Though most midsize businesses have business continuity plans, few have tested them, according to a new report from The Hartford.
The insurer’s “2014 Midsize Business Monitor” found that 59 percent of midsize businesses surveyed had a formal, documented continuity plan; 33 percent had only an informal, verbal plan; and 8 percent had no plan at all.
However, while 92 percent of respondents had business continuity plans, only 19 percent had actually tested their plan, despite the potential risks.
More than a third (36 percent) of businesses surveyed had been unable to meet a client’s needs due to a business interruption, putting their relationship with that client at risk. Of those businesses:
- 57 percent used an alternate supplier and avoided any direct impact on their clients.
- 39 percent lost business to other suppliers but had clients return once their business resumed operations.
- 9 percent lost clients that did not return.
Businesses also need to be aware of the impact their own vendors and suppliers can have on their ability to meet client needs, the report said. Most of the midsize businesses surveyed (84 percent) rely on suppliers, vendors or consultants. Four in 10 reported they had suffered a supplier interruption, and almost one-third had lost revenue due to a supplier problem.
More than 500 owners and C-level executives of midsize businesses headquartered in the U.S. with annual sales or revenues of $10 million to $1 billion participated in the online survey, which took place Sept. 16-23, 2014.
Source: The Hartford