What Is Business Continuity?

There are many terminologies and practices out there when it comes to running a business. While some terms might be more relevant to your business than others, the one you should not overlook is business continuity.

From a local bakery to a multinational conglomerate, every business has its own unique risks. This might look like the head baker having to take time off due to sickness, or a major supply chain disruption caused by ships blocking the Suez Canal. Proactive preparation to mitigate such risks before they occur and to ensure "business as usual" in the case of disruptions is what business continuity is all about.

In this article, we will demystify what business continuity is, what the benefits of having a business continuity plan are, and how to build a business continuity plan.

What Is Business Continuity?

Business continuity is the planning and preparation required to ensure that your business can maintain operations even during times of unexpected events, which can either slow down your operations or, worse, stop it altogether.

On top of the examples we mentioned just above, business disruptions can practically be anything, from interruptions (such as power cuts and blackouts) and cyber attacks to natural disaster (such as adverse weather conditions) and global health crisis (like the COVID-19 pandemic).

As you embark on business continuity planning, not only do you have to prepare for these potential disruptions, but you also have to assess their impact on your critical business functions to ensure and maintain operational resilience.

Terminologies debunked: Business Continuity vs Risk Management vs Operational Resilience vs Disaster Recovery

As mentioned at the beginning, terminologies govern the world of business. And we have noticed a substantial increase in how the terms "business continuity," "risk management," "operational resilience," and "disaster recovery" are referred to as if they are interchangeably when in fact they are not.

This table below debunks and differentiates these terms according to their definition, primary focus, key activities, and regulatory influence.

What Are the Benefits of Business Continuity Planning?

Business continuity planning is integral to your risk management and disaster recovery plans. Unfortunately, many organisations fail to realise how important business continuity planning is until a disruption strikes, which, as you may have worked out, is often too late.

As disruptions can take any shape or form, the ultimate goal of business continuity planning is to ensure your business is prepared to continue operating, regardless of how minor or major the disruption transpires.

If you prioritise business continuity planning before a disruptive incident takes place, you stand to enjoy these benefits:

You can take comfort in knowing your business is ready to handle unexpected disruptions.

We think this Richard Cushing's quote best encapsulates the sense of preparedness:

Always plan ahead. It wasn't raining when Noah built the ark.

It's only natural that a crisis, especially an unexpected one, can put anyone under tremendous stress and worry—your employees included. As a business owner or a leader, it's rather unfair to expect your staff to stay completely calm and make critical decisions on the spot. What frontline workers deem the best course of action at the time might not necessarily compliment business operations and recovery efforts.

Let's take a look at the local bakery again. Imagine a severe storm knocks out power in the area, leaving the bakery without electricity just as the day's first batch of bread is about to go in the oven.

Without a proper business continuity plan, staff are unsure what to do. Manager tries calling the power company but gets no clear timeline for restoration. Employees make individual decisions—some leave early, others attempt to salvage dough, but without clear guidance, much of the stock is wasted. This results in at least twofold: first, delayed and cancelled orders, which damage the bakery's reputation, and second, a significant number of perishable ingredients go bad due to a lack of refrigeration, resulting in financial losses.

On the other hand, with a business continuity plan in place, the bakery has a backup generator ready to power critical equipment, so refrigeration and minimal baking operations continue. A pre-established emergency checklist guides employees on what to do; a customer communication plan is activated—updates are posted on social media, and pre-written messages are sent to wholesale clients and customers. This way, the bakery minimises losses, keeps customer trust, and gets back to full operations much faster than competitors who weren't prepared.

This example illustrates how frontline decisions made under stress can either help or hurt business continuity—without guidance, employees may take actions that don't align with recovery efforts. A well-structured business continuity plan ensures everyone knows their role, reduces chaos, and improves response efficiency.

You safeguard your business assets and processes.

Business assets encompass both tangible and intangible assets. This can look like deck and convection ovens at the local bakery, or intellectual property (such as trademarks, patents, royalties) at the multinational conglomerate. What is also considered one of your most important business assets is how you operate your business, or business processes, such as how and where you source ingredients, how you process payments, and how you manage online and pre-order pickups, to name a few.

Business continuity planning plays such an incredibly important role in minimising the damage to such processes during a disruption. As an example, if the local bakery's main flour supplier can only deliver half of the amount you need for the week, their business continuity plan should inform which suppliers are next on the list to fill the gap.

