ocean tsunami and the threat of pandemic flu, all serve to highlight the critical need for public and commercial organisations alike to address Business Continuity Planning (BCP). While the UK Government’s Civil Contingencies Act stipulates the requirement for thorough Business Continuity Management (BCM), and the new BSI standard (BS25999) will support the process of implementing best practice, it will not overcome some of the implicit major BCP issues. Arguably the most significant of these is understanding complexity – comprehending the interdependencies and interactions that define the business-critical processes of modern organisations; ensuring stakeholders are fully trained and aware of their roles and responsibilities, and managing the myriad of policies that directs your BCP.

Effective BCP must be informed by a clear understanding of the critical processes that an organisation must conduct in order to achieve its business aims and key supporting objectives. To ensure processes are adequately protected, Business Continuity planners must have a clear and comprehensive understanding of all business-critical elements in the organisation, including their relationships, inter-dependencies and relative priority/criticality to the business, so risks can be identified, assessed and appropriately planned for. Incomplete Business Continuity Analysis would leave the organisation vulnerable to a critical failure.

The main purpose of BCM is to develop the ability to continue your business-critical activities in the event of a pre-defined disaster scenario occurring. It is essential, therefore, to ensure that your organisation has an effective BCP in place and that any critical third party suppliers also have adequate BCPs to ensure continuation of service to a defined (probably reduced) Service Level Agreement. Once you have addressed the potential threats to your own organisation, you do not want suppliers representing weak links in you Business Continuity ‘chain’.

Without a clear understanding of what your business-critical processes are, or the ability to easily identify the systems, infrastructure elements and people upon which these processes depend, how can you assess how a particular threat will impact them? If you cannot be confident that you have fully understood these areas, how can you be sure that you have not overlooked a business-critical element in your planning process and, therefore, that the Business Continuity and Disaster Recovery plans you have developed will be truly effective? The answer is you can’t!

Enterprise Modelling (EM) is now a recognised technique for making complexity more understandable, by generating an exploitable model of your organisation’s ‘business-critical architecture’. It provides a clear and understandable structured graphical visualisation, enhanced by supporting textual information, of the vital business interactions of your critical staff, assets and processes, the risks that threaten them, and the plans that can be brought to bear to protect them. This will facilitate identification, analysis and understanding of the business-critical aspects of the organisation, and the relationships and dependencies that exist between them. EM can also support incident management and what-if scenario analysis, and help identify BCM training needs and how they are delivered.

A further valuable by-product of using the EM approach is, in taking a group-wide view of all business-critical aspects, EM will identify any key areas of vulnerability, as well as anomalies or duplications of effort, which, once rectified, will improve efficiency.

There is no point spending all the time, effort and cost developing a BCP unless it is effectively communicated to employees, key partners and suppliers, and possibly customers. BCM and BCP are therefore not one-off processes; plans must be distributed to all relevant parties, be read and understood by them, be readily available and practiced at appropriate intervals, and kept up-to-date and relevant to the business.

While responsibility for Business Continuity should lie at all levels within an organisation, ultimate responsibility for protecting shareholder value and the future viability of the organisation lies with the Board of Management. The Board must demonstrate that its Business Continuity and Disaster Recovery plans are properly managed, i.e., distributed, practiced on a regular basis and finally, maintained as relevant to the business as it changes.

The threats posed by humans and nature are ever with us and, some would say, increasing. In order to counter this, in-depth Business Continuity Planning and Management will be critical. Underpinning these plans with Enterprise Modelling can deliver a comprehensive, accurate and coherent model of an organisation’s business-critical elements, and enable managers to produce more effective BCP and more easily identify and address specific areas in both crisis and normal operations.

The addition of a computer-based Policy Management System automates the distribution and tracking of your BCM policy and plans, and further, provides the Board with demonstrable evidence that they are paying due heed to Corporate Governance and Compliance.

VEGA Group works with various companies across different industries, advising on Business Continuity Planning and Management.



By: Martin Mcallister

About the Author:

Any business faces minor down times and major unknowns. It is important therefore that contingencies are built into the business processes to ensure that important information is protected in the event of a planned or unplanned closure of the business. It has once been said that any investment into a Business Continuity Program (BCP) is a waste of valuable resources. And it is true that if a strict ROI calculation is attributed to such a program it is likely that it would not provide a sufficient justification for such an investment. However, anybody who has experienced a cessation of business activity will know that not having a BCP spells disaster and in fact it is a small cost to bear in relationship to the losses the business incurs during such an event.

Our recent history is filled with events that “were unthinkable” but that actually happened and which are all reminders that a BCP should not be disregarded. It is an accepted fact that following a major fire almost half of businesses fail to reopen and then close to a third of those that do reopen do not survive beyond three years. Those are everyday examples and the list could easily go on and on building up an unassailable argument for a BCP.

