[Matrix Moments] What is Business Continuity Plan and why has it become critical?

In the wake of the coronavirus pandemic, one of the most important factors that startup founders need to keep in mind is having a ‘Business Continuity Plan’ (BCP). In this episode of #MatrixMoments, we look at what is BCP and how startups can expedite recovery by following it.

[Matrix Moments] What is Business Continuity Plan and why has it become critical?

Saturday May 23, 2020,

4 min Read

The recent NASSCOM report came as a rude shock for the Indian startup ecosystem. With the report finding that close to 70 percent of startups have less than three months of cash runway to survive, conjuring a ‘Business Continuity Plan’ (BCP) has become critical. 

With different countries experiencing varied instances and stages of the community spread of COVID-19, the BCP prepares any startup to respond to business-critical needs.

In this episode of #MatrixMoments, we look at BCP as a range of scenarios that could negatively impact business, and the steps that need to be taken to minimise damage and expedite recovery.

Business Continuity Plan


Startups must begin with setting up a cross-functional task to help prepare for BCP. The plan usually covers – infrastructure, training needs for different functions, operations, and communication plans, in case there is office closure or a lockdown. Escalation alerts are needed depending on the magnitude of the situation. 

Identifying what is required from the different function heads

All Function Heads are required to share a function-wise BCP detailed document with founders. These will include – availability of equipment to enable easy work from home for all employees, tasks that will help with business as usual, tasks that will be affected but cannot be stopped, tasks that will be suspended, frequency of checking in with the team, actions to enhance the effectiveness of WFH, and estimated costs. 

Evaluation of the situation and ensure transparent communication 

In times like these, it is important to assess the situation on a day-to-day basis and monitor the threat levels in different locations. If the location where you are working becomes a hotspot, management needs to notify all employees in the location to declare an escalation alert, as defined above.

Work From Home Etiquette 

It would be fair to develop a detailed document, a playbook of sorts, that details out what is expected from your employees and their managers when they are working from home. You will need to specify – Is Work From Home (WFH) mandatory? Is my role discretionary in allowing Work from Home? Is my team equipped for WFH, managing productivity, etc?

Travel Advisory 

Ensure all events and travel is postponed and skipped. 

Interaction and onboarding 

Look at how most of the onboarding procedure can be conducted online seamlessly; all interviews can be conducted on Zoom, Hangouts etc. And this even includes vendor meetings. 

It is also important to lay out precautionary guidelines and protocols. All emergency contacts for the entire team have to be updated. If you are in a customer-facing role and are asked by the customers about the preparedness for coronavirus, please share the detailed action guidelines that have been disseminated, along with preventive measures taken. 

If a vendor tests positive, it is best to ensure that the vendor facility is quarantined and all services from the particular vendor are suspended temporarily. Choose a substitute vendor with immediate effect. A list of substitute vendors has been identified for all outsourced services, across all cities.

While these steps seem common and easy, a Business Continuity Plan helps organisations prepare for the worst, and also ensure that they can form the semblance of business as usual. Apart from this, try and communicate as much as possible with your employees. It is the one thing that will keep them motivated in times like these. 

Focus on collections

In case you have collections that need to be made, build a plan on how collections will be handled. The team needs to have a repository of who will be doing what kind of collections and how. Keep the communication channels and lines open 

Focus on liquidity 

How do you plan the cash reserves and how can you get them in these times? For example, a company can say: We will manage the liquidity of incoming cash to be raised through debt and profits of the company. As a thumb rule, the monthly deployment for the next three to six months will be the lower limit of ABC or the additional debt (net of repayments) raised in the previous months to fund growth. Hence, the following scenarios emerge for asset deployment for the next three to six months (tempered down basis the existing macro and health environment)


As revenue growth opportunities slow down in this environment, maintaining a check on employee costs and G&A, in addition to the control on credit costs, will be key to a healthy P&L.

While this is not an exhaustive list, these are a set of guidelines that startups can keep in mind in times of crisis. 

Know more about BCP here. 

Edited by Kanishk Singh