You can continue your business operations with minimal to no disruptions.

Disruptions of any kind can cause your business to slow down. Worse, it can also cripple your business operations, which may last longer than expected and cause even more damage as a whole. It's your responsibility to ensure "business as usual" to retain your customers and, by extension, stay profitable. The more days you are not operational, the more you stand to lose.

Building on the above example, imagine the bakery doesn't have any alternatives or existing relationships with any other flour suppliers; this could mean missed sales opportunities, sudden overstaffing, and increased waste from other perishable ingredients.

You maintain a good reputation.

Another major benefit you can enjoy having a business continuity plan in place is how the public perceives your brand, also known as "brand reputation." Your ability to continue operations in the midst of a crisis serves as a reflection of business resilience and stability. Not only can this win customer trust and loyalty, but it can also instil confidence in your stakeholders and investors at the same time.

You ensure compliance with regulatory requirements.

In some industries, business continuity is not just a "nice to have," but legally required or mandatory. For example:

• Financial services in the United Kingdom are required by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) to have business continuity and operational resilience plans in place.
• Healthcare organisations, like the NHS, must implement to ensure business continuity and effective crisis management encompassing vital components, according to the Emergency Preparedness, Resilience and Response (EPRR) Framework.

How to Build a Business Continuity Plan

As a business continuity plan outlines critical business functions, their risks and risk mitigation strategies, roles and responsibilities, communication protocols, and testing scenarios, it is definitely not something you can magically write up overnight. You can, however, take comfort in knowing that the time, effort, and energy you put into creating a business continuity plan will only impact your business for the better.

The following 7 steps shall inform you to build a solid business continuity plan.

Step 1: Identify and prioritise critical business functions.

Just as many roads lead to Rome, there are many ways to approach business continuity planning, depending on what your business focuses on. For example, the local bakery won't need a sophisticated IT recovery strategy, just as the multinational conglomerate wouldn't rely on a reactive, paper-based contingency plan.

One of the best ways to get started is to identify the critical functions of your business. As an example, we will again look at the local bakery whose critical functions may look like:

• Baking and production: Making bread, cakes, and pastries fresh every day. Without this, there is nothing to sell.
• Ingredient supply: Getting flour, sugar, eggs, and other ingredients delivered on time. No ingredients = no baking.
• Customer service and sales: Taking customer orders, serving walk-in customers, and handling payments.
• Equipment and utilities: Keeping ovens, mixers, and refrigerators running. If these break down, baking stops.
• Health and safety compliance: Following food safety rules to keep everything clean and safe to eat.
• Marketing and promotion: Letting customers know about special offers, seasonal treats, or new products.
• Financial management: Keeping track of money, paying suppliers, and making sure there is enough cash flow to stay open.
• Staffing and scheduling: Making sure there are enough bakers and cashiers to keep things running smoothly.

As you determine which business functions are critical and prioritise them based on their impact if disrupted, you essentially perform business impact analysis (BIA), which is not a one-and-done process here but rather an ongoing process that helps inform multiple, following steps.

As you can imagine, different businesses will naturally have different critical functions. The bigger the business grows, the more complex critical functions can become as there are more moving parts and dependencies, among other factors. Identify what yours is, and prioritise accordingly.

Step 2: Set goals and objectives.

Once you have identified and prioritised your critical business functions, the next step is to set clear goals and objectives for business continuity. These should outline what you need to achieve in order to keep your business running smoothly during disruptions.

Ask yourself:

• What functions must be restored first?
• How quickly should they be back up and running?
• What resources are needed to meet these goals?

A key factor to consider is your Recovery Time Objective (RTO), which is the maximum amount of time it should take to restore critical business functions after an incident.

As an example, baking is arguably critical for the local bakery. If the ovens break down, do they need them running again within two hours, or could they manage for a full day? A clear RTO helps the local bakery plan for disruptions and take action to minimise downtime.

For a multinational conglomerate, on the other hand, critical functions can be far more complex. For instance, a company that manufactures consumer electronics might rely on global supply chains, IT infrastructure, and logistics networks. If their enterprise resource planning (ERP) system crashes, impacting thousands of orders worldwide, they may need an RTO of just 30 minutes to prevent financial and operational chaos. In contrast, if a regional distribution centre experiences a temporary disruption, they might have a longer RTO, such as 24 hours, as they reroute shipments.