There are also smaller scale events where because of the temporary nature of the business interruption there is no life threatening effect on the business but the amount of time spent recovering lost information can be seriously distracting and in many instances where the information is permanently lost it can lead to severe problems for the people or organisations affected by such a loss. All distractions however small create a cost to the business as they take away resources from normal business activities and lead to increased overtime, more defects (which have to be fixed at a cost) or simply greater stress which means lower staff efficiency.

A BCP is ultimately a simple methodology for identifying areas of risk, creating contingencies, assigning responsibilities, communicating its benefits to the organisation and then following up with regular audits and live tests. But as in any aspect of a business’s activities it needs the commitment of senior management and staff for its processes and disciplines to be effectively embedded into the organisation.

While, this article does not go into the subject of how to construct a BCP, it does, as the title suggests, describe how a hosted software product can be used by an organisation as part of its business continuity contingency.

The definition of a hosted arrangement is one that is held as a guest by a third party. This means that the third party not only holds the hardware and software on behalf of the client but also takes care of maintaining both the hardware and software as well. In the specific case of a hosted software the product is owned, hosted and managed by the organisation that developed it and is then rented out from its hosted location for specific periods of time to a number of different companies. The hosting location is always remote from the business locations of the clients and the software product is accessible over an Internet connection. This provides a dual benefit of operating from a remote location that is protected from any event that could happen to a client’s business location while at the same time being able to be accessed from any PC and from any location, whether primary or alternative, with an Internet connection.

An example of a specific instance would be helpful at this stage. Company A operates from a single location with its offices, manufacturing and distribution in the same building. A small fire in the plant sets off the sprinkler system in the entire site and the fire’s spread is restricted and quickly put out. The damage is limited to the factory and it is quickly cleaned and is up and running again within a couple of hours. However, the damage from the sprinklers in the offices is substantial and all electronic equipment is permanently damaged and the storage disks are corrupted and it is not certain that anything can be recovered from them. However, the company used a hosted software to run its quality systems and its customer management with the data being held at the hosting location. So with the help of a new PC, an existing live broadband connection and a new printer, Company A was able to access its account and retrieve its orders, print out its latest production procedures from its quality system and have the factory starting production on outstanding customer orders as soon as it had been cleaned up from the fire. There obviously could have been some mitigating measures that should have been installed prior to the incident such as different sprinkler systems in the offices and the factory and a gas based extinguisher for the electronic equipment but the management was not willing to accept the extra expense at the time.

As an observation Company A was able to reduce its downtime because it had systems and procedures in place to enable it to recover key information far quicker than had it disregarded such contingencies and taken the attitude that “it would never happen to us”. Clearly, the hosted software product at a remote location with its standard back-up models combined with its Internet connectivity had an important role to play in Company A’s business interruption contingencies.

But let us not forget that a hosted application also provides a cost effective alternative to a standard client server application while at the same time having the structure for protecting against the unexpected.



By: Christopher Stainow

About the Author:

Business continuity means to continue your business normally even if there have been natural disruptions, crisis or even natural calamity. It simply means planning a system that greatly helps your business continue and grow even after the toughest of conditions which further prevents any probable disaster. Now-a-days our life and the environmental conditions in which we live is just unpredictable and due to natural calamities like floods, earthquakes, tsunami etc, or man-made disasters like terrorists attacks, bombing etc. are ruining and destroying our Mother Nature. These problems have become quite common and after a period when everything returns back to normal we often wonder if we can successfully continue our business operations as before. Due to these enormous natural and man-made calamities, the first thing that is seriously affected is the Internet and our connection across the world due to Internet. This causes terrible loss to businesses and humankind. In order to prevent such a situation where you really become helpless and start loosing hopes, it is sensible to schedule a perfect and effective business plan. You need to plan the resources wisely and take proactive measures so as to help your business survive and flourish as ever before and this can be done by having a lot of communication channels for establishing communication as soon as possible after the disaster. Secondly, the company should plan sensibly to save and secure the important data that may be lost during such crisis, for this you need to have an effective data backup that collects, compresses and encrypts the information and other important files from your computers and servers and sends it to some other remote server of the backup provider companies. The encrypted data can be restored by you any time you need and your information is not only saved but also secured to the extent that even the company employees can not access it. And if your business continuity plans are really clear and effective, it helps you to cope up even in the worst of cases like death and this actually helps to decrease potential losses if any. Always remember, a perfect business continuity plan not only saves your business from huge financial losses but also helps your family to survive whom you might leave behind. If you face a business crisis it is not only you who has to suffer the losses but it also affects your customers too as you are unable to meet their requirements on time. Otherwise think of an alternative supplier who can satisfy your customers’ till your business settles down after the disaster. This is not the end, your suppliers also face a tremendous loss as you could be one of their largest customers. Thus, it affects the entire business chain so it is necessary to think and plan an effective business continuity system. By creating an effective business continuity plan, the manager will analyze some critical portions of your business and come out with an amazing solution. Both proactive as well as reactive plans and help you to prevent any predictable disasters that may arise due to natural or man-made reasons. A successful business is the one that is able to survive and prosper even after passing through difficult situations and the success lies in a perfect business continuity plans and procedures.



