SME Businesses Should Consider Developing a Business Continuity Management Plan

Business Continuity - a way to increase profit and reduce risk

Just about every risk management journal has an article about the need for, and benefits of, a small to medium enterprise having a Business Continuity Management Plan.

From my own experience in managing insured losses for over 40 years, it is extremely clear to me that the exponents of risk management are correct. With an insured loss, the business owner has the benefit of an insurance policy to reimburse the cost of any repairs and with proper and adequate business interruption insurance, they also have financial losses caused by any disruption to the business reimbursed.

Such losses can be due to a reduction in turnover (lost or reduced sales) or increases in the cost of working. This could be working overtime, outsourcing all or part of the process, renting new premises, airfrieght and the like.

When it is an uninsured disruption to the business, a Business Continuity Management Plan (“BCP”) is even more important. My experience shows that the time taken to recover to a normal rate of business survival is much higher with one of these plans. This is not just a casual feeling that I have gained from working in insurance claims, but from the study I undertook for my doctorate. The title of this study was The Strategic Management of Crises in Small and Medium Enterprises. An extract of the study can be found at Details of the book version can be found at

The Federal Government in Australia appreciate the need for business continuity management and this is demonstrated in the fact that they require organisations in several industries, such as the financial services sector requiring a documented and exercised plan, to obtain a licence. In other industries/professions, such as with Pharmacists, the Australian Government has funded the preparation of BCPs  for each pharmacy. This was a voluntary program. Governments in many other countries support the development of such plans. Singapore through the Singapore Business Federation comes to mind.

In one case with a pharmacy, the owner built the plan with Swine Flu in mind as the primary motivator. Only 1 day later, the chemist shop was devastated by a massive hail storm. The business was back up and running in only a few days as they had 1) phoned the tradesmen on their list, 2) contacted their insurance broker, 3) contacted their insurance claims preparer, and 4) downloaded the back- up of their data. Interestingly, the owner was way behind in backing up their data but she was urged to do it as part of the development of the BCP process.

I believe in the need for business continuity so much that we have a plan for each of our offices and further I worked with John Worthington, an expert in the field, to develop a low-cost solution available over the net, aptly called

It was pleasing for the LMI Group and I that after extensive testing, both the Pharmacy Guild of Australia and the Singapore Business Federation choose ContinuityCoach as their preferred platform.

While I hope no business needs to activate their plan, the reality is that they do get called upon and the feedback from the business owners and my own observations confirm they are well worth the effort.

If you own a business or are a broker to business owners please keep this very modestly priced option in mind.

One final thing to keep in mind; there is arguably no better way of determining the insurance needs for a business than to actually go through the process of developing a BCP. Not only does it identify the risks to insure, it also assists in the business interruption area by determining the Indemnity Period, percentage of wages to insure, and Additional Increase in Cost of Working Sub-Limit to name but a few.

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