Before you can begin making any specific plans to handle a major event which threatens your firm’s capacity to do business, an analysis of the threats and hazards in the environment needs to be put together. This first step is known as a risk assessment.
It details the hazards that have the potential to damage your ability to provide your products and services in a timely fashion.
Some possible major risks could include
Loss of key personnel
Labor disputes or strikes
Natural disasters such as floods, hurricanes, earthquakes, wildfires, etc.
It is also important to keep in mind that any of these above risks could attack a link in your supply chain, which could be just as debilitating as if the event directly hit your business.
Because of the strong reliance on just-in-time inventories and lengthy supply chains, the risks are multiplied out beyond just what affects your own physical locations.
Once you have identified all of the risks in the environment, the next step is to identify how these events, alone or in combination, would impact your business. Risk assessment is the necessary first step in developing any comprehensive business continuity plan.
It is also an excellent exercise in awakening a firm’s leadership to the vulnerabilities they may have been hoping to ignore.