If you’re figuring out how to create a business continuity plan, start by finding which parts of your business cost you the most when they stop. Then set recovery targets, line up workarounds, and write down who does what. To keep money coming in during a shutdown, add a cash section to that plan: know your fixed monthly costs, how long your reserves will last, and which funding sources you would use, in what order, before you need them.
A disruption rarely hurts in just one way. Ready.gov’s business impact analysis guidance points to lost or delayed income, higher expenses, fines, contract penalties and customers who leave for a competitor. Putting rough dollar figures on those losses shows you which processes to restore first and how much a recovery strategy is worth paying for.
This guide walks through five steps built on the federal Ready Business continuity plan template. You’ll run an impact analysis, set recovery time targets, choose strategies and manual workarounds, and assign roles. You’ll also learn how to test and update the plan. The cash step compares your options plainly, from reserves and credit lines to SBA disaster loans, which are tied to federally declared disasters, and merchant cash advances. It also shows how to read the true cost of each before you sign.
How to create a business continuity plan: the short answer
You can build a working continuity plan in five steps:
- Analyze impacts. Figure out which parts of your business would hurt most if they stopped, and how fast the damage would add up.
- Set recovery targets and resource needs. Decide how quickly each critical process has to be back, and list the people, equipment, data and suppliers it depends on.
- Choose recovery strategies. Pick how you’ll keep going: an alternate location, backup systems, or manual workarounds when the usual tools are down.
- Add a cash plan. Work out how you’ll cover payroll, rent and suppliers while revenue is down or delayed.
- Assign roles, test and update. Name who does what, practice the plan, and review it on a schedule.
A business continuity plan is a written playbook for keeping your most important work going, or getting it back fast, after something disrupts it. That could be a fire, a flood, a long power outage, a key supplier going dark, or a system failure. The goal isn’t to predict every crisis. It’s to decide ahead of time what matters most and how you’ll protect it.
The Ready Business continuity plan template from Ready.gov starts with the basics. You define the plan’s scope, objectives and assumptions. Then you set roles and responsibilities, lines of authority, and succession of management, so everyone knows who takes over if the owner or a manager is unavailable. The template also covers how you’ll work with outside contractors and vendors during a disruption, since many small businesses can’t run without them.
One practical tip: keep it short. A small team is far more likely to read, remember and actually use a few clear pages than a thick binder that sits on a shelf. Start with your most critical operations and add detail only where it helps someone act.
Step 1: Run a business impact analysis
Start by figuring out which parts of your business you can’t do without, and what it would cost you if they stopped. That’s the job of a business impact analysis (BIA). According to Ready.gov, a business impact analysis predicts the consequences of a disruption and gathers the information you need to build recovery strategies. Everything else in your continuity plan builds on what you learn here.
List the impacts you’d feel
Walk through each key function, such as taking orders, making or shipping product, payroll, and billing. Ask what happens if it stops for a day, a week or a month. Look at both operational and financial effects:
| Impact | What to look for |
|---|---|
| Lost or delayed sales and income | Orders you can’t fill, invoices you can’t send, card sales that stop |
| Higher expenses | Overtime, rush shipping, expedited parts, temporary space or equipment |
| Regulatory fines | Missed filings, reporting deadlines or compliance requirements |
| Contract penalties | Late-delivery clauses or service-level commitments you can’t meet |
| Customers leaving | Buyers who switch to a competitor and may not come back |
Put numbers on it where you can
For the interruptions that would really hurt, estimate a dollar figure. Use your own records, such as average daily deposits, typical weekly payroll and the terms in your contracts. Then compare that cost with what a recovery strategy would cost, like backup equipment, a second supplier or cloud data backup. A strategy that costs less than the loss it prevents is usually worth a closer look.
Rank what to restore first
The functions with the biggest operational and financial impact go to the top of your recovery list. If losing your point-of-sale system halts revenue within hours, it comes before a back-office task that can wait a week.
Factor in timing
The same outage can cost very different amounts depending on when it hits. A disruption during your busiest season, at month-end close or right before payroll will do more damage than one in a slow stretch. Note your high-risk periods so your recovery targets in the next step reflect them.
Step 2: Set recovery targets and list what you’d need
Once you know which processes matter most, give each one a deadline and a shopping list. The Ready Business continuity plan template asks for two kinds of targets:
- Recovery Time Objective (RTO): how quickly a business process or IT system has to be running again before the damage becomes more than you can absorb. Set one for each critical process, such as taking orders, running payroll or shipping, and one for each system those processes depend on.