By: jamiehanson

About the Author:

Entering the computer age, a disaster recovery plan was a concept and not much else. The idea was that a plan would be in place for the day when things went wrong. This worked at the time when computers in world numbered in the 100′s – there were not more computers than people in an office.

Organizations got bigger and computer departments were suddenly as big as the sales department, more IT consultants were bringing in more hardware and software and no one really noticed the day that computers had a greater value than the people in the office.

In that first phase when there was a mainframe, a form of backup was done on a regular basis, the backed up material was moved to a safe location and the idea was that if the mainframe went down, then spare time could be used on a different mainframe in a different location.

Now a 50 person office has 75 computers; at least.

Now there is a complex telephone system that is just a little gray box with some wires coming out of it, and no one cares what it does because it works.

All those little wires pass through a closet that was originally built just for the wires, but hey, with the space issues this company has we may as well stock paper in the closet; or the corrosive cleaning material.

The main frame is gone and instead of having one machine running everything important we have a lot of little computers each running a little task that collectively replaced the main frame.

Imagine; that mainframe used to do 50 tasks and now those tasks are spread out over 50 different PCs. Everything works because the computer kid set it all up. Then he has a falling out with his girlfriend, the secretary. Better for him, he got accepted into University 200 miles away on an athletic scholarship. Or, his parking is taken away because of some reason that made sense to the decision maker. For whatever reason he is no longer in the company and things run just fine.

What is the expression; things run just fine until they don’t?

Suddenly the person that left is understood to be the most important person in the company, because things either slowly stop, or just drop dead. If the computer guy left in a bad mood and in a hurry he could have just switched some cables. If he had time he could have programmed your data based to erased itself after running a backup (and he set the backup to not save anything).

Your phone lines can be switched so all calls go to the lunch room, or the presidents office or just randomly to different extensions. Most expensive scenario, all inbound called are forwarded to another country. Worst scenario, all inbound sales calls are sent to your competition.

The Business Continuity Plans and Disaster Recovery plan is not something sold “one size fits all” and in fact almost all plans fail because of the impossibility to consider all the possible aspects of future failure and issues.

This is no longer the beginning of the computer age, and a disaster recover plan must be part of your business plan. I should not say it here, but an acceptable option at Managing Director level is to not have a plan because of any number of reasons, but a decision must be made.

The idea behind a modern Disaster Recovery plan is the Business Continuity aspect. When things go wrong, and they will, business must continue as close to normal while an effort is made to return the office to normal.



By: Cindy King

About the Author:

Adapting your business to a foreign country’s culture, is not an easy process the first time you try. You will not be able to anticipate the stumbling blocks that would not happen ‘back hone’. More importantly you will not know what you need to do to adapt yourself to the new challenges and tasks at hand. You will need to develop a Small Business Action Plan for your first effort with International Business Development.



Are you a small business and want to develop your international business?

Do you have a limited budget to develop your international sales?

Do you already have domestic clients but are just starting to reach out to international clients?



There are numerous strategies that exist to get you more international clients. A lot depends on your business and your commitment.

Here is an action plan to start your first international business development strategy:

1. Internationalize your website

It is important to make sure your website is not pushing your international visitors away from you. Bad or non-existent cross cultural communication can easily do this.

You can create a website specifically targeting an international audience, in your language. This is a business decision and will depend on the nature of your business and your clients. Companies in non-English speaking countries will often create an English language website specifically to target their international markets.

You may decide to keep your main website targeted to your domestic clients. There are still ways to tweak your website, with very small touches, to give a better experience for your international readers. Have a translation tool on your website. The online translation tools are far from perfect but they do bring your clients that one extra step closer.

2. Research your international markets

International business development is all about you learning to adapt. Adapt your business, your products, your communication, and your sales pitches, to each country you market to.

How do you start if you do not have any contact with your foreign markets? Use everything you have available to you and slowly build up your foreign market research. The beginning usually requires the most effort. It does not take as long as you expect.

If you are just starting out check out all of the associations, official groups for all international data you can find. Use the phone extensively. Do some online research. The goal is to simply become familiar, and feel comfortable, with your market. This is the time to eliminate all culturally inappropriate businesses.

The research that you do at the same time as you are marketing to your audience gives you the best results, but don’t get stuck spending too much time here.

3. Track visitors and results; adjust your communication

This step is very important. The better your analysis is, the stronger your international business potential will be.

Tracking and testing are key marketing tools. Your international communication is a process of testing, adjusting, inciting feedback and learning more about your audience. You have to be sure that you establish measurable goals before you begin testing. You must have a tracking system in place for your goals. And you must also track the responses your communication is having on your international readers. Remember, you can’t manage what you can’t measure.

International business development is all about your capacity to adjust your business to the needs of people in another country. In order to make these adjustments and improvement you must know where you start and how to interpret results. You need precise things to measure.

