What Is a Business Continuity Plan (BCP)? Your Complete 2026 Guide

If you’re starting a business, you need a plan for what happens when things go wrong. A business continuity plan helps you plan for how your business will maintain or quickly resume critical operations during a disruption. 

Today, the stakes are higher than ever. Roughly 20% of new businesses shut down within their first year. Yet, only about 49% of businesses worldwide have a documented business continuity plan. Even more concerning, many of those plans have never been tested to confirm that they would work in a real disruption.

For modern businesses, disruptions are a matter of when, not if. Cyber incidents, infrastructure outages, staffing shortages, and operational breakdowns hit faster than most teams expect. 

Ahead, learn how to limit damage when disruptions hit, turning what could be a disaster into a manageable interruption.

What is a business continuity plan (BCP)?

A business continuity plan (BCP) is a formal strategy that outlines how an organization will continue operating during and after a disruption. A BCP can come in different formats:

• A strategic document that guides organizations through crises.
• A set of predetermined instructions designed to sustain critical functions when normal operations fail.
• A comprehensive resilience framework that ensures business viability under adverse conditions.

At its core, a BCP identifies essential business processes, evaluates potential risks, and establishes clear recovery procedures to keep the organization stable and functional.

Business continuity plan vs. disaster recovery plan vs. contingency plan

A business continuity plan centers on what to do during the disruption—the Plan B for when things go awry. 

A disaster recovery plan, by contrast, focuses on the “return to normal” from an unexpected event. Disaster recovery is how you get back to Plan A.

A business contingency plan specifically focuses on the response to specific, unexpected events or emergencies that could negatively impact a company’s operations. For example, what happens if an ecommerce website’s servers go down during Black Friday Cyber Monday. 

That backup plan is the contingency plan. It’s a proactive strategy, detailing the steps a business will take in case of unforeseen circumstances to ensure it can continue to function or quickly resume critical operations. The plan includes identifying potential risks, assessing their impact, and developing specific actions to mitigate those risks.

Key components of a business continuity plan

A successful business continuity action plan includes the following elements:

• Scope and objectives. A BCP outlines the departments, functions, and locations it will cover. It also highlights the plan’s objectives, like minimizing downtime, protecting assets, and ensuring employee safety.
• Risk assessment. A thorough risk assessment identifies potential threats and vulnerabilities.
• Business impact analysis. A business impact analysis identifies the potential consequences of disruptions.
• Recovery strategies. A BCP highlights the recovery strategy for each critical function, focusing on the necessary resources, personnel, and technology needed to restore operations. It includes a company’s recovery time objective (RTO), or the maximum time IT systems can be down after a failure before irreparable damage occurs.
• Incident response plans. A BCP features detailed incident response plans that are specific to different disruptions and include communication protocols, roles and responsibilities, and emergency management procedures. It’s also helpful to include contact information for all important parties. 
• Training and awareness. A BCP isn’t complete without ensuring employees understand their roles and responsibilities within the business continuity action plan.

The benefits of a business continuity plan

A 2025 report by L2L shows that, on average, manufacturing-sector businesses lose around 360 hours of production annually to unplanned downtime. When you zoom out across industries—retail, logistics, health care, finance—the pattern is the same: interruptions stack up, costs accelerate, and recovery gets harder without a clear, structured plan.

A business continuity plan gives your organization a way to continue operating when unexpected disruptions strike. It helps you:

Reduce downtime

For every minute an employee can’t work, your business loses roughly 67¢ in wages. That number looks harmless on its own, but the impact compounds quickly. With an average of 15.3 minutes of downtime per employee per day, that’s $10.25 lost per person—every single day.

Let’s put that into perspective. A company with 100 employees burns through $1,025 daily in wages tied to downtime. Stretch that across a year and the total climbs past $250,000; and that’s before you account for missed deadlines, frustrated customers, or overtime needed to recover lost productivity.

In fact, for 90% of companies, a single hour of downtime now costs more than $300,000, and 41% of large enterprises report losses between $1 million and $5 million per hour.

Protect critical data and assets

Outages, cyberattacks, and system failures can interrupt operations, but the real damage often comes from corrupted files, inaccessible systems, or missing transaction records.

A business continuity plan protects your data and your hard assets by defining how information is backed up, where it’s stored, and how quickly it can be restored. It outlines recovery point objectives (RPOs) and recovery time objectives (RTOs) so teams know what must come back online first, and how long critical systems can be offline before operational or financial damage becomes unacceptable.