- Recovery Point Objective (RPO): how far back your restored data can be. If you back up every night, a crash late in the day could wipe out that whole day’s sales records and invoices. If that’s too much to lose, back up more often.
Next, list what you’d need to hit those targets. The Ready Business resource requirements worksheet breaks needs into categories and asks you to estimate quantities at 24 hours, 72 hours, one week and later. Most small businesses can work from these categories:
| Resource | What to write down |
|---|---|
| Staff | How many people, which skills, who can cover for whom |
| Workspace | Desks, square footage or an alternate site |
| Equipment | Production machines, vehicles, tools |
| Technology | Computers, phones, point-of-sale terminals, software logins |
| Vital records and backups | Contracts, customer lists, tax and bank records, where backups live |
| Raw materials | Inventory and supplies needed to restart production or sales |
| Third-party services | Payment processing, payroll provider, internet, delivery |
Your needs will usually grow over time. You might get by with two people and a laptop on day one, then need the full crew and fresh inventory by the end of the week.
Flag your weak links
Mark any supplier you rely on as your only source, and any custom or specialized equipment that would take a long time to replace. Next to each one, name at least one possible alternate supplier or rental option. Contact them before you need them, so you aren’t searching for a backup in the middle of a crisis.
Step 3: Choose recovery strategies and manual workarounds
When your normal setup goes down, you need a written plan for serving customers anyway. Decide in advance how each critical process will keep running, what it will take, and who does what. The Ready Business continuity plan template organizes this into a few parts you can fill in for your own business.
Document each recovery strategy
For every strategy, write down the procedures, the resources it needs and the logistics of carrying it out. If the plan involves moving to an alternate worksite, note where it is, how staff will get there and what has to be set up before work can start. To estimate those resources, the resource requirements worksheet lists categories to work through: staff, office space, technology, vital records, production equipment, raw materials, single-source suppliers and third-party services. It also asks you to estimate what you’d need at 24 hours, 72 hours, one week and later.
Plan how you’ll restore data
Include a data restoration plan that covers your networks, devices, applications and data. List what gets restored first, where backups are kept and who is responsible for each system.
Write out manual workarounds
Spell out how work gets done without your usual systems. Then keep the forms and supplies those workarounds depend on stocked and easy to find. For example:
- Taking customer orders on paper order forms during a system outage
- Logging payments or deliveries by hand so you can enter them later
- Keeping printed contact lists for staff, customers and vendors
Set your incident steps
Decide ahead of time how an incident will be handled:
- Detection: how a problem gets noticed and reported.
- Alerts: who gets notified and how.
- Activation: who can put the continuity plan into effect.
- Damage assessment: how you’ll judge what’s affected and which recovery strategies to use.
Step 4: Build the cash side of your continuity plan
Most continuity plans cover people, systems and buildings but skip a key question: how will you pay payroll, rent and suppliers while revenue is down? Start with your business impact analysis. Ready.gov recommends putting dollar figures on lost income, extra expenses and penalties for each disruption scenario. Add those costs across your expected recovery time, and you have a working estimate of how much cash you’d need to get through.
Public disaster loans
The Congressional Research Service’s SBA disaster loan FAQ describes two main SBA disaster loans for businesses:
- Economic Injury Disaster Loans (EIDLs) provide up to $2 million for obligations and operating expenses the business could have met if the disaster hadn’t happened.
- Business Physical Disaster Loans provide up to $2 million to repair or replace damaged property that insurance doesn’t cover.
Both are tied to federally declared disasters. A burst pipe, a key customer leaving or a local outage won’t qualify. Your plan needs a backup for disruptions that aren’t covered.
Private funding, with the true cost spelled out
Private options like merchant cash advances can fund faster, but they usually cost much more than SBA loans. Before you sign, learn how a merchant cash advance works, including daily remittance. Then check three numbers:
- Factor rate: the multiplier applied to the amount you receive.
- Total payback: the advance multiplied by the factor rate. You can estimate total payback with our MCA calculator.
- Daily remittance: the amount taken from your deposits each business day. Make sure your reduced revenue can support it.
Before choosing, compare a factor rate to an APR so you can weigh the advance against a loan or line of credit on equal terms.
Keep application documents ready
Add lender and SBA contact details to your plan, along with copies of your recent bank statements, so you can apply quickly if you need to. If you’d like to see private options ahead of time, you can see your funding options with a no-cost application at funding-today.com or call (833) 632-3050.
Step 5: Assign roles, test the plan and keep it current
A plan only works if people know their part and the details are still accurate on the day you need them. Put names next to every task, practice with your team, and update the plan whenever your business changes.
