When unexpected disruptions strike your business – whether from natural disasters, economic downturns, or unforeseen emergencies – having a solid business continuity plan can mean the difference between weathering the storm and closing your doors permanently.

The statistics are sobering: 40% of small businesses never reopen after a natural disaster, and another 25% close permanently within one year.¹ As a business law attorney serving Northeast Connecticut for over two decades, I’ve guided countless business owners through both planned transitions and unexpected crises.

Let me walk you through the essential steps to protect your business and ensure it can continue serving your community, no matter what challenges arise.

Understanding Business Continuity Planning

A business continuity plan is your roadmap for maintaining operations during and after a significant disruption. Think of it as your business insurance policy that goes beyond financial coverage—it addresses how your company will continue functioning when normal operations are impossible.

Many business owners I work with initially feel overwhelmed by the prospect of creating such a plan. I understand that concern. However, breaking the process down into manageable steps makes it far more approachable, and the peace of mind it provides is invaluable.

Why Your Connecticut Business Needs a Continuity Plan

Connecticut is home to 354,013 small businesses that employ nearly half the state’s workforce.² Northeast Connecticut businesses face unique challenges, from harsh winter storms that can shut down operations for days to economic fluctuations that affect our local market.

Recent events underscore this reality—severe storms, flooding, landslides and mudslides on August 18-19, 2024, impacted multiple Connecticut counties including Fairfield, Hartford, Litchfield, Middlesex and New Haven.³

Downtime costs small businesses $10,000 per hour on average, and 75% of organizations without a business continuity plan fail within three years of a major disruption.¹

Beyond practical preparedness, having a documented continuity plan demonstrates responsibility to your clients, employees, and business partners. It shows you’re thinking ahead and committed to serving your community long-term, even during difficult circumstances.

Connecticut’s Disaster Recovery Resources

Connecticut businesses have access to valuable disaster recovery resources that can help during challenging times. The Small Business Administration offers Economic Injury Disaster Loans up to $2 million for working capital needs caused by disasters, with interest rates as low as 4% for businesses and 3.25% for nonprofit organizations. These loans feature terms up to 30 years, and interest doesn’t begin to accrue until 12 months from the initial disbursement date.⁴

However, accessing these resources requires preparedness. Having a business continuity plan in place means you can quickly document your losses, demonstrate your business’s viability, and access funds when you need them most.

Step 1: Conduct a Business Impact Analysis

Start by identifying which business functions are absolutely critical to your operations. Ask yourself what activities must continue, even in a limited capacity, for your business to survive.

For each critical function, determine how long your business can operate without it. A retail shop might survive a few days without its point-of-sale system by processing manual transactions, but a week without inventory could be devastating. Recent research shows that 90% of mid-sized and large enterprises lose upwards of $300,000 per hour of downtime, while smaller organizations can lose more than $25,000 per hour.⁵ Understanding these timeframes helps you prioritize your recovery efforts.

Document the resources each critical function requires, including specific employees, technology, equipment, suppliers, and locations. This inventory becomes essential when you need to make quick decisions during an actual emergency.

Step 2: Identify Potential Threats and Risks

Consider the various disruptions that could affect your Connecticut business. Natural disasters like blizzards, hurricanes, and flooding are real concerns in our region. Power outages, especially during winter storms, can halt operations for extended periods.

While natural disasters get the big headlines, research shows that only 5% of business downtime is caused by natural disasters—most operational disruption comes from everyday threats like human error, hardware failure, and cybersecurity incidents. In fact, 59% of organizations experienced at least one ransomware attack in the last year.⁶

Beyond weather-related issues and cyber threats, think about technology failures, supply chain disruptions, key employee departures, economic downturns, and public health emergencies. Recent years have shown us how quickly circumstances can change, making comprehensive risk assessment more important than ever.

For each potential threat, evaluate its likelihood and potential impact on your business. This assessment helps you focus your planning efforts where they matter most.

Step 3: Develop Recovery Strategies

For each critical business function you identified, create specific strategies for maintaining or quickly restoring that function during a disruption. These strategies should be practical and tailored to your specific business needs.

Consider alternative work arrangements. Can employees work remotely? Do you have backup locations where operations could continue? Identify backup suppliers and service providers who could step in if your primary vendors are unavailable.

Establish clear communication protocols for reaching employees, customers, and suppliers during emergencies. In our increasingly digital world, having multiple communication channels—phone, email, text, and social media—ensures you can stay connected even when some systems fail.

