MBA2098 Guest Teacher – Rochelle Clarke – How to Protect Your People, Profits, and Growth From Unplanned Events With a Business Continuity Plan

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Welcome to the $100 MBA Show. Helping you take care of your baby, your business that is every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company. I started my co founder back in 2014 and today's episode is a guest teacher episode. On our Guest Teach episodes we bring on an expert to teach their area of expertise. Today we have Rochelle Clark and she'll be teaching you how to protect your people, your profits, your growth from unexpected events with a business continuity plan. For most of us as entrepreneurs, our biggest asset that we actually own is our business. And yet many of us don't have a plan for if things go wrong. You need to make sure that your business can survive and any kind of unforeseen calamity, whether it's a natural disaster, a pandemic, you getting sick, a vital person in the business loses their life. This is not fun to think about. But as the owner, as the founder of your business, your job is to protect it at all costs and to think about what are we going to do if we have a crisis. We need to make sure the business keeps on going, that the team keeps getting paid, that you get paid. The business actually can keep accepting cash that the machine doesn't. This is such an important thing we need to plan for. And this is why we brought on Rochelle to teach this lesson. She's a business continuity expert and she's here to help. I can't wait to get into this one. So let's get into it. Let's get down to business.

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It feels good to save big. It feels good to Geico. In August of 2016, I got hit with the flu from hell. I literally was floored. I couldn't get out of bed for 72 hours straight. I don't even rem those three days very clearly. It's all a blur, really. I wasn't able to work at all. I wasn't able to even function. Luckily, I have a co founder, my partner, Nicole. She stepped up and took care of things and the business while I was recovering. But it wasn't easy. And that was a big wake up call for us that we need to have a continuity plan. We need to have a plan in place to make sure that if anything happens to either of us or anybody in the business or a natural disaster or things out of our control like a pandemic, we need to know how to move forward. And that's when we started to put into place our own business continuity plan. You can't be the person that knows how everything runs, has access to everything, controls all the assets. There's gotta be a way for somebody to take over just in case. But it goes beyond that. And that's why we brought on Rochelle Clark, who is an expert in this topic. She's been published in major publications like Forbes, and she's here today to teach us how to plan our own continuity plan for our business. So I'm going to pass it on to Rochelle, but I'll be back to wrap up today's episode and give my takeaways. But for now, take it away, Rochelle.

Hey, folks, this is Rochelle Clark from Continuity Strength. Thanks for joining me today. We are living in uncertain times and I am here to teach you how to protect your business from unplanned events with a business continuity plan. Now, if you've ever applied for a loan or business insurance, you've had to check a box that asked if you have a business continuity plan in place. Now, many business owners tend to mindlessly check yes, even if they don't have a plan in place. This is not a good idea, as we have seen in the pandemic, and I will tell you why. Now, there's a reason why these institutions ask for a business continuity plan. And, and no, it's not to annoy you or give you extra work. You see, banks and financial institutions are required by law to have business continuity plans in place themselves. And the research indicates that close to 90% of businesses with a business continuity plan reported having reduced disruptions, improved resilience and faster recovery from disruptions. So there are a number of benefits to statistically proven benefits to having a business continuity plan in place. Now, what is a business continuity plan? A business continuity plan is a contingency plan that provides direction about how to keep your business operations running if something unexpected were to happen. Now, some of the most common disruptions and the statistic is that one in every two businesses is going to experience one of these disruptions during the course of its life cycle. Disruptions can be natural or they can be man made. The top five disruptions that a business will experience during its lifetime, one in two businesses will experience during its lifetime are an unexpected death, divorce, distress, disability or disagreement. The pandemic would have fallen under distress. Now these, any one of these can have an absolutely devastating impact on a business, particularly if it's a small business. How devastating? Well, the average disruption will cost a business about $7,000 per week and it may result in the stoppage of work. Yeah, basically in the stoppage of work for up to three months. And still 25% of these businesses are going to shut down entirely. So that's pretty devastating, particularly if you are a small to medium sized business without the necessary resources to buffer the impact of such a disruption. Now, some of you may be patting yourself on the back because you have business interruption insurance. Well, there's a reason why just about 2% of business interruption claims were paid out during the pandemic. And for this, if you do have business interruption insurance, I'd ask you to check your policy and you may find the words that essentially say that businesses are only eligible for reimbursement if a covered event causes physical damage that results in losses, which means your unexpected death, divorce, disability, distress or disagreement because it doesn't cause physical damage that results in losses or automatically any one of these can potentially not be eligible for a business interruption. Payout have a chat with your broker if you have questions about this. So you see the responsibility for protecting your people, your profits, your company's growth from unplanned events. That's an internal job. This type of risk management and risk mitigation cannot be delegated. As a business, you can't rely on your bank or insurance company to save you from actions that you don't take to secure your business. Now, a business continuity plan is a contingency plan that you can hand off to a family member, a spouse, a business office manager. It includes key information that a business needs to respond if the unexpected happens. This includes information in four main areas. Whom to contact in and out of the organization. This, of course, includes employees, if you have them, but also your customers, your suppliers, your key stakeholders as well. They will need to be contacted in the event of something adverse happening in the business. Now, many of you may think back to the pandemic when lots of businesses were very, very slow to respond to customers. Maybe it's a business that you were regularly going to and, and, and supporting. But when the pandemic hit, there was absolute silence. You know, in this case, that was typically an indication that the business was trying to figure things out and they didn't have a plan that stated exactly how they should react in the event of something adverse happening. So that's an example of documenting whom to contact in the event of. Right. As a customer, you would have been a person who, with a good business continuity plan, might have received some sort of notification from that business. Area number two, where to find key documents. Now, key documents include documents like your lease, your mortgage, your key contracts, but not only where to find these documents, but who has access to these documents. It won't be everyone in the organization, but it's good to know that in the event of something happening, you can contact Jane or Mary or Bob, who has access to that key document. Area number three, financial matters. And this, this is usually an important one because even during a disruption, you want to ensure that you can continue to pay and be paid right. So this section would include information on who has access to your various financial accounts. Of course, this would also include who has, for example, signatory rights to your bank accounts. I can't tell you how many instances we've seen of, for example, the untimely passing of a business owner who was the only person with access to the business's bank account. Well, what that essentially means is that because of that person's passing, the bank isn't automatically going to give access to anyone else in the business who does not have signatory rights to that account. So as you can imagine, well, I guess you can only imagine what the impact on payroll is going to be on bills that need to be paid, etc. So it can be devastating. And area number four, last but certainly not least, is the operational workarounds. So, for example, what are the key tasks that keep this business running? How are they performed now, and how can they continue to be performed if the current way of working was for some reason impacted? Right now there's a lot of talk about cyber security and cyber threats. Well, the question that I would ask you as a business owner is, well, how many of your key tasks are currently operating virtually or, you know, via the Internet? And the second question is, if something were to happen that prevented you from operating in that way, how can you continue to work? These are areas that you really need to think about ahead of time so that you have the sufficient opportunity, I guess I would say the sufficient opportunity to really think through how you would react if something like this were to happen. And what are your practical next steps if you were to think about an operational workaround. Now, once these four areas are documented, it's really, really, really important that you share it with the people who you are relying on to respond during a disruption. Also, can't tell you how many times someone has taken the time to create a business continuity plan. And you know, just like a will, if you just stick it under the cushion of your couch and you don't use it or you don't share it, it's just as ineffective because no one else in the business will know how to react. So it's really, really important once this information is documented, that it is shared with the relevant people who need to know. Now, documenting these four areas ensures that you have all of the information at your fingertips during a disruption when the most important thing you need is readily accessible information. Thinking through and documenting this information ahead of time minimizes the response time during a disruption, for sure. But this foresight also reduces the number of decisions that would need to be made during a disruption when emotions are heightened and maybe the business is losing money. You see, continuity planning allows business leaders to really focus on making the right strategic decisions to navigate the disruption, instead of expending energy on day to day operational decisions in the height of the moment. So you may be thinking, do I need to do this alone? And the answer is, absolutely not. You don't have to figure this out all on your own. There are manual templates, of course for sure, but they they would require some bit of thinking through. But of course there are also online solutions to help. For example continuity strengths. Online business continuity plans are specifically designed to make this process easy for small to medium businesses, from the sole entrepreneur to the bigger, more established business. It's designed so that plans can be completed, usually in under an hour. But the better news is that the questions are so simple that you can delegate to an intern or someone else in the business and it truly takes the pressure off of the key business leaders. What is most important is that your business has a plan of action, a plan to respond in the event of the unlikely. This is not a role that can be delegated. Risk management as a business leader cannot be delegated to someone else outside of the business. Thank you so much for your time. I trust that this was valuable.

