How to create a continuity plan for your small business

• Develop a continuity plan to maintain operations during unexpected challenges.
• Prioritize essential tasks and organize emergency contact info for quick access.
• You can safeguard your small business with insurance that fits your needs to help protect you from the unexpected.

Running a small business can be full of surprises — some positive, like winning a new customer unexpectedly, and others challenging, like storms, tech problems, illness, or loss of a key employee. These disruptions can impact your operations, but a well-crafted continuity plan can help you weather the storm.  

A continuity plan is an essential tool designed to keep your small business operations humming even when there is a sudden emergency. In fact, research by the Fed shows that nine out of 10 small businesses reported experiencing a financial or operational challenge in 2023. 

To help ensure operations can continue during and after a disruption, here are the key steps to creating a business continuity plan. 

1. Develop your plan

Clear communication is the key to staying in business during challenging times. Knowing exactly how to get in touch with your team can save you valuable time and keep you organized, no matter what’s happening around you. 

Gather your team’s contact information in one place: Create a spreadsheet that includes the contact details of all key employees, especially phone numbers and personal addresses.  

As a backup, it’s also wise to request emergency contacts, such as a spouse or close family member. Store this information digitally and keep a hard copy in a secure location, so it’s easily accessible when you’re in the middle of a crisis. If your business depends heavily on suppliers or vendors, make sure you document their contact info as well. 

For instance, if you run a bakery, you could have a list of suppliers for critical ingredients like flour and butter. Although you might have this information stored in your phone, your team members need to be able to access it, too, in case you’re unavailable. 

Put someone in charge: Designate someone on your team to lead emergency communications, as well as an alternate. If your small business has several locations, consider selecting a coordinator and backup person for each site. 

Establish backup communication channels: If you face a natural disaster, weather-related emergency, or technology incident, you may not be able to communicate using phone, video conferencing platforms, or email. Ask your IT team or outside managed services provider to come up with a plan for staying in touch with your team if the electricity is out, or your internet or phone service goes down. 

Some key questions to consider include whether you need an electrical generator, if you should invest in backup internet solutions like hotspots, and whether your leadership team needs laptops to work remotely. 

It’s much easier to tackle these tasks ahead of time than in the middle of a disaster or emergency.

2. Identify critical business functions

Documenting your critical business functions will help prioritize tasks during an emergency. If some of your employees are unable to work or key resources become inaccessible, you may need to focus on the bare essentials. 

Prioritize key activities: Critical business functions are activities your internal staff must perform to deliver the products or services your customers rely on. Let’s say you run a hair salon for children where cutting hair is a critical business function. In an emergency that prevents you from operating at your usual location, you’ll need to arrange an alternative venue — perhaps a salon across town that is willing to share space — to continue serving your clients safely and efficiently. 

Create a list of important accounts: It will be hard to fulfill critical business functions if you don’t have access to your financial accounts. You’ll need to access your bank account, payroll provider, and rent and utility accounts to keep your operations running. Make sure that you document these and other important financial account numbers and discuss with your advisors whether you should grant anyone else on your team access to these accounts. 

Make time for succession planning: Most small business owners want their business to continue even if they can no longer run it. Doing succession planning with a team of professionals such as your attorney and business advisors — and updating your succession plan regularly — can help ensure that you have some say in how your business is run if you can’t lead it.

3. Create recovery strategies 

Making sure your business is insured is helpful when recovering from any major disruption. State Farm^® offers small business insurance options — such as a Business Owners Policy (BOP), which offers a combination of coverages to help protect your unique business. Your State Farm agent can help you protect your small business, so you can focus on growing your business.

Learn more insurance and financial tips from State Farm for your small business. 

This post was created by Insider Studios with State Farm.