Figures suggest that up to 80% of businesses that suffer some sort of catastrophic disaster which forces them to cease trading for a period of time never fully recover to their pre-disaster level. This is a shocking statistic, but why is this the case?

The importance of a business continuity plan

The main reason businesses fail long term is because they don’t plan for disaster. Thinking it will never happen to them, means they have no idea what they would do if there was a fire or flood at their premises. In fact, only 25% of small businesses have a business continuity plan in place.

Yet, having a clear view of what you need to do and what your priorities are, can set you back on the right path quickly and ensure your long term recovery. Even a relatively simple plan will help you focus. Make sure your employees know what to do in an emergency, as their safety is of paramount importance. Back up your data off site, so you can quickly and easily retrieve key information that keeps your business open and trading. Have a customer contact plan to let your customers know you can still fulfil orders.

Factors significant to long term business survival

Research has shown that business survival is not necessarily dependent on the level of physical damages suffered by the company. Much more important is the impact on your customers. This means that, while in the immediate aftermath, the focus should be on employee safety and, as far as possible, damage limitation, within a matter of just a few hours you should turn your attention to your customers.

If your customers can readily get substitute goods or services from elsewhere it’s much more important that you contact them quickly to reassure them that you can still supply what they need. If they can, and do, switch to one of your competitors, it will be less easy to re-establish your customer base, particularly if it takes you time to get back up and running.

If your business operates in an industry which is already on the decline it will be much more difficult to recover. The speed with which you can get back up and running and your ability to adapt to a changing market, will both be factors in your success long term.

The extent of the financial resources lost by the business in the event of a disaster is also important. The less you have to invest back in to the business, the less chance of long term success, particularly if you don’t have sufficient insurance in place to cover all your losses.

The message is clear: if you want to give your business a chance of recovering from a disaster, make sure you have a robust business continuity plan in place and don’t ignore the importance of contacting your customers quickly to reassure them.