Business Continuity Planning Basics: A FEMA Ready Business Walkthrough

How a small or midsize business can build a first continuity plan with FEMA's free Ready Business materials, from impact analysis to tested recovery strategies.

Strategy Chaos · Last reviewed October 23, 2026 · 6 min read

When a fire, flood, power outage or supplier failure stops normal work, the middle of the crisis is the worst time to decide what matters most and how to keep it going. Making those decisions in advance, writing them down and practicing them is the heart of a business continuity plan.

You do not need a consultant or expensive software to start one. FEMA's Ready Business program, published on Ready.gov, offers free guidance, a fill-in plan template and exercise materials built for exactly this purpose.

This guide walks through the core pieces in plain terms, so a small or midsize business can produce a usable first plan.

Where continuity fits among your plans

Ready.gov describes several related plans, and it helps to keep them distinct:

An emergency response plan covers the first minutes of an incident: warning employees to evacuate, shelter or lock down, and calling for help. Ready.gov notes that "the actions taken in the initial minutes of an emergency are critical."
A crisis communications plan covers what you tell customers, employees, regulators and officials.
An IT disaster recovery plan restores hardware, applications and data. Ready.gov says it should be developed in conjunction with the business continuity plan.
The business continuity plan, which Ready.gov describes as a plan to manage a business disruption, sets out how you will keep or restore the functions that matter most.

The planning process at a glance

Ready.gov's business continuity training videos break the process into six steps:

Prepare to create the plan.
Define the plan's objectives.
Identify and prioritize potential risks and impacts.
Develop business continuity strategies.
Define teams and tasks.
Test the plan.

The rest of this guide follows that arc, focusing on the analysis that drives everything else.

Identify impacts: the business impact analysis

Ready.gov describes a business impact analysis, or BIA, as a way to predict the consequences of a disruption and gather the information needed to develop recovery strategies. It suggests considering scenarios such as:

Physical damage to a building
Damage to or breakdown of machinery, systems or equipment
Restricted access to a site or building
Interruption of the supply chain, including failure of a supplier
Utility outages, such as electrical power or water
Damage to, loss or corruption of information technology

For each, the BIA should identify operational and financial impacts. Ready.gov's list includes lost sales and income, delayed income, increased expenses such as overtime or expediting, regulatory fines, contractual penalties, customer dissatisfaction or defection, and delays to new business plans.

Timing matters. Ready.gov points out that a store damaged in the weeks before the holiday shopping season may lose a substantial share of its yearly sales, and that a power outage of a few minutes is a minor inconvenience while one lasting hours could cause significant losses.

To gather this information, Ready.gov recommends a BIA questionnaire for managers and others who know in detail how the business makes its products or delivers its services. The BIA report should document impacts, compare the cost of disruption with the cost of possible recovery strategies, and set the order for restoring functions, with the processes that have the greatest operational and financial impacts restored first.

The BIA also feeds your recovery targets. Ready.gov's business continuity plan template asks you to record two kinds:

Recovery time objectives for business processes and for information technology.
A recovery point objective for data restoration, which Ready.gov says the BIA should define after evaluating the potential for lost data.

Ready.gov's IT disaster recovery guidance adds that the recovery time for an IT resource should match the recovery time objective of the business function that depends on it. In other words, the business sets the deadline, and IT plans to meet it.

Develop recovery strategies and manual workarounds

Next, decide how you will hit those targets. The template has sections for detailed procedures, resources and logistics for each recovery strategy, for relocating to alternate worksites, and for recovering IT, including networks, servers, computers, wireless devices, applications and data.

It also has a section that small businesses often overlook: manual workarounds. The template asks you to "document all forms and resource requirements for all manual workarounds."

For example, imagine a hypothetical eight-person print shop whose order system goes down. A workaround might be a stack of preprinted paper order tickets, a printed price list, a laminated card with the card-reader backup procedure, and a named person responsible for entering the paper orders once systems return. None of this costs much, but it only works if it exists before the outage.

Organize teams and incident management

Ready.gov's sample organization chart puts a business continuity team lead over teams for information technology, production or process recovery, and support functions such as sales and customer service, human resources, facilities and legal. The template asks you to define roles and responsibilities, lines of authority, succession of management and delegation of authority, along with how you will work with contractors and vendors.

In a small business, one person may wear several of these hats. What matters is that everyone knows who decides, and who takes over if that person is unavailable.

The template also asks for incident management procedures, including:

Incident detection and reporting
Alerting and notifications
Activating the business continuity plan
Damage assessment and situation analysis
Developing and approving an incident action plan

Keep current contact details for team members and key vendors in the plan, and store a copy somewhere you can reach if your building or network is unavailable.

Test, train and maintain

A plan that has never been tried is a hypothesis. Ready.gov's training and testing guidance says that "tests should be conducted to validate that business continuity recovery strategies will work," and that training ensures everyone knows what to do when operations are disrupted.

The template lists orientation, tabletop and full-scale exercises, along with a testing schedule and procedures. Ready.gov also offers a Business Continuity Plan Situation Manual, Test Exercise Planner Instructions and a Facilitator and Evaluator Handbook to help run an exercise.

Finally, plan for upkeep. The template's program maintenance section calls for a schedule, triggers and assignments for periodic review, plus a corrective action program to fix problems that tests reveal. Note that Ready.gov says its older Business Continuity Planning Suite software is no longer supported or available for download, so use the current template and exercise documents instead.

Reduce the impact before it happens

Continuity planning works best alongside mitigation. Ready.gov's risk mitigation guidance suggests options such as uninterruptible power supplies and an emergency standby generator for critical equipment. It also describes insurance as financial mitigation: business interruption coverage reimburses profits and certain continuing expenses during a shutdown, and contingent business interruption coverage is available to reimburse losses caused by a supplier failure. Review your policies with your agent, broker or insurer to see what you actually have.

Key takeaways

A continuity plan keeps or restores your most important functions; it sits alongside emergency response, crisis communications and IT recovery plans.
Start with a business impact analysis to rank functions by operational and financial impact, including timing.
Set recovery time and recovery point objectives, and make IT recovery match business deadlines.
Document recovery strategies and simple manual workarounds before you need them.
Name decision-makers and backups, then test with tabletop exercises and update the plan on a schedule.

Sources

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