Step 3: Identify and categorise business risks.

It's best to define categories of risk and set the scope of their impact on your business operations, especially for bigger organisations that operate across multiple regions, have complex supply chains, or are subject to stringent regulatory requirements.

Building on the previous example of the multinational consumer electronics manufacturer who relies on global supply chains, IT infrastructure, and logistics networks, their business continuity planning must account for various risks that could disrupt their operations. Their risk categories might look like:

• Operational risks: Direct impact on production and distribution, such as supply chain disruptions, IT system failures, and manufacturing equipment failure.
• Financial risks: Impact on revenue, cost, and profitability, such as currency fluctuations, rising raw material costs, and credit risk.
• Cybersecurity risks: Data breaches, hacking, and IT security threats.
• Regulatory and compliance risks: Trade restrictions and tariffs, environmental regulations, and product safety compliance.
• Natural disasters and geopolitical risks: External threats impacting operations, such as earthquakes or typhoons, political instability, and pandemic risks.

It's worth noting that different organisations may choose to define and categorise risks on their own terms. We have covered in much greater detail what risk categories are, as well as some common frameworks that can help you get started easily here: Understanding Risk Categories.

Step 4: Develop risk treatment strategies, policies, and procedures.

With risks categorised and their scope of impact set, you can now develop risk treatment strategies to mitigate, transfer, accept, or avoid risks. This ensures that your organisation allocates resources effectively and maintain business continuity and resilience by implementing practical, structured responses to potential disruptions.

As for the example of the multinational consumer electronics manufacturer, they can:

• Prioritise high-impact risks, e.g., ERP system failure
• Allocate resources effectively, e.g., investing in backup manufacturing sites or cybersecurity improvements.

It's worth noting that the risk treatment strategies mentioned (i.e., mitigate, transfer, accept, or avoid) are just one of many frameworks available. Different businesses may approach risk treatment differently based on their specific needs, industry standards, and risk appetite.

Step 5: Continue to monitor and evaluate.

Even the most well-thought-out strategies can become outdated due to changes in business operations, ever-changing risks, regulatory updates, or external shifts. What has worked for the past decade might not yield as optimal results nowadays. The key to business continuity is then ongoing vigilance, testing, and improvement.

This might involve regular testing and drills to identify weaknesses, gaps, and areas for improvement before an actual disruption occurs. As an example, the multinational consumer electronics manufacturer might conduct an IT disaster recovery test to see if their backup systems can restore operations within the defined RTO. Similarly, a local bakery might practice responding to a power outage to ensure they can maintain operations using alternative energy sources.

Furthermore, the BIA and risk assessments conducted in earlier steps should be periodically reviewed and updated to reflect current business operations and external factors. Consider:

• New business functions: Have new services or products been introduced?
• Operational changes: Has the supply chain, IT infrastructure, or workforce changed?
• New risks: Are there emerging cybersecurity threats, economic shifts, or regulatory changes?

For instance, if the bakery expands to online ordering and delivery, it may need to reassess its critical functions and risks related to digital payment security, logistics, and customer service.

Step 6: Get various departments involved.

Business continuity is most effective when it becomes part of the organisation's culture. This means ensuring that all employees—not just leadership or IT teams—understand their roles in continuity efforts. Consider:

• Conduct regular training and refresher sessions.
• Encourage employees to report potential risks or process inefficiencies.
• Keep business continuity top of mind through newsletters, reminders, and internal communications.

A well-prepared workforce ensures that when disruptions occur, the response is swift, coordinated, and effective.

Step 7: Track, report, and learn from results.

Hopefully each test, drill, or real disruption provides you with valuable insights, which you should then document lessons learned and make necessary adjustments strengthens your business continuity over time.

Always Stay One Step Ahead

When it comes to business continuity, the best time to plan was yesterday. Missed that? Well, the second-best time is now.

Whether you are running a cosy bakery or a global enterprise, disruptions are inevitable, but disaster isn't. A robust business continuity plan ensures that when chaos knocks, you answer with confidence, not panic.

C2 Meridian Business Continuity Management System (BCMS) is designed by business continuity experts for business continuity professionals to automate and streamline the everyday management of business continuity, from managing BC plans and conducting BIAs to mapping dependencies and achieving and maintain ISO 22301 compliance.

Book a demo today and see for yourself what C2 can do to strengthen your business continuity management.