More than 550,000 small businesses in the UK have been forced to halt trading due to a disruption in the last two years, according to 2016 research by small business insurer Direct Line for Business. The average cost of keeping a small business afloat while unable to trade for two weeks is estimated to be £8,775.
Of those companies that have had to cease trading due to business disruption, the period of shutdown lasted, on average, more than three months. This will be of particular concern for the one in five small businesses that claim that they would not be able to survive if they had to cease trading for more than a month.
Reduction in profit (48%), reduction in revenue (42%), loss of customers (39%) and putting personal money into the business (32%) were found to be the most common impacts of an interruption in trading on small business owners.
A 2013 study, by the Chartered Management Institute (CMI), found that organisations without a business continuity plan in place had lost more revenue, more new business opportunities and more customers due to business disruption events than those with a plan.
The CMI study found that of organisations without a BC plan:
- 55% suffered reduced revenue
- 29% lost new business opportunities
- 25% lost customers, as a result of a business disruption incident
In all cases those organisations with a BC plan in place suffered fewer losses.
Here are five ways in which you can cut down disruption to your business:
- Good planning begins with identifying risk. Knowing what risks you face as a business is the first step to mitigating them.
- Incident specific action plans help you respond more effectively. When a crisis strikes you need an action plan that you can use in real time.
- Ensure you have communication when you need it most. When your power is down or your network has been hacked, you must still be able to communicate.
- Build your supply chain resilience by including your supply partners within your crises response platform.
- Practice makes perfect. Test and test again, so that when you need it you are ready to respond quickly and effectively.
To find out more about how to save time, money and customers when you suffer a business interruption, download our free white paper.