Build customer trust

Recent consumer surveys show that after a data breach or outage, nearly six in 10 customers lose trust in the brand, and seven in 10 say they would stop shopping there.

How a company responds to a crisis can make or break its customer relationships. A BCP helps you maintain service levels during disruptions and communicate proactively with clients so you can continue to meet and exceed customer expectations.

For example, an ecommerce brand with a BCP might be able to reroute traffic to backup servers during a distributed denial of service (DDoS) attack so customers can continue shopping. 

Ensure compliance

Regulatory frameworks increasingly require businesses to prove they can safeguard data, maintain critical operations, and respond quickly to disruptions. A business continuity plan helps you stay compliant and audit-ready across a range of standards.

• For payment processors, PCI DSS mandates documented incident response and recovery measures to protect cardholder data. 
• In health care, HIPAA requires contingency plans, secure backups, emergency access procedures, and rapid data restoration capabilities to ensure patient information remains available and uncompromised. 
• Financial institutions must meet Sarbanes-Oxley Act, SEC, and FFIEC guidelines, which demand operational resilience, transparent controls, and evidence of tested continuity procedures. 
• Internationally, ISO 22301 sets the benchmark for business continuity management systems and is increasingly adopted by companies that need to demonstrate resilience to global partners or regulators.

A well-structured BCP centralizes documentation and clarifies responsibilities.

How to create an effective business continuity plan

The following business continuity plan steps walk you through assessing risks, prioritizing critical functions, building recovery strategies, and testing your plan.

1. Identify your biggest risks

What are the biggest threats to your business? In what ways is your business currently vulnerable? The answer will vary depending on the nature of your business. 

For example, if you run a small software company, you’re likely going to be more concerned with server disruptions than a brick-and-mortar candle shop that gets a small fraction of its revenue from online sales. 

The most common business risks or threats include:

• Natural disasters, fires, and power outages
• Public-health crises
• Cyberattacks or terrorism
• Data loss
• Economic downturns
• Bankruptcy, bad credit, or cash-flow issues
• Legal disputes, government regulations, and licensing cancellations
• Workplace accidents
• Technology failures, including platform or point-of-sale (POS) system crashes

The most at-risk assets include:

• People
• Inventory
• Company property
• Brand trust and customer relationships
• Licensing agreements
• Data centers
• IT infrastructure
• Supply chain

You can identify the most pressing risks to your business by modeling future scenarios. Or you could focus on preventing a specific type of disaster you’ve already experienced, while still reflecting on others that could disrupt operations.

2. Identify your most at-risk business functions

Once you’ve mapped the risks most likely to affect your business, the next step is identifying which functions those risks would disrupt. Some functions sit fully under your control; others may depend on outsourced partners like payment processors, ecommerce platforms, third-party logistics providers (3PLs), or manufacturers. Every point of dependency adds a point of vulnerability, which is why understanding these relationships is essential.

A useful approach is to classify each business function by priority level:

• A-level functions: Must stay operational or be restored immediately; if these fail, the business cannot function.
• B-level functions: Important but not immediately mission-critical; temporary workarounds exist.
• C-level functions: Low urgency; can pause without immediate revenue or customer-experience impact.

For an ecommerce business, these categories might look like:

• A level:
• Payment processing (orders can’t be captured without it)
• Order fulfillment and warehouse/3PL operations
• Inventory management data
• Customer support channels (email, chat, social media DMs)
• Website uptime and checkout flow
  
  
• B level:
• Marketing automations (email flows, SMS triggers)
• Product photography or creative production
• Analytics dashboards
  
  
• C level:
• Blog publishing
• Brand design updates
• Internal reporting tasks not tied to daily operations

Once you know which functions fall into A, B, or C, you can prioritize resources accordingly. 

A-level functions should have redundancies, clear recovery procedures, and defined owners. B- and C-level functions may still need backups, but you can allocate fewer resources and accept longer recovery times.

3. Establish tasks

Before picking colleagues to help execute your business continuity plan, create a set of responsibilities to assign. Responsibilities could include:

• Business continuity steering. These individuals have specialties in various aspects of your business and can catalog all potential risks or assets in the business continuity plan. After you create the plan, these individuals should meet quarterly to assess the plan for accuracy and ensure company-wide knowledge of it.
• Business continuity management. Manages the daily responsibilities of the business continuity plan, such as training, crisis management, safety assessments, and expectation setting with business leaders and those on the business continuity team.
• Business continuity wrangling. Rally others to execute instructions directly from the business continuity plan to rollout the tasks needed.