Step 4: Document Your Plan Thoroughly

Your business continuity plan should be a written document that anyone in your organization can follow. Include emergency contact information for all key personnel, vendors, customers, and emergency services.

Detail your step-by-step procedures for responding to different types of disruptions. These procedures should be clear enough that someone unfamiliar with your usual operations could follow them and keep essential functions running.

Document where critical information is stored and how to access it during an emergency. This includes financial records, customer data, supplier contracts, and employee information. Consider both physical and digital storage, with appropriate backup systems.

Step 5: Address Legal and Tax Considerations

Review your existing insurance coverage to ensure it aligns with your continuity plan. Business interruption insurance, property insurance, liability coverage, and cyber insurance all play important roles in your overall protection strategy.

Examine your contracts with customers, suppliers, and landlords for force majeure clauses and other provisions that address disruptions to normal operations. Understanding these contractual obligations before a crisis occurs helps you respond appropriately and maintain good business relationships.

Consider the legal structure of your business and whether it provides adequate protection. Some business structures offer better liability protection during challenging times than others.

Connecticut Tax Compliance Considerations

When developing your continuity plan, ensure you can maintain compliance with Connecticut’s tax requirements even during disruptions. Connecticut businesses must file various tax returns throughout the year, including quarterly estimated tax payments due by the 15th day of the third, sixth, ninth, and 12th months of the tax year.⁷

Connecticut LLCs must file an annual report by March 31 each year with an $80 filing fee, confirming or updating registered agent information and NAICS codes.⁸ Your continuity plan should address how you’ll meet these ongoing compliance obligations even when normal operations are disrupted.

Businesses with employees must withhold Connecticut income tax and file quarterly returns, while also maintaining unemployment insurance obligations.⁷ Document in your plan how payroll and tax withholding will continue during disruptions, as failure to meet these obligations can result in penalties and interest charges.

Step 6: Create a Communication Strategy

Develop templates for different types of emergency communications. Having pre-drafted messages that you can quickly customize saves precious time during actual emergencies and ensures you communicate clearly when stress levels are high.

Identify who will serve as your primary spokesperson during a crisis and establish a clear chain of command for decision-making when normal leadership is unavailable.

Your communication strategy should address both internal communications with employees and external communications with customers, suppliers, and the broader community. Transparency and regular updates build trust, even during difficult circumstances.

Step 7: Train Your Team and Test Your Plan

Your business continuity plan only works if your team knows it exists and understands their roles within it. Conduct regular training sessions to familiarize employees with emergency procedures and their specific responsibilities.

It’s recommended to test your business continuity plan every quarter, or four times a year, through either table-top exercises where your team reviews the plan, or structured walk-throughs using the plan to respond to hypothetical disasters.⁹

After each drill or actual emergency, conduct a review to identify what worked well and what needs improvement. Your plan should be a living document that evolves with your business and incorporates lessons learned.

Step 8: Maintain and Update Your Plan Regularly

Set a schedule for reviewing and updating your business continuity plan at least annually, or whenever significant changes occur in your business operations, location, key personnel, or supplier relationships.

As your business grows and evolves, your continuity plan must grow with it. New technology, different service offerings, additional locations, or changes in your industry all warrant plan updates.

Keep both digital and physical copies of your plan in multiple secure locations. Ensure key personnel always have access to the most current version.

Building Resilience for Long-Term Success

Creating a comprehensive business continuity plan demonstrates the same forward-thinking approach that builds successful businesses. It protects not just your financial investment but also your employees’ livelihoods and your ability to continue serving your community.

While 60% of business owners believe they can resume operations within a day after a disaster, only 35% actually manage to do so.¹ I’ve seen firsthand how businesses with solid continuity plans navigate crises with greater confidence and emerge stronger on the other side. They experience less disruption, maintain better relationships with customers and suppliers, and recover more quickly than competitors who failed to plan ahead.

Partner with Legal Guidance

While you can begin developing your business continuity plan on your own, working with an attorney who understands both business law and your local business environment adds significant value. I can help ensure your plan addresses important legal considerations, aligns with your existing contracts and business structure, and provides the comprehensive protection your business deserves.

Together, we can review your current operations, identify vulnerabilities, develop practical strategies, and create documentation that serves your business well for years to come. My goal is to help you build a resilient business that can weather any storm while continuing to serve Northeast Connecticut.

Ready to protect your business with a comprehensive continuity plan? Get in touch now to schedule a consultation. Let’s work together to ensure your business thrives, no matter what challenges lie ahead.