Business Continuity Planning: Key Elements of a Resiliency Strategy
Key Takeaways
- Understand the importance and purpose of business continuity planning. A well-designed plan keeps critical operations running during disruptions and positions a business to recover quickly.
- Develop a proactive business continuity strategy. Identify and prioritize key risks, outline response procedures and test the plan regularly to strengthen long-term resilience.
- Follow clear business continuity planning steps. Start small, build a structured framework and involve the right people to create a plan that’s practical, flexible and ready to use.
The purpose of business continuity planning (BCP) is to ensure that a company can remain ongoing during and after events that present significant challenges to its operations. A BCP aims to minimize losses, protect people and property and maintain essential services.
Today’s business environment presents a broad range of risks – from cyberattacks and data breaches to supply chain delays, labor shortages and inflationary pressures. Technology failures or power outages can interrupt operations just as easily as physical damage can.
At the same time, severe weather and natural disasters such as hurricanes, floods and wildfires are becoming more frequent and destructive, adding further strain on communities and businesses. In the United States alone, the costs of major disasters have averaged $149.3 billion per year over the last five years (2020–2024),1 underscoring the financial and operational toll these events can create.
A thoughtful business continuity plan helps organizations prepare for these risks, ensuring stability and faster recovery in an increasingly unpredictable world.
Why business continuity planning is important.
Understanding the importance of business continuity planning starts with recognizing how it protects a company’s most valuable assets – its people, operations and reputation. It enables businesses to recover faster, often allowing them to gain an advantage over competitors who move more slowly.
Small businesses are particularly vulnerable to setbacks, often because they have fewer resources and less flexibility. A disruption that might inconvenience a large corporation could threaten the stability of a small business.
Research shows a clear gap between perception and reality: While many small businesses believe they are prepared for disasters, only about 26% have a plan in place.2 Roughly 40% of companies never reopen after a disaster, and another 25% close within the following year.3
The benefits of a business continuity plan extend far beyond emergency response. It provides direction, helps bolster customer confidence and reduces long-term recovery costs. A business continuity strategy is not a nice-to-have; it is essential for long-term resilience and growth.
How to create a business continuity plan.
A strong continuity plan is best developed as a team effort. Bring together decision-makers and employees who understand daily operations to ensure that the plan is realistic and effective.
If no plan exists, begin small with a checklist of critical operations, likely risks and immediate response steps. Resources from organizations such as the U.S. Small Business Administration4 and the American Red Cross5 can help.
Once the basics are in place, the next step is to build a clear, actionable framework that connects those individual pieces into a cohesive plan. An effective plan goes beyond identifying risks – it establishes procedures, assigns responsibilities and ensures that every critical function is protected.
Build a plan in four actionable steps.
The following business continuity planning steps outline how companies can assess vulnerabilities, prioritize essential operations and establish strategies to prevent, respond to and recover from disruption. By following these steps, businesses help move from reactive problem-solving to proactive risk management.
Recognize potential threats and risks to business continuity.
Identify events most likely to disrupt operations – natural disasters, cyberattacks, power outages or system failures. Evaluate geographic and operational vulnerabilities and weigh each risk’s likelihood and impact.
Conduct a business impact analysis.
A business impact analysis identifies which functions must be restored first. Map the “five P’s”:
- People: Essential employees and backups.
- Places: Key facilities and possible alternate sites.
- Providers: Critical suppliers and secondary options.
- Processes: Core activities such as payroll or customer service.
- Programs: Tools and systems with the highest operational impact.
Rank each by importance and recovery time.
Adopt prevention and mitigation strategies.
Prevention lowers the chance of an event, while mitigation reduces its severity. Strategies can include:
- Emergency response and communication protocols.
- Supplier diversification and resource management.
- Pre-identified recovery partners such as IT vendors or contractors.
Document vendor contact information and keep digital and paper copies accessible off-site.
Test and improve the continuity plan.
A business continuity plan should evolve as the company changes. Review it yearly, train employees and run tabletop exercises. Test backup systems and data integrity to ensure that recovery is possible when needed.
Key elements of a business continuity plan.
Creating a plan is only the first step. The key elements of business continuity planning ensure that the plan works in practice – focusing on the systems, people and resources that keep operations running even under pressure. For small businesses, these elements turn strategy into stability, helping protect every critical area and building adaptability for the future.