We've all been there. You hold onto a coupon but forget about it and suddenly it's Expired.

Expired in 2012.

Dang it.

Fortunately, by switching to Geico, you could save about $900 on car insurance without ever touching a coupon.

It feels good to save big. It feels good to Geico. What a vital and important lesson by Rochelle Clark I can't stress enough how important today's lesson was. I know we are busy. I know that we don't want to think about the worst or something as big as like a pandemic happening again. But like Nassim Taleb says in his book the Black Swan, we all think that the worst is not going to happen until it happens. And the only people that actually succeed are the ones that prepare. So I want you to make sure that you prepared. There's nothing wrong with being prepared and it actually doesn't take too long. Now I want to add one thing. Many of us don't like giving up the keys to somebody else or having a way for somebody to have access. My challenge to you is ask the question, what's the worst that can happen? There's always a way to rectify something that happens or make sure you're protected. Whether it's a legal contract, whether it's tracking activity or access or checks and balances and backups. So you want to make sure that you feel comfortable with your system. But what's not an option is you holding all the keys, holding everything close to the chest. Then the business rules you. You're not in control anymore. If an emergency happens, where you're needed, where you can't work, whether you're injured or your family needs you or heck, you need a mental break. Things need to keep going. You build and control the business. You don't let the business control you. Thanks so much for listening to the $100 NBA show. If you love what you hear, hit subscribe, hit follow on your favorite podcast app. The podcast app maybe that you're listening to right now. By hitting subscribe or follow, you get our next episodes automatically. It's a great way to support the show, but it also gives you access to over 2000 lessons 2000 episodes in our archives. If you really want to support the show, share it on social right now. Go ahead and share it with your friends. Let them know that you're listening to the hundred dollar NBA show. Thank you in advance for spreading the word. Before I go, I want to leave you with this. Sometimes when we start our businesses, we're busy just building and trying to make money and just getting on our feet and we don't actually make the time to plan or create a continuity plan. I get it. You need to make sure you have a business in the first place before you protect it. But once you start getting traction, once you start seeing that, hey, this is something worth protecting, you got to do it asap. You owe your business, your team, yourself that much. Thanks so much for listening and I'll check you in tomorrow's episode. I'll see you then. Take care.

Of.

Gas, snacks, tolls.

This trip is draining my wallet.

Yeah, but we'll be with family.

You're in a good mood.

What's your deal?

What's my deal? I saved at Metro with no activation fees and I got one line of 5G for just $25 per month. Kept the phone I love and a 5 year price guarantee on my top.

Tuxt and data detour to Metro. Get that more for your money feeling only at Metro by T Mobile.

Just bring your number. $30 first month and $25 after with autopay not available. If with Metro or T Mobile in the past 180 days.