Name who’s in charge, and who’s next
Choose a team lead who coordinates the response and at least one backup for that person. Write down who has the authority to activate the plan, who can approve spending, and who talks to vendors and customers. The Ready Business continuity plan template includes sections for roles, succession, delegation of authority, training, exercises and scheduled reviews, so you can fill in names as you go rather than starting from scratch.
Train first, then practice in stages
- Orientation: Walk everyone through the plan, where it’s kept and what their role is.
- Tabletop exercise: Sit down with your team, describe a scenario, such as a payment processor outage during your busiest week, and talk through each step. Note where people get stuck.
- Full-scale exercise: Actually run part of the plan. For example, open at your alternate site or process orders using your manual workaround.
Set a review schedule and update triggers
Put a review date on the calendar and assign one person to own it. Also update the plan right away when something big changes:
- You move or add a location. Owner: operations lead
- You sign or lose a key vendor. Owner: purchasing or owner
- A named team member leaves or changes roles. Owner: whoever handles staffing
- Your lender, bank or cash sources change. Owner: bookkeeper or owner
Keep copies you can reach
Store the plan where you can get to it even if your building is closed or your systems are down. That could mean a printed copy at home, a copy with your backup lead, and a version in secure cloud storage. Include phone numbers, account details and vendor contacts so no one has to look them up during an emergency.
If your cash plan points to a gap you’d like to understand better, you can see your funding options with a no-cost application at funding-today.com or call (833) 632-3050.
Keep researching on Funding Today
Frequently asked questions
What should a small business continuity plan include?
A practical plan covers who does what, what you recover first and how you keep working until things are back to normal. The Ready Business continuity plan template includes scope and objectives, roles, succession and delegation of authority, vendor contacts, recovery time and recovery point objectives (RTO and RPO), recovery strategies, alternate worksites, data restoration, manual workarounds, incident management, training, exercises and scheduled reviews.
Your plan should also have a cash section that shows how you would cover payroll, rent and supplier bills while revenue is down. A template can stay short and still work if it fits how your business actually runs.
What is the difference between a business impact analysis and a business continuity plan?
The business impact analysis is the research, and the continuity plan is the action. A business impact analysis estimates what a disruption would cost you, such as lost or delayed income, higher expenses, fines, contract penalties and customers who leave. It also helps you decide which processes to restore first.
The continuity plan takes those findings and turns them into recovery targets, strategies, assigned roles and workarounds you can actually follow.
Can I get an SBA disaster loan if my business had no physical damage?
Possibly. Economic Injury Disaster Loans provide up to $2 million for obligations and operating expenses your business could have met if the disaster hadn’t happened, so you don’t need physical damage to qualify. The catch is that these loans are tied to federally declared disasters. Many disruptions, such as losing a key customer or a local outage, won’t trigger one.
For setbacks that don’t qualify for a disaster loan, it helps to know your other options ahead of time. You can see your funding options with a no-cost application at funding-today.com or call (833) 632-3050.
How far ahead should my plan estimate the resources I’ll need?
Plan in stages instead of picking a single date. The Ready Business resource requirements worksheet asks you to estimate your needs at 24 hours, 72 hours, one week and beyond. It covers staff, office space, technology, vital records, production equipment, raw materials, single-source suppliers and third-party services.
Staging your estimates this way shows what you need to restart right away and what can wait. It also helps you match your spending to how long you expect the disruption to last.
How often should I test my business continuity plan?
Make testing a regular part of your plan’s scheduled reviews rather than a one-time event. The same Ready Business template describes three levels of exercise. Orientation sessions walk people through the plan. Tabletop exercises talk through a realistic scenario. Full-scale exercises actually carry out the recovery steps.
Many small businesses start with orientation and tabletop sessions because they cost little. It’s also smart to run a fresh test after big changes, such as new staff, a new location, a new key supplier or new financing that affects your daily cash flow.
Sources
- Business Impact Analysis · Ready.gov (FEMA / U.S. Department of Homeland Security)
- Business Continuity Plan (Ready Business template) · Ready.gov (FEMA / U.S. Department of Homeland Security) · 2020-03-01
- Business Continuity Resource Requirements Worksheet · Ready.gov (FEMA / U.S. Department of Homeland Security) · 2020-03-01
- SBA Disaster Loan Program: Frequently Asked Questions (R44412) · Congressional Research Service
This article is general information, not legal advice. Laws and deadlines vary by state and change over time; check the linked sources or speak with a licensed attorney about your situation.