Strengthen customer communication and reputation management.
Clear, timely updates during disruptions help maintain trust and minimize confusion. Establish a crisis communication plan that defines who will communicate, which channels will be used and how messages will be approved and shared.
Map customer touchpoints – email, social media, phone, website – and prepare message templates for common scenarios. Assign a spokesperson or small communication team to coordinate outreach to customers, vendors and the media.
Build supplier and partner flexibility.
Supplier reliability determines how quickly operations resume. To reduce dependency, identify alternate vendors who can step in if primary partners are affected. Maintain an updated list of these secondary suppliers, including key contacts and lead times.
Regularly review supplier contracts to understand how partners plan to respond to disruptions. Building strong supplier relationships before a crisis ensures smoother recovery and service continuity.
Ensure financial readiness in case of disruptions.
Strong financial planning is a cornerstone of any business continuity strategy. Conduct a financial impact assessment to determine how long operations could continue if revenue declined. Identify fixed expenses such as rent, payroll and insurance, and estimate variable costs that could be reduced during downtime.
Establish an emergency fund to cover essential expenses for at least three months. Secure a line of credit before it’s needed, and review insurance policies to ensure that coverage aligns with current risks, including business interruption.
Prioritize employee safety and training.
Employees are the foundation of any continuity plan. Create an emergency action plan outlining evacuation routes, shelter locations and contact procedures. Maintain a clear communication chain and ensure that staff contact information is accessible in both digital and printed forms.
Conduct regular drills or tabletop exercises and provide training on remote work, cybersecurity and emergency procedures to build confidence and readiness.
Protect workforce continuity through skills and cross-training.
Operational resilience depends on people as much as systems. Document critical skills and create a skills inventory to identify specialized knowledge. Encourage cross-training so key tasks continue even if team members are unavailable. Maintain procedure guides and backup systems to ensure knowledge transfer.
Safeguard technology and backup options.
Technology failures can halt business operations as quickly as physical damage. Review systems essential to daily functions – such as point-of-sale software, scheduling tools and databases – and ensure that secure backups exist for each.
Test backup systems regularly to confirm that data can be restored and establish manual workflows for key tasks if systems go offline.
Align continuity with leadership succession planning.
Leadership continuity ensures that decisions can be made when key leaders are unavailable. Identify essential leadership roles and document authority lines and decision-making processes. Update the succession plan annually to reflect organizational changes.
Real-world example: Continuity planning in action.
A small IT services firm suffered a ransomware attack. Because it had cloud-based backups and a communication plan, it restored data quickly, notified clients transparently and maintained trust. Competitors without similar safeguards faced longer outages and reputational harm. There are tangible benefits from a business continuity plan.
Fast fact: Cyber risks are especially pressing – 60% of businesses that report a cyberattack experience more than one incident, underscoring the need for strong data protection.6
Adapting to new risks in today’s economy.
Natural disasters grow more frequent and costly and are not the only challenge businesses face. Inflation, supply chain delays and labor shortages have made navigating business risks a year-round priority for companies of all sizes. Rising costs can strain cash flow, supplier setbacks can slow production and staffing gaps can disrupt service.
While global supply chains and digital dependencies make businesses more interconnected than ever, they also increase their vulnerability. Business continuity planning is a core business strategy, not just a precaution. It helps companies adapt budgets, protect revenue and stay aligned to long-term goals while navigating short-term pressures.
Protect your small business with Travelers.
A well-documented continuity plan, paired with the right insurance, strengthens resiliency, speeds recovery and protects long-term growth.
Contact your local independent agent to explore coverage options, get a quote and see how Travelers small business insurance can strengthen continuity plans and help you protect the future of your business.
Sources:
1 https://www.ncei.noaa.gov/access/billions/state-summary/US
2 https://www.uschamberfoundation.org/disasters/most-small-businesses-believe-theyre-ready-for-disasters-but-only-26-actually-are-new-study-shows
3 https://milkeninstitute.org/content-hub/insights/improving-small-business-disaster-response-and-recovery
4 https://www.sba.gov/business-guide/manage-your-business/prepare-emergencies
5 https://www.redcross.org/get-help/how-to-prepare-for-emergencies/workplaces-and-organizations.html
6 Travelers Cyber Risk Index 2025
