Having Plans Even If You Don’t Plan to Recover

I once had my lead sales and marketing guy pull in a favor and get me a meeting with the president of a small specialty, food processing company to discuss business continuity planning and the potential of us helping in the development of a program for this firm.

As soon as I walked into the conference room, this gentleman announced, “Joe, I really don’t know what there is for us to discuss, the fact of the matter is, we have this one location with a lot of expensive and unique equipment.  If a disaster takes us down, we simply go out of business.  There is no way, short of building a whole new factory for us to get up and running again.  And, quite frankly, that would just be too expensive and not practical.”

Now, of course, I talked to him about the value of having data backup and recovery plans for all of his computer resident data and infrastructure, but, he felt he had all of that in place and was confident with his IT recovery solutions.

So, instead of trying to convince him that he should have some sort of business continuity plans, I told him that even with the strategy of “shutting down and going out of business”, you want to make sure that you do that right – and, that that strategy also requires pre-planning, pre-provisioning, and exercising.

For example, there are things you need to do to go out of business properly:

  • You may still have accounts receivables to be collected.
  • You probably have accounts payables that need to be met.
  • You probably still owe your employees their last paychecks.
  • You have bank accounts and other financial matters that must be closed.
  • You might have salvaged equipment to be sold.
  • You might have legal obligations that need to be addressed.
  • For customers with unfulfilled orders, you might want to help them find another company that could help them.
  • And more.

You don’t just simply stop functioning as a business; there are things that must be done to dissolve the entity.  And, these things will require some people to be active and some tasks to be performed.

Your plan should include strategies for:

  • Getting your trusted advisors together;
  • For communicating with employees, suppliers and customers;
  • For addressing financial and legal matters;
  • And others

I think we were both surprised that by the end of our meeting, we were shaking hands on a project to team up and document his business continuity – or, should I say – business cessation plans – which we now know as his Crisis Management Plan.

The moral of the story is, even if your strategy is not to invest in recovery solutions, which, in some cases might be the most prudent strategy, your firm still needs a Crisis Management Plan to see that strategy properly employed.

At the end of the day, we had another satisfied client.

Thank you for your input.