4. Create a newsletter in English targeted for your international clients and distribute by email and on your website.

Internet marketing today is all about creating an online presence through content. Internet readers actively search for content. Your international readers are the same. One major benefit of publishing a newsletter is it provides a platform for consistency.

A newsletter helps you to stimulate market feedback, with links back to your website and other content provided through different media. Links to audio and video files, quizzes, surveys, free reports and other feedback generating tools published or advertised in your newsletter create reader interaction.

A regular newsletter targeted to a broad international audience will not be as powerful as content marketing targeted to one specific culture. But it is an easy and inexpensive way to start if you have no real idea where you want to market to.

5. Include tools to stimulate feedback

There are tools you can use to stimulate feedback. Quizzes, surveys, polls, questions, homework assignments, and contests are some tools you can use to stimulate feedback.

The key is to find out what your target readers want and need the most. As you learn more about your international prospects you will adjust your feedback tools and enticements.

You can grab hold of your readers by offering free or discounting items that are not information products, discounts available only to your readers. You will have a better response rate if you can identify what your readers really want.

You can encourage readers to participate with you feedback generating tools by offering them free white papers, case studies, reports, guides and other information useful to your readers. If your feedback enticements are information products, you have another platform to use in your internet marketing strategy.

A wise use of different media touches linked to your feedback stimulation tools strengthens your internet marketing. These tools will take some planning and strategy to put in place.

6. Track results and adjust your communication

This is a repetition of step 3. Tracking your results and analyzing your international responses is an ongoing process. International marketing is all about taking things one step and a time and making adjustments along the way.

The two processes of internet marketing and international marketing can be combined right here in the tracking and adjustment. This is also how you can learn about your foreign markets even if you live thousands of miles away and you don’t speak the language. This combination can be powerful at very first phase of your international business development.

Internet marketing is all about adjusting your message real time. It is about being present online in real time. If your communication is outdated no one will listen to you. You need to adapt to your foreign markets. When you start out, you do not know much about them. You must continually check and adjust your communication.

7. Identify a country to target specifically

You will get better results from your international communication if it is targeted to very specific markets.

This means you need to identify a country as a target to market specifically to; and there is no real way to choose which country you should start with other than saying the country with the best potential for real sales. There is no magical formula for choosing the first international target market that works across all industries. Find a country where you can reasonably expect a good client base.

There are obvious cultural obstacles for certain types of businesses. So check with all of the appropriate domestic authorities. They will have good insights into what goes on in other countries. Check with your countries embassy in the country concerned.

You can also base your decision solely on data: export data, industry revenue. You can also base your decision on where your competition is located or not located or if they are considering entering into a market.

International business is all about changing your mindset. Choose a country and get started. The first learning curve is the hardest. So don’t be afraid, jump in and focus on the learning experience of getting to know your market in one foreign country.

8. Create either a blog or a country specific newsletter for that target country depending on your foreign market.

Now, once you have identified a specific country you want to target, you will need communication targeted to that culture. Custom content for one particular country, not old content repackaged.

A blog may be the easiest tool to get to know your target country. You can also do this with a newsletter published for one cultural audience. The important thing is to have customized content written for one cultural market.

There may be translation costs involved. A blog will probably cost you more than a simple monthly newsletter. But a newsletter can be repurposed into several different forms of customized content such as articles, emails.

If your communication is directly targeting one specific culture, you will get better results than with you broad international targeting. Having custom content in either a blog or a newsletter reaching out to one foreign country is your first real presence in a foreign market. And you do not have to have offices there.

9. Track results and adjust your communication.

OK. So now you have a real presence in your target country. Guess what you next step is?

Stimulate and entice feedback. Track results. Adjust your communication to what you learn from your readers. Give them what they want to know. Test and start over again. You need to adjust your communication to the culture and market you want to create a business relationship with.

This is a learning process. It is critical to your international success.

Your Action Plan Continues

Identifying which products and services you want to sell to your foreign markets is yet another action plan. Use good internet marketing practices based on providing information in the above plan. This gives you the possibility of creating other information products as front end sales for your foreign market.

Once you can recognize the international expertise you have acquired through this process, you are well on your way to developing your business internationally. Use this action plan to continue to expand into other countries.

After you have adapted your business to one country’s culture, the process usually gets easier. You will be able to anticipate stumbling blocks more easily. But more importantly you will know how to adapt yourself much faster than the first time around.

Are you committed to speeding up your international sales cycles?

Learn how to combine cross-cultural marketing tools and international sales strategies for faster sales.

Join us on the International Sales Road Map

Would you like to develop your international business?

Are you a beginner at international sales and marketing?

Read the Beginners Guide Discover Your International Business



By: Cindy King

About the Author:

Business continuity planning is essential in establishing a firm basis for a specific enterprise’s ability to recover and resume business operations in the event of an unexpected upheaval or disruption of the normal status quo of daily operations. Failure should never be an option and the only way to prevent failure is to incorporate a preparedness plan to supersede the negative impact of unexpected disaster scenarios.