The number of stakeholders and providers you need to do these tasks varies based on the size of your business. Note that having more than eight responsible people may slow down the process of shipping a complete business continuity plan, so keep this in mind when you’re in the planning phase. 

Backup stakeholders can be helpful for transitory periods, such as an employee exit, a change in leadership, or a merger.

4. Detail actions for each vulnerability in your continuity plan

Once you have a list of potential fixes, structure them into if-then statements, with a list of potential solutions. A continuity plan for a server crash might look something like this:

If our server is down during a holiday weekend sale, then we can continue to increase our revenue by:

• Directing our email audience to our online store’s app, since it is hosted in the cloud
• Selling products via social media platforms, such as Instagram

You may also want to start thinking about a recovery plan: how to get back to “normal” or avoid another crisis. Did your BCP include a backup server hosted in the cloud? If so, you can revert to a time prior to the server crash. 

Will you need a merchant cash advance or loan to keep operations running? In this example, the outcome may be to upgrade your hosting solution or switch to a platform that includes hosting.

5. Set mandatory training timelines

Once you have a plan for addressing issues as they arise, train stakeholders and/or employees to ensure alignment. You can train employees when they’re first hired and include quarterly drills thereafter.

While not central to business continuity planning, consider training all employees in fire safety, CPR, and other health and safety risks. The best-case scenario always remains not needing your continuity plan.

6. Identify potential preventative measures

After creating your plan, note the primary vulnerabilities in your business. For example, you may feel most vulnerable about your dependency on a single third-party manufacturer. In this case, you might research other options to diversify your manufacturing partners. 

7. Implement preventative controls

The next step is putting preventative controls in place: measures that reduce the likelihood of a disruption or limit its impact before it spreads. 

Preventative controls fall into a few core categories:

• Technical safeguards. These include data backups, redundant servers, network monitoring, multifactor authentication, automated patching, and intrusion detection systems. They reduce the risk of data loss, corrupted files, or ransomware attacks—common triggers for downtime.
• Operational safeguards. These include standardized procedures, quality checks with manufacturers, inventory-accuracy controls, and backup fulfillment workflows. For ecommerce businesses, this might include diversifying 3PL providers or maintaining safety stock for high-volume stock-keeping units (SKUs).
• Physical safeguards. These include secure access controls, hardware maintenance schedules, environmental protections (temperature, humidity), and equipment redundancy for operations that depend on physical infrastructure.
• Vendor and partner safeguards. These include SLAs with minimum uptime commitments, backup logistics routes, alternative payment gateways, or pre-approved secondary suppliers. Every external dependency should have a documented contingency plan.

8. Ask for feedback

Asking for feedback from stakeholders throughout the company can ensure there aren’t any missing gaps. The goal is to create a detailed plan that takes into account all potential risks and explains how to continue business operations despite them.

Business continuity plan template

👉Here’s a business continuity plan example template from Ready.gov, an official website of the US Department of Homeland Security. 

When choosing or adapting a template, look for one that gives you enough structure to stay organized but enough flexibility to reflect how your business actually operates. At minimum, a strong BCP template should include:

• Executive summary
• Risk assessment and business impact analysis
• Critical functions and priority levels
• Recovery strategies for people, systems, and operations
• Communication plans for employees, customers, and partners
• Roles and responsibilities
• Testing and maintenance procedures

You’ll also want to check that the template aligns with any industry-specific regulations your business must follow. 

Business continuity plan examples

Here are a few examples of how an ecommerce business might activate its business continuity plan during different types of disruptions:

Payment gateway outage during peak sales

Risk: Your primary payment processor goes down during a holiday promotion, stopping all new orders.

BCP response:

• Automatically switch to backup payment gateways already integrated in your checkout.
• Trigger prewritten customer messaging across email, SMS, and on-site banners.
• Pause paid campaigns to prevent wasted spend until the issue is resolved.
• Finance and ops teams monitor sales impact through a predefined dashboard.

Outcome: Sales continue through alternative processors, customer frustration stays low, and the outage has limited financial impact.

