Business continuity planning sounds either simplistic or alien when dis-cussed with most business owners of small & medium enterprises (SMEs). Chances are the topic will probably never be a priority among SMEs until and unless something undesirable happened affecting their businesses, including many larger SMEs. Case in point is the COVID- 19 pandemic, a fast and furious undesirable incident of unprecedented proportion.

Business continuity planning comes in many forms, shapes and sizes, figuratively speaking. It is in fact a flourishing industry by itself ranging from complex disaster recovery preparation to simple business disruption insurance. Large corporates and highly regulated industries pay millions annually to ensure everything is least interrupted knowing that a million things can go wrong while running an organisation or a business. SMEs on the other hand will generally carry a simpler view of having insurance (predominantly mandated by law) and enough people handling the work required as their continuity readiness.

Taking the context of SMEs, business continuity carries indeed an uncomplicated connotation of ability to get back on its feet should there be a disruption – often due to fire, flood and per-haps manpower interruption at times. However, such view can probably be expanded as it is in-complete, and the overall understanding among SMEs can certainly be better organised and structured for greater appreciation.

Where & How To Start

While it is inconceivable to have all risks under-stood, mitigated and more-so remediated, SMEs ideally should be aware of at least 2 very relevant risks (among others) on the topic of business continuity, namely keyman & key-assets. When risk of these 2 components are managed, either tangibly or financially-in-kind as an interim alter-native, chances of recovery in the event of unfortunate happenings will be improved; or perhaps will allow the business as well as entrepreneur to “live to fight another day”.

Keyman, to SMEs, mostly translates to mean the business owners. However, expanding the scope to include key decision makers or “trusted generals” whom are not owners would be a savvy plus to entrepreneurs. Key-assets would typical be core revenue generating assets including, but not limited to, workers, machineries, stocks, premises, and/or delivery vehicles.

To appreciate the importance of business continuity, SMEs should start with identifying who are all the keymen (potentially employees and non-owners who can help the business in times of need) and what are the key-assets as “must-haves”. In ensuring keyman and key-assets are generally protected, insurance will inevitably come into the picture. While business owners mostly acknowledge the positives of insurance, many will insure because the law or the financier mandates it, typically at a minimal level.

Understanding of Keyman & Key-Assets

Business continuity planning requires SMEs to look at the subject deeper and expand the understanding to the sub-topics of succession, inconvenience assistance, and specific risk coverage. These expanded sub-topics are non-exhaustive in nature as it is impossible to mitigate all areas of risks and challenges faced by SMEs. Additionally, it is also wise to realise that any efforts to establish a business continuity plan will invariably involve costs and, occasionally, tax and consequential issues. These are subjects SMEs have to consider and strategize based on budget, capability and relevance. In any event, commitment and timeline are needed to have a meaningful and serious form of business continuity plan in place.

Keyman risks are often mitigated by SMEs by having an alternative decision maker, probably a family member or two. In reducing disruption risks to a keyman, SMEs should consider a succession plan of both a permanent or temporary in nature, including option to seek professional/ external assistance or in-source help to manage the business as continuity measures. In the absence of a knowledgeable and capable body for long term succession purposes, an added com-fort is to have sufficient insurance or monetary reserves to bridge the gap in resolving financial and business commitments. The keyword here is “sufficient” but “insufficiency” is often the common and unfortunate scenario. SMEs must periodically review the level of sufficiency with feedback from financial and insurance experts.

Disruption to key-assets is also one of the most troubling matters encountered by SMEs. Prioritising assets most relevant to business operations would be a start to any continuity planning. Look at the top 3 to 5 most important items (or assets) likely serve as the main arteries without which business will probably be severely impacted. Over the unfortunate and ongoing COVID- 19 pandemic episode affecting virtu-ally all economic sectors, these assets should clearly have presented themselves. Among them could be assets affecting delivery, production and communication. SMEs are recommended to have options and measures to address these gaps and minimise disruptions, including out-sourcing or alternatives put in place ahead or deployable on-demand basis when disasters struck. Failing which, an option is to put a financial cushion via sufficient insurance or buffer in place; the key word again is “sufficient”. On this note, level of insurance protection mandated by law or financiers should be viewed as basic cover and expand it where possible to include stocks, premises, break-ins, and workers group insurance.

Thinking Ahead For Peace of Mind

An advance mindset for some established SMEs is to consider circumstance/industry-specific mitigating arrangements or special on-demand insurance, if fiscally allowed and subject to availability in respective markets. Customised insurance coverage (potentially a pandemic insurance), alternative production/ processing sites and specific regulatory pro-grams are examples of advanced continuity planning options SMEs can consider. Indus-tries such as plantation, livestock, and chemical will likely to have industry-differentiated continuity planning as their risks are indeed very different. Views and assessments from subject matter experts in devising a customised plan will be ideal.

There is definitely room for improvement by SMEs in appreciating the need for business continuity planning. It is indeed disheartening to see a lifetime of efforts by dedicated entrepreneurs be unnecessarily disrupted and irrecoverable at times. The concept of business continuity is neither new nor complex. To most SMEs, it is indeed unsophisticated but can be incredibly damaging if not catered for in a meaningful way – a food for thought of its grave importance by really appreciating the potential impact.