Business continuity planning processes are designed to ensure the availability of critical services at any given time in order to prevent significant losses to the institution. A single incidence of the cessation of normal business operations due to the loss of data and technological resources can paralyze an enterprise, crippling it beyond repair.

Business continuity planning begins with an evaluation and assessment of the institution’s current business plan in an effort to redesign it for maximum potential. Updating your business continuity planning is essential in keeping pace with your technological advances or regulatory changes in order to prevent the oversight of business continuity. Planning is centered on the key facets of the business and often encompasses testing strategies, communication strategies, business operation processes, and technology processes in its implementation.

Addressing the major concerns of an enterprise is the core of a successful approach that safeguards the continuity of data necessary to the everyday functioning of an enterprise. Business continuity planning must feature an enterprise-wide approach that encompasses interdependencies among sectors, companies, and participants whether these are market-based or geographically-based interdependencies.

Making use of the implementation of risk management processes to minimize damage to public perception, trust, and confidence is another of the core components of business continuity planning.

Business continuity planning incorporates the inclusion of considerations and techniques within the business model in order to mitigate the disruption of everyday business service and operations.

Business continuity planning should involve the implementation of a business plan that is consistent with the overall strategy of the institution with an eye toward mitigating any negative effects resulting from a temporary disruption of business operations and processes. The planning implements automatic detection and correction of processes across the entire enterprise platform.

RTOs or recovery time objectives should be short and sweet. In fact, they should have the potential for completion within hours if not minutes rather than days or weeks. Business continuity planning instills effective RTOs into the recovery process.

Taking into consideration the size, complexity, and scope of a business is at the forefront of any complete, effective business continuity planning solution. In fact, identifying the strengths and weaknesses of an enterprise enables the completion of a successful infrastructure update that manages the risks while streamlining the business systems for optimal performance.

Business continuity planning should be designed to encompass all possible contingencies including pandemics, catastrophic disasters of natural origin, and catastrophic disasters of unnatural origin. Helping the business to grow through organization, assessment and organization to create storage, back up, and the protection of system information is critical to success and the core of business continuity planning.



By: John Engel

About the Author:

Business continuity (BC) has scaled the heights of the boardroom agenda to become the business issue of the 21st century. Companies are realising that ‘downtime’ – for whatever reason – is unacceptable. Reputation, turnover and a business’ very existence can be determined by its ability to respond to any operational disruption – whatever the cause!

Causes of operational disruption can be many and various; freak weather conditions, terrorist attacks, public order disturbances, criminal activity, accidents and so forth. The list is endless but, thankfully, most of these occurrences are rare.

One phenomenon that occurs with increasing frequency, however, is power failure. Its effects can be just as devastating and an obstacle to business continuity. Power problems and power cuts are now the most common cause of business disruption according to research by business continuity provider SunGard.

In July 2006, The Secretary of State’s Second Report to Parliament on Security of Gas and Electricity Supply in Great Britain from the DTI, Between April 2005 and March 2006, the total number of customer interruptions was around 21 million and total number of customer minutes lost 1,966 million.

Power continuity is normally part of a business continuity strategy but given the fact that businesses are more likely to suffer a power cut than a terrorist attack, shouldn’t it be the central theme?

The Business Continuity Institute in the UK defines BC as ‘the process, procedures, decisions and activities to ensure that an organisation can continue to function through an operational interruption’. The same could be said for power continuity. Without power continuity there is no business continuity.

So, how do you plan a power continuity strategy?

It starts with an assessment of the systems and equipment that are the bedrock of operational requirements; computers, telecommunications, electrical machinery, building management systems, entry systems, lighting, heating, cooling and so forth. They must be categorised into critical, essential and none-essential loads (load being the electrical requirement each one carries).

Critical loads directly affect the ability of an organisation to operate and must either be kept running when their mains power supply fails or be powered down in an orderly manner to prevent system crashes, data corruption and hardware damage.

Essential loads provide secondary support services that may be required for health and safety reasons (air-conditioning, emergency lighting and heating) or to maintain ambient temperature levels but they are not critical to the continuity of the business.

Non-essential loads are those that an organisation can afford to lose when the mains power supply fails such as general lighting and printing services.

Critical and essential loads need some kind of back-up power protection, usually UPS (uninterruptible power supplies), such as those provides by specialist suppliers like Riello UPS, with perhaps a diesel generator or some form of alternative energy source attached.

Why have a UPS and not just a back-up generator?

UPS does far more than just breaching the gap between power failure and generator start-up (which can be up to ten minutes in some cases). By nature of its online technology, a UPS will condition and stabilize a fluctuating mains supply and keep it to within a regulated and acceptable level, continuously, as well as on generator start-up, and cushion against many power problems such as sags, surges, brownouts, harmonics, flicker, frequency deviations, interference, interruptions, distortion and of course complete blackouts, which are associated with raw mains energy.

