Business interruption can be detrimental to any company, especially midsize businesses. According to The Hartford, most midsize businesses have business continuity plans, but few have actually tested them. An unproven continuity plan poses a risk for businesses, as they might be unable to meet client needs due to an interruption in their operation or lose revenue due to a supplier issue.
According to a recent survey conducted by The Hartford of over 500 midsize business owners and C-level executives in the U.S. with annual revenues of $10 million to $1 billion, 59% had a formal, documented continuity plan; 33% had an informal, verbal plan; and 8% didn't have a plan at all. Of those with plans, only 19% of businesses had tested their plans.
Additionally, the survey found that 36% of midsize businesses had been unable to meet a client need due to an interruption in operations, putting the client relationship at risk. Of that 36% of businesses:
- 57% used an alternate supplier and avoided any direct impact on their clients
- 39% lost business to other suppliers but had clients return once their business resumed operations
- 9% lost clients that did not return
The survey also found that midsize businesses also need plans for supplier interruption. According to The Hartford, 84% of businesses surveyed rely on suppliers, vendors or consultants. Four in 10 had suffered a supplier interruption, and 32% had lost revenue due to a supplier problem.
See the infographic below for more information about midsize businesses and continuity planning. (Click image for full resolution.)