What Should Be Included in a Business Continuation Agreement?

What Should Be Included in a Business Continuation Agreement?

As a business owner, you dedicate countless hours to helping your company thrive. But have you considered what would happen if an unexpected event disrupted your operations? This is where a business continuation agreement becomes advantageous. It is a proactive plan designed with a goal so that your business can continue to function during and after a significant disruption. Developing a robust plan can feel overwhelming, but it is a critical step in safeguarding your company’s future. At Prosper Financial, our advisors can help you navigate this process with confidence. A comprehensive business continuation agreement should address several key areas:

• Data backup and recovery
• Mission-critical systems
• Financial and operational assessments
• Alternate internal and external communications
• Alternate physical locations for employees
• Impact on critical business relationships
• Regulatory reporting and communications
• Customer access to funds and securities

What are the key components of a business continuation plan?

A well-structured business continuation plan acts as your company’s roadmap during a crisis. It details the specific actions needed to maintain operations. Your plan must be tailored to the size and needs of your firm and should include several core elements.

• Data Backup and Recovery: You need a viable system for both hard copy and electronic data backup and a clear process for recovery.
• Mission-Critical Systems: Identify all systems essential for your business to function, like IT infrastructure and production software, and outline how they will be maintained or restored.
• Financial and Operational Assessments: Detail how you will evaluate the financial and operational impact of a disruption to make informed decisions.
• Alternate Communications: Establish methods for communicating with customers, employees and regulators if primary channels fail.
• Alternate Physical Location: Designate an alternative worksite for employees if your primary location becomes inaccessible.
• Critical Business Relationships: Consider the impact on key partners, banks and other stakeholders and how you will manage these relationships.
• Regulatory Reporting: Determining whether you can continue to address all regulatory reporting requirements in a timely manner.
• Customer Access to Funds: Your plan must specify how customers can promptly access their funds and securities if your firm cannot continue its business.

What other factors should my business consider?

Beyond the core components, an effective plan addresses the finer details that can make a significant difference in a crisis. These additional considerations help fortify your business against unforeseen challenges and provide a smoother recovery.

• Defense: Implement advanced cybersecurity measures to buffer sensitive information from digital threats and safeguard the physical security of your data centers.
• Communication with Stakeholders: Develop clear communication protocols for all internal and external stakeholders. Designating a spokesperson and preparing communication templates can maintain clarity.
• Regular Testing and Updates: Your business is not static, and neither should your continuation plan be. Schedule regular drills and update the plan based on the results, incorporating any changes to your business processes or technologies.

A financial advisor can provide a valuable perspective, helping you identify your company’s critical functions and build a practical path toward upholding them. The team at Prosper Financial is experienced in working with business owners to understand their goals and prepare for the future.

How can I prepare my business for the future?

An emergency or significant business disruption can happen at any time. A comprehensive and regularly updated business continuation agreement is not just a regulatory requirement; it is a fundamental part of responsible business management. Taking the time to create a detailed plan means that you are prepared to safeguard your employees, serve your customers and preserve the business you have worked so hard to build.

If you are ready to take the next step in supporting your company’s future, contact Prosper Financial today. Our experienced advisors are here to help you build a business continuation plan tailored to your distinguished needs.