With reliance upon electronic equipment now critical to business (be it computer systems, telecoms equipment or manufacturing machinery), companies are spending more of their operational budgets on it. Preserving its life, therefore, is paramount. Computer systems, particularly, are sensitive to fluctuations in voltage current, which can result in data corruption or loss or even complete breakdown.

As with business continuity, a power continuity strategy will contain similar elements of planning, management and operation and what needs to be done in each case to guard against the inevitable power outage, which can strike at anytime and last from less than a second to several days depending on severity and cause. Businesses that protect against this by installing UPS and back-up power systems should see it as an investment in their long-term future and it should always be foremost in any business continuity policy.

For a comprehensive and (uniquely) comprehensible overview of power continuity read The Power Protection Guide.



By: Alison Campbell

About the Author:

 The Small Business Recession Plan “B”: How to Create the Six-Part Contingency Plan That Will Help You Guide Your Business Through the Storm

If you’re a small business owner, your list of worries seems never-ending. For starters, consumer confidence is down and your sales are starting to reflect that reality. And as experts predict a deep recession, it’s doubtful things will start looking up anytime soon. Yes, you’ve been wringing your hands and obsessing over the financial news for months, while simultaneously scrambling to keep your customers happy and your business strong. But action is the best antidote for agonizing—and now is the perfect time to create a recession contingency plan that will help you guide your business through any future rough patches.

Too often, when the economy goes south, a small business owner is paralyzed by anxiety and isn’t able to act quickly enough to save his or her company. Having a well conceived contingency plan in place gives you peace of mind when trouble hits and enables you to act quickly.

For small business owners, contingency planning is one of the best and most effective preventive actions you can take in a down economy.

Contingency planning will allow you to make the best possible decisions for your business if things continue to get worse before they get better. Even if you are an eternal optimist—after all, many of us entrepreneurs are—you’ll be wise to have a contingency plan in place if, say, one of your biggest clients succumbs to the bad economy, or if you have to face the difficult decision of whether or not to lay off an employee.

If you’re unsure where to start when it comes to crafting your contingency plan, here is an explanation of the critical elements you’ll want to include:

A People Plan. For small business owners, employees are often like family. That means the most difficult decisions you’ll have to make will probably pertain to them. That said, it’s important that you remain objective when creating the “People” section of your contingency plan:

1. What people assets are critical for you to keep? Why?

2. Who can “afford” a salary cut?

3. Who could undertake more responsibility?

4. Who are your definite keepers?

5. If you had to cut 10 percent of your workforce, what would your severance policy be?

6. How would you treat departing people so as to engender trust, respect, and loyalty of those remaining?

7. How would you implement a people “cut”?

By answering these questions truthfully and thoroughly, it will be much easier for you to make decisions concerning what to do with your workforce during the slow economy. Sometimes cutting back on your workforce, at least temporarily, is a necessary evil. Knowing that when you do so you are simply following a plan will help you manage some of the guilt that will come if you have to let someone go or reduce employee pay.

A Key Customer Plan. It’s likely that your customers are feeling just as much anxiety as you are right now, so it’s best to handle them with kid gloves. Fail to do so and you risk damaging a relationship that will not only help get you through these hard times but which could prove very profitable when things pick back up. Here are a few things to consider when developing the customer section of your contingency plan:

1. Who are your most profitable customers?

2. Who are the most loyal?

3. Who must you keep long-term at all costs?

4. How is the downturn affecting each of your customers?

5. How can you get closer to them?

6. Which customers have pressures of their own that will force them to ask you to cut prices? And how should you respond? Should you extend credit, put them on an agreed-upon payment plan, etc.?

7. What can you do to attract new customers?

You and your customers are in the same boat. They face the same struggles as you. In your dealings with them, it’s important that you strike a safe balance between managing their best interests and managing your own. The contingency plan will help you do that and help you make decisions that will allow you to strengthen your customer relationships now. When things pick back up, your customers will remember the way you treated them and will want to do even more business with you.

A Cost-Cutting Plan. When deciding where you could cut expenses, it’s important to consider what you could do to cut costs immediately by 10-15 percent. You should also go through your expenses line by line and consider which expenses are not necessary for your survival. Be sure to involve your employees when creating this section of the plan. Because they are on the front lines every day, they may have a better idea of what can be cut. For example, maybe they’ve noticed that you have an incoming paper supply that could be reduced. You should also include in your plan what to do if the amount you pay to lease office or warehouse space becomes unmanageable.

Naturally the decision to cut certain expenses will be easier to make than others. Just remember that now is the time to get back to the basics. You don’t need lots of bells and whistles to run a successful business, and taking a look at your expenses will help you separate the necessities from the frills.

