Definition of Business Continuity

Business Continuity

Business continuity equates to proactively developing processes, procedures, and activities to ensure an organization can carry out essential functions during operational disruptions.

What is business continuity?

Business continuity is the intentional development of processes, procedures, and activities to ensure an organization can continue operating its essential functions during operational disruptions.

Disruptions can stem from many sources, both internal and external. Examples of internal causes of disruption include:

  • Power outages
  • System failures
  • The sudden absence of key personnel

On the other hand, external disruptive events may include:

  • Natural disasters
  • Terrorist attacks
  • Cybercrime
  • Pandemics

Business continuity comes into play not only for events that could stop functions completely but also for those that have the potential to impact the organization’s ability to operate optimally. For example, the sudden illness of a key executive may not immediately shut down daily processes. Still, it could cause certain functions to suffer in their absence.

What does business continuity involve?

The primary purpose of business continuity is to keep essential functions running during a disruptive event and help a business recover with as little downtime as possible.

Business continuity entails 2 distinct elements – business continuity planning and business continuity management.

  1. Business continuity planning (BCP): Developing strategies, policies, and procedures to help an organization anticipate and prepare for disruptions that could affect its operations.

A business continuity plan typically considers 3 key factors:

  • Resiliency: The degree to which an organization can anticipate, adapt to, and recover from disruptions.
  • Recovery: The process of restoring operations after a disruption has occurred.
  • Continuity: The maintenance of critical operations during a disruptive event.
  1. Business continuity management (BCM): Regularly assessing, testing, and updating BCPs to ensure they remain up-to-date with the organization’s current needs and risks.

Why is business continuity important to a small business?

Business continuity is critical for all organizations, regardless of size or industry. After all, the COVID-19 pandemic was definitive proof that no business is immune to disruption.

Small businesses need to be especially mindful of the importance of business continuity. They generally operate with fewer resources than larger organizations, which means they are less capable of absorbing the financial costs of disruption.

Business continuity can help your small business prepare for operational disruptions, minimize downtime, and protect its precious resources. Below are 5 compelling reasons to invest in business continuity today:

  1. Securing financial health: A solid business continuity plan can help you minimize financial losses and protect your business’s bottom line if an unexpected disruption hits your business.
  2. Protecting your employees: A proper business continuity strategy will help you stay open during a crisis. That way, your employees can focus more on keeping operations running than losing their jobs.
  3. Enhancing reputation: Businesses with established continuity plans can better meet customer demands, maintain compliance with regulations, and protect against supply chain disruptions.
  4. Staying ahead of the competition: A business continuity plan is essential for staying ahead, as it gives your small business an edge in times of crisis.
  5. Leveraging opportunities: By being prepared for disruptions, your small business can capitalize on opportunities that may arise during difficult times.

How to build an effective business continuity plan

Many business owners appreciate business continuity’s importance but have yet to implement a concrete plan. For some, resource constraints mean they must dedicate most of their money towards operations, leaving little to no room for business continuity investments. Others are discouraged by the seemingly complicated process of developing and managing a business continuity strategy.

The good news is that building a business continuity plan framework does not have to be challenging or financially draining. Here are 5 steps to get you started.

Step 1: Conduct a business impact analysis (BIA)

A BIA can help you understand the underlying weaknesses in your organization. That way, you can know which functions and systems to prioritize when creating your continuity plan.

Step 2: Assess your risks

A risk assessment identifies potential hazards, such as natural disasters or cyberattacks, so you know the disruption scenarios to consider.

The BIA and risk assessment work hand in hand. The BIA details the potential effects of the possible disruptions outlined in the risk assessment.

Step 3: Implement suitable business continuity tools

With a proper understanding of the hazards and how they can impact your business, start looking into the tools necessary to keep your vital processes going in case a risk materializes. Below are some critical business continuity tools worth considering, depending on your needs.

  • Backup solutions: Cloud-based backup solutions are great for preserving your most important digital assets.
  • Remote communication systems: Communication solutions like VoIP and instant messaging can keep your staff connected during a crisis.
  • Point-in-time copies: Frequently creating copies of your data and systems can help you quickly restore operations after a significant disruption.
  • Hot and cold sites: Consider setting up remote locations where you can continue operations during a disruption. A hot site is a fully-equipped facility with the same hardware, software, and equipment as your main office. Meanwhile, a cold site is a facility with just the basic functionalities of your primary premises.
  • Disaster Recovery as a Service (DRaaS): DRaaS is a cloud-based backup solution that quickly replicates and restores vital data and applications after a business continuity incident. You can pay for DRaaS on a subscription basis and have your data securely backed up in the cloud and ready to go when needed.

Step 4: Develop response procedures

A business continuity plan must have clear guidelines for responding to disruptions. If an emergency hits, there must be no question about:

  • How to react
  • Who is authorized to make decisions
  • How operations will continue

So, create comprehensive policies that detail how to handle different types of disruptions, from evacuation plans and data recovery strategies to staff and customer notification guidelines.

Step 5: Test, review, and update the plan

Testing your tools and procedures frequently is critical for ensuring your business continuity plan is up to par. Conduct frequent drills and refresher boot camps to evaluate how well your team can recover when faced with disasters.

Review and update your plan regularly too. Potential threats are bound to change as the business landscape evolves and technology advances. Revisiting your plan at least once a year will help you maintain its effectiveness against current threats and disruptions.

A brief history of business continuity

Before the mid-20th century, what is now referred to as business continuity mainly consisted of:

  • Fire prevention
  • Fireproof safes
  • Insurance

Then, the Information Age started, and computers gradually integrated with business operations.

Risk managers began seeing the potential failure of IT systems as a significant threat to businesses. Moreover, increasing system complexity resulted in an overreliance on IT experts, which would leave companies helpless if they left. As a result, the need for contingency plans that addressed potential disasters became evident.

The Disaster Recovery Institute (DRI) was established in 1988 to provide disaster recovery guidance to businesses relying on IT systems. Initially, DRI guidelines primarily focused on creating appropriate redundancies and backups as protection from:

  • Hardware failures
  • Database corruption
  • Human errors

In the early 1990s, the DRI expanded its doctrine to address how businesses could continue operating as they wait for their IT systems to be restored after a failure or when the catastrophe is so great that the systems are unrecoverable. Thus, disaster recovery morphed into business continuity as a formal discipline.

The following 20 years saw monumental events like the 9/11 attacks on the World Trade Center, the 2008 financial crisis, and the 2020 COVID-19 pandemic push business continuity plans beyond IT systems.

Today, business continuity is at the forefront of corporate risk management. Companies are more aware of the importance of having a strategy for remaining operational and recovering quickly after a disruption than ever before.

Other similar terms to business continuity that can help you

Summary of the definition of business continuity

Business continuity means developing processes, procedures, and activities in advance to ensure a business can continue operating during operational disruptions. It involves 2 primary elements: business continuity planning and business continuity management.

Business continuity started as disaster recovery when the Information Age began. Over time, disaster recovery evolved to encompass other aspects of business continuity, such as preventing disruption and sustaining operations.

Creating a business continuity plan might seem overwhelming, especially if you run a small business. Nevertheless, having an effective strategy is the only way to be confident in your company’s long-term survival.

Similar glossary definitions you must know

Knowledge Management


People also ask

How can I create a payroll continuity plan for my business?

What steps do I take to apply for a small business loan for my business?

What workforce trends should I be aware of as I plan for 2023?

From hiring to retiring, make managing your team a breeze with Zenefits