Social media account hack during an active campaign

Risk: Your primary social channel (e.g., Instagram or TikTok) is compromised, and malicious content is posted.

BCP response:

• Immediately lock down access through your crisis-access protocol.
• Notify customers through verified channels (email, website banner, SMS) with a prepared message.
• Engage platform support using pre-established escalation routes.
• Shift paid social spend temporarily to alternate platforms until account control is regained.

Outcome: Customers aren’t misled, harmful content is contained, and campaign momentum is preserved.

3PL warehouse shutdown or delayed fulfillment

Risk: Your main warehouse experiences a staffing shortage, weather event, or system outage that halts fulfillment.

BCP response:

• Reroute priority SKUs to a secondary fulfillment partner with pre-negotiated SLAs.
• Activate safety stock protocols for bestsellers stored in a secondary location.
• Update shipping estimates on-site and via automated order notifications.
• Customer service uses templated scripts to manage expectations and reduce ticket volume.

Outcome: Orders continue shipping, delays are minimized, and customers stay informed.

Testing your business continuity plan

You’ve worked hard to create a business continuity plan, but your job isn’t done yet. Your BCP is a living document that needs regular check-ins to stay effective. Here are factors to consider as you test and maintain your BCP:

Test your BCP using scenarios

Scenario-based testing reveals how your systems, people, and processes hold up under pressure.

There are several proven approaches:

• Tabletop exercises. Team members walk through a hypothetical scenario in a low-pressure setting to validate assumptions, clarify responsibilities, and surface blind spots.
• Walk-throughs. Departments review their specific procedures step by step to ensure documentation matches real-world workflows
• Functional drills. Teams test individual components (like switching to a backup payment processor or restoring from a data backup) without simulating a full outage.
• Full-scale simulations. Realistic, high-intensity tests that replicate an actual disruption and measure how well the organization performs under true operational stress.

After each test, conduct a structured debrief to capture what actually happened. Your review should focus on:

• Gaps or weaknesses in the plan. Where did the process break down?
• Communication flow. Did alerts reach everyone who needed them, and on time?
• Response times. How quickly were critical functions restored?
• RTO performance. Did you meet the recovery time objectives you set?
• Participant feedback. What parts of the process felt smooth? What felt confusing? Does anything require rewriting or retraining?

Frequency of testing

The timing of testing a BCP depends on your organization’s size and complexity. Generally speaking, small businesses should aim to test at least once a year. Every business should do an annual review to make sure everything is up to date, and a business should plan to do a review when a business goes through a material change (like a new product launch, leadership change, or service changes).

Industries where business operations change at a fast pace and business-critical systems need constant support might consider testing every quarter. The goal is to find a balance that keeps your team prepared for a possible looming crisis without overwhelming your team. 

Engaging key stakeholders

For the best testing results, bring the right colleagues together. Key stakeholders often include: 

• Management team members
• IT department representatives
• Department heads
• External vendors or partners

Make sure all aspects of your business are represented. Having a plan in place and keeping stakeholders apprised of annual reviews will help prime colleagues to implement the BCP during a real disruption. 

Updating the plan based on test outcomes

After analyzing your test results, it’s time to turn those insights into action. Review any procedures that didn’t work as expected during the test. Modify any unclear steps and add detail to any procedures that cause confusion. 

Compare actual recovery times from the test against your established RTOs. If RTOs weren’t met, investigate the reasons and adjust either the objectives or the recovery processes. You’ll also want to update contact information for key personnel and incorporate any new business processes or technologies that could have helped.

When to develop and implement a business continuity plan

Key moments to consider developing or updating a BCP include:

• Business expansion. When your organization expands its operations—by adding new locations, products, or services—update the BCP to accommodate these changes.
• Technological advancements. As you incorporate new technology or significantly upgrade existing tech, revise the BCP to address potential vulnerabilities and ensure the continuity of operations.
• Changes in leadership or key personnel. When there are significant changes in leadership or key personnel, update the BCP to reflect new roles and responsibilities and update contact information.
• New regulations or industry standards. As new regulations and industry standards are introduced, review and update your BCP to ensure compliance.

Invest in business continuity management

Outside factors can hobble business performance and customer trust. By creating a business plan ahead and thinking through the risks carefully, you can reduce the impact crises have on your business. 

With the business continuity planning process above, you can improve risk management and protect your business’s critical systems for years to come.