A Cash Flow Plan. Cash flow is key to running any small business, and managing yours is never more important than in a tough economic period. That’s why you should include cash flow management in your contingency plan. There are two specific groups to consider: your customers and your vendors. First, think about how you can get delinquent customers to pay up. Talk with your customers and help them set up a payment plan with you so that you know you will be getting paid when you need it most. Also, consider giving a discount to those customers who agree to pay in cash. You should also think about how you can defer your cash outflows such as payments to vendors. Ask if you can go to a 60- or 90-day payment cycle.

Keeping up a healthy cash flow is vital during a slow economy. You might have to have tough conversations with customers who need to pay up or a vendor who you’d like to defer a payment to, but if these conversations help you keep cash in your business when you need it most, they will be worth it.

A Financial Safety Net Plan. So what do you do when all of your customers have paid up and you’ve extended your payments to vendors, and you are still having cash flow problems? Quite simply, you consider more drastic ways of putting cash into your business. It’s time to fall back on the financial safety net that you’ve created for your company. What will your safety net be? Will you draw on your home equity? Stop taking a salary? Ask friends or family for a cash infusion? Sell off some of the company’s assets? Reduce employee salaries? Apply for a small business loan?

You don’t want to be making these decisions when you are already in desperate need of cash. While you are still in good shape, plan out the first three ways you could immediately increase your cash flow. And do everything to ensure that you are protecting your credit so that if you do need a small business loan you can get one. Make certain to pay your bills on time. Don’t let anything fall through the cracks. If you are having trouble making a payment, let the company or bank know why. If there is a dispute on a payment, get something in writing that says you aren’t to blame. Being turned in to a collection agency will tank your credit score. You absolutely can’t risk it.

An Exit Plan. There are some situations you simply can’t plan for. You can’t know for sure how your industry will be affected by the down economy. It’s possible that no matter what you do the slow economy will make it too difficult for you to keep your doors open or too difficult for you to navigate on your own.

The exit plan is the hardest for any small business owner to put together. No entrepreneur wants to give up on a venture, but sometimes you have to face reality. So, think about what lengths you are willing to go to in order to keep your doors open. If you are open to taking on a partner, what kind of person is going to add the necessary skills to the business to help you keep the doors open? Or if you decide to sell the business, would you want to stay on and keep working for the company or would you want to go your separate ways?

Of course, keep in mind how long these transitions will take to make. As a small business owner you naturally have a strong attachment to your business. When you put so much blood, sweat, and tears into your business, it can be difficult to pull the plug at the right time. If you decide what your exit strategy will be before you are experiencing serious problems, you can take your emotions out of the decision-making process and come up with a clear-headed solution that protects your best interests.

Creating a contingency plan will help you minimize the risk of any surprises that pop up—and they will!—during a slow economy. But keep in mind there are some basic things that you absolutely can’t lose focus on during a recession.

You should be aggressively going after new customers, marketing your business nonstop, and giving your customers world-class service. Yes, these are trying times for small business owners, but the obstacles are not insurmountable. With the right plan in place, you can create strong, long-lasting relationships with your customers and a business that can weather any storm.

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About the Authors:

Ed Hess lives in Charlottesville, Virginia, and spent most of his business life advising entrepreneurs and financing their business ventures. He went to college at the University of Florida and to law school at the University of Virginia and graduate law school at New York University. Ed’s professional career was spent with firms like Atlantic Richfield Company, Warburg Paribus Becker, Boettcher and Company, The Robert M. Bass Group, and Andersen Corporate Finance, and he has built three service businesses.

In 1999, Ed began teaching business students part-time at Goizueta Business School, Emory University, during which time he created and taught the entrepreneurship course. In 2002, Ed joined the faculty at Goizueta full-time as an Adjunct Professor where he became the Founder and Executive Director of both the Center for Entrepreneurship and Corporate Growth and the Values-Based Leadership Institute.

Ed has written five other books:

• Hess, Edward D. Make It Happen! 6 Tools for Success (EDHLTD, 2001).

• Hess, Edward. The Successful Family Business: Proactively Managing Both the Family and the Business (Praeger: Westport, Connecticut, 2005).

• Hess and Kazanjian, eds. The Search for Organic Growth (Cambridge University Press: New York, 2006).

• Hess and Cameron, eds. Leading with Values: Positivity, Virtue and High Performance (Cambridge University Press: New York, 2006).

• Hess, Edward. The Road to Organic Growth: How Great Companies Consistently Grow Marketshare from Within (McGraw-Hill: New York, 2007).

In July 2007, Ed joined the Faculty of the Darden School of Business at the University of Virginia as a Professor of Business Administration and Batten Executive-in-Residence where he teaches courses on building small businesses and organic growth.

Charlie Goetz earned his college degree at Emory University and holds an MBA from the University of Texas. Charlie is a successful serial entrepreneur. He built several successful businesses, which in total employed over 1,500 people. He sold most of his businesses and made substantial amounts of money their sales. Charlie then began teaching entrepreneurship at Emory University in the Goizueta Business School where he was again successful. His courses are always oversubscribed, and he has earned multiple teaching awards.

