Three consequences of not having a Business Continuity Plan

Do I really need a business continuity plan (or BCP)? What can really go wrong without it? To quote Murphy: “Anything that can go wrong, will go wrong”. Essentially, every organization is at risk of potential disruptions or disasters. In this post we first define a business continuity plan and then highlight what we consider to be the five biggest risks of not having a proper business continuity plan.

What is a business continuity plan? 

A business continuity plan is a plan of action aimed at ensuring that business will continue during and after a disaster. A proper BCP should comprise of:

  • an analysis of organizational threats;
  • a list of the primary tasks required to keep the organization’s operations flowing;
  • management contact information that can be easily located;
  • an explanation of where personnel should go if there is a disastrous event;
  • information on data backups and organization site backup; and
  • collaboration among all facets of the organization.

A business continuity plan is therefore a valuable tool for business owners whether you have just commenced business or have been in business for years.

 What are the risks of not having a business continuity plan?

  1. Reputation

Failing to address a disruption that impacted on business continuity can make or break your organization’s reputation for years to come. Although your clients will accept that disasters and disruptions occur, they also expect you to quickly and efficiently respond to any disruptions.

  1. Financial loss

One of the consequences of not having a business continuity plan is financial loss. It is estimated that the costs associated with a fire or explosion, whether intentional or accidental, is approximately $5.8million and a storm, $4.4million. This does not include the potential liability costs resulting from damages claims. Can you really afford not to have a business continuity plan?

  1. Decreased stability or complete closure

A recent Touche Ross study reported that “the survival rate for companies without a business continuity plan is less than 10%!”. And, according to research conducted by the University of Texas, “only 6 percent of companies suffering from a catastrophic data loss survive, 43 percent never reopen and 51 percent close within 2 years.”


No organization is invulnerable from disaster or disruption, no matter the size. Business continuity planning is a crucial component of an organization’s risk management strategy. Not having a BCP in place puts your assets, people and stakeholders at risk. Creating and maintaining your BCP will ensure you have the resources and information to effectively deal with disruptions and disasters.

With CloudOak’s Plan4Continuity, your business continuity plan is a live system that contains plans, simulation schedules and audit logs of all activations. It is also a full management system of your business continuity activities and communications.