We previously posted articles on business succession planning strategies, but in the wake of the Covid19 pandemic, business continuity planning has become a hot topic. What is the difference between Business Succession Planning and Business Continuity Planning?
Business Continuity Planning applies to keeping a business sustained (and hopefully profitable) during a crisis period. It is a proactive measure to ensure services and/or goods can be provided without interruption, employees can still do their jobs and receive compensation, and invoices to vendors and suppliers can stay up-to-date. Disruptions to consider while brainstorming a plan include pandemics, cyberattacks, thefts and natural disasters. The planning process includes identifying the necessary resources (human, financial, etc.) that ensure continuity.
Business Succession Planning also considers these factors but is generally created from the perspective of owner transition due to death, disablement or retirement. Succession planning also considers subsequent leadership, training needed and other personnel or procedural changes. This strategy employs a gradual progression while a continuity plan typically goes into effect swiftly under exigent circumstances. Business Continuity Planning prevents a disaster from overtaking the business and causing it to fail. Business Succession Planning is a living document that outlines the transition of ownership to ensure continuity.
If you are a business owner and want to discuss either of these types of planning, contact Stouffer Legal at 443-470-3599 in the Greater Baltimore area.