Today, Charlie lives in Atlanta, Georgia, and is an investor in several new businesses and consults with people starting businesses. His specialties are marketing, customer acquisition, and product development.

About the Book:

So, You Want to Start a Business? 8 Steps to Take Before Making the Leap (FT Press, September 2008, ISBN: 978-0-13-712667-5, $18.99) is available in bookstores nationwide and from all major online booksellers.

For more information, please visit http://www.edhltd.com or http://www.ftpress.com.



By: C. Hand

About the Author:

Small and medium-sized enterprises tend to get ignored when talking about business continuity planning. The planning is more prosaic. The challenges are fewer. And most importantly, their budgets are smaller.

But of course, the same principles that apply to large businesses also apply to the small ones. We at Oppello are an IT consultancy that specialises in looking after small to medium sized businesses. And business continuity planning is a must for companies of all sizes. A small firm that loses all its data will go out of business, just as surely as a larger one.

If anything smaller firms become more vulnerable to crises because larger companies are geographically more diverse – knocking out your operations in say Edinburgh is not as business critical when your offices in London can take some of the overload.

A few years ago business continuity planning was only regularly undertaken by the larger corporations, nowadays SMEs are more than likely to make some kind of preparation. Part of the problem, however, is that smaller companies are typically less aware of the correct procedures than larger firms where systems have been developed.

Initial IT audit

Frequently we’ll find small companies that have thought about continuity issues but not implemented them fully, On our initial audit we’ll find, for example, that IT back-ups have indeed been taken. But the tapes are sitting next to the computer and the coffee cups! It’s frightening too the number of times you find that checking the tapes has not gone on – the procedures have never been tested.

Increasing sophistication

But with the growing awareness of the need for business continuity, smaller firms are starting to get more sophisticated and this kind of situation should soon start to become less and less frequent. Also one encouraging trend for smaller firms looking for business continuity support is that there are a greater number of support firms operating in this space and charging a price that is affordable. And size can sometimes be an advantage too. Large companies are often entrenched in old technologies and methodologies. One advantage that smaller companies have over larger companies is that they are able to respond and embrace new technologies more quickly Depending on the size of a business, support for business continuity planning can be brought in-house. Typically, a company with around 30 computers and a couple of servers could keep an IT specialist – as a full member of staff – busy for most of a week.

Other potential weaknesses

However, that can cause problems too. IT specialists are valuable commodities and tend to move around considerably. Also there remains the constant questions over how the company ensures that the business runs as normal when the IT expert is on holiday or sick.

The great thing about business continuity is that – irrespective of the size of your business – you can go a long way to devising a plan simply by getting your senior staff to think through the issues.



By: Mike Abel

About the Author:

To overcome business continuity challenges, a business will be required to formulate emergency or disaster management plans, also referred to as business continuity. Further, businesses also need to ensure that the plans prove effective, for which they can use the highly effective concepts and methodologies of Six Sigma.

Six Sigma can certainly help in devising the most effective contingency plans because it follows a statistical approach for solving problems rather than using gut feelings, that can prove to be wrong.

Employing DMAIC For Business Continuity

Most businesses nowadays are using the DMAIC (define, measure, analyze, improve, control) methodology for devising contingency plans for the future because the methodology is supposedly the best project management tool available. DMAIC was originally devised as a method for improving the efficiency of business processes, but now businesses are employing it for managing all types of projects, be it a quality improvement project or a business continuity project.

The DMAIC Process For Business Continuity

When DMAIC is being used for managing a business continuity project, the first step involves defining all the potential threats that can affect the company’s productivity and profitability. Once the threats have been defined, the next step involves measuring the exact effects that each of these potential threats will have on the business. This is done with the help of advanced statistical tools and techniques or Six Sigma simulation software tools, all of which help in making the most accurate predictions.

After this, the project management team conducts a brainstorming session to analyze the threats in detail and to seek innovative and cost-effective solutions for dealing with such problems. To get better results, businesses need to ensure that suggestions and recommendations are solicited from experienced personnel working in different functional departments such as sales, purchase, warehousing, and others. This is necessary because the external threats not only have the potential to disrupt a company’s production but can also have disastrous effects on the efficiency of other functional departments.

Based on the recommendations, improvements are then made wherever required across all functional departments. These improvement initiatives are aimed at either reducing or eliminating the potential damage that can occur in case the company were to face the threats for real. In the last phase of the DMAIC process, effective control systems are put in place so as to keep a regular check on the efficacy of improvements that were made earlier. Deploying control systems is necessary because disasters and contingencies can occur at any time and if the improvement measures are not up to mark, they will fail to provide the requisite level of security and protection.

Once all the requirements of DMAIC are met, a business needs to do nothing other than concentrate on its core processes, something that becomes a lot easier when both the external and internal threat perceptions have been eliminated with the help of business continuity plans.



By: Tony Jacowski

About the Author: