The recovery plan

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Disaster recovery toolkit

The recovery plan

In developing a plan to restart your business, make sure you have all the information you need to make considered decisions. Following the Steps to recovery section of the toolkit will give you much of the information you need to develop a recovery plan that will shape the future direction of your business. When using this information, be sure to consider as many alternatives for your business as necessary. These can include:

  • continuing to operate to the pre-disaster business model
  • improving on existing business performance
  • changing the business model (for example a bakery might decide to begin the business again as a cafe)
  • exiting the business altogether

It is recommended that you seek professional advice in developing a recovery plan and implementing that plan. Such independent advice may be invaluable to avoiding mistakes and capitalising on opportunities.

As the authors of "Are U Ready? Surviving Small Business Disaster" state: "Remember, the decisions you make at this point concerning your business, if not thought through very carefully, could be detrimental to your future. Your decision could also have an impact on many other people, including the broader community, and could possibly affect others’ livelihood as well."

Developing a plan

Once you have gone through the initial steps following a disaster, the business is better placed to reopen. The next step is to develop a recovery plan. A recovery plan should state what the business needs to reopen, such as processes and equipment that are critical to reopening and your recovery objectives, including actions to achieve those objectives and who is responsible for those actions.

Such a plan, together with cash-flow forecasts and profit and loss budgets will help a business determine whether it is viable to reopen, what the business will look like after reopening and how the business is going to finance the reopening.

In developing a recovery plan, it may be very difficult to make assumptions in a post-disaster environment – past experiences may no longer be relevant and the market may have changed significantly, at least in the short term. The evaluation of the market following a disaster will help you with your assumptions.

Part of your plan should include a review of your business strategy. You should create or update your strategic plan and business plan to check the viability of your assumptions and help redefine the business for the future – what does it need to look like to satisfy you as the business owner and your clients?

If your planning shows that it will be difficult to finance your planned reopening, the plan may have to be modified or the business owner may have to consider exiting the business.

Developing a recovery plan

Use the following suggested steps to develop a recovery plan. Ideally, you should look to follow these steps in the first month after the disaster.

Download the checklist