Disruptions like loss of talent, transport issues, or late customer payments put serious pressure on cash flow. And they are not rare. Over 43% of professionals said they’ve had 1 to 5 major disruptions in the past 12 months (BCI Supply Chain Resilience Report, 2023). In these moments, strong business continuity planning is what keeps operations up and running.
But as with any serious strategic initiative, this planning requires dedicated investments. They should not, ideally, come from regular operational expenses. That’s why businesses consider working with a factoring company, an often overlooked financial source.
Factoring lets businesses convert unpaid invoices into immediate cash to cover essential costs. Explore how it strengthens business continuity plans and helps grow despite financial challenges.
What Is Business Continuity Planning?
Business continuity planning (BCP) is the Plan B for ongoing operations. This practice outlines how your company will maintain operations during the crisis. Unlike risk management, BCP assumes that the worst will, indeed, happen.
Thanks to research, we know the most common bad things that happen to businesses every year. In 2023, for example, they were:
- Loss of talent/skills
- Human illness
- Transport network disruption
- Adverse weather
- Cyberattacks
For the next five years, supply chain professionals from all over the globe predicted:
- Increased cyberattacks and data breaches
- More weather-related disruptions and even natural disasters
- Scarce energy supplies and power outages
- Complex regulations and compliance
Business continuity planning takes all these threats and makes up detailed plans to fight them and save operations. The plans usually cover the four vital dimensions of every business (the four Ps): people, processes, premises, and providers.
Take a look at the typical example. If more than half of all customers don’t pay timely, a BCP might include factoring services to stabilize cash flow. The end goal is always the same: to minimize downtime and maintain critical functions so the business doesn’t come to a standstill.
On the surface, juggling immediate challenges seems to be the first priority for any business. But recent events like economic crises or the global pandemic have already taught us a few things. Planning big saves both large corporations and small businesses.
Importance of Business Continuity Planning
The worst can happen. In fact, it has happened multiple times recently, and top managers have started to accept it. In 2023, 60% of people said their top management became more committed to business continuity measures after the pandemic. Companies that shift to such a strategic attitude towards disruptions enjoy many perks, including:
1. Reduced Downtime
When disaster strikes, every minute of disruption costs money, or $9,000 per minute to be precise (Forbes, 2024). The top five negative consequences of such disruptions are:
- Increased cost of working
- Loss of revenue
- Loss of productivity
- Customer complaints
- Stakeholder concerns
All of these are things we don’t like to deal with as business owners. That’s why a BCP includes a clear roadmap that says exactly what to do next. It outlines response protocols, allocates key resources, and shows a fast transition to data backup systems or alternative work locations.
For example, good business continuity planning for manufacturers can shift production to another place within hours after a natural disaster. In contrast, businesses without a plan might face weeks of lost productivity.
2. Secured Critical Data and Assets
A strong BCP has information about all critical systems and what they contain. For every worst-case scenario, BCP has backup and redundancy measures to protect valuable assets and the data center.
Today, many companies struggle to afford data breaches and their consequences. But such measures as encrypted, off-site backups can restore operations faster. Without a BCP, recovery strategies could take days or, worse, result in permanent data loss and reputational damage.
3. Higher Trust from Customers & Partners
Speaking about reputation, companies with solid BCP are more likely to look good to their customers. They can maintain service levels and communicate proactively with customers in projected scenarios. Talking out to a company rep in the hardest times prevents much frustration and loss of trust, as well as bad reviews.
Focusing on trust also means accepting the new normal, where more than 50% of companies audit their partners’ supply chains before work. Plus, over 78% of companies discuss business continuity with their suppliers at the pre-contract stages. (BCI Supply Chain Resilience Report, 2023)
4. Total Compliance
New regulations may feel like a very distant future. Until we realize that there are already AI and drone regulations. BCP helps with both existing and potential rules. Prepared companies always show compliance, avoid penalties, and maintain necessary licenses.
The obvious piece of news, however, is that business continuity planning services aren’t free.
Factoring: A Key Part of Business Continuity Planning Solutions
BCP assumes expenses on people, tech, training, consulting, and more. These costs can strain your company’s finances, especially if cash flow is tight at the moment.
How Factoring Helps
Simply, factoring means selling your accounts receivable to a third party at a discount in exchange for immediate cash. Immediate cash brings immediate benefits because you can:
- Access funds fast without waiting for customers to pay
- Use the extra cash to invest in BCP resources
- Focus on developing and testing your BCP
Many companies find themselves stumbling when customers delay payments. Even without major disruptions, they can have a hard time covering payroll or paying suppliers.
But factoring isn’t just a lifeline for such situations. In 2025, it’s a widely adopted strategy across many industries. In the United States alone, businesses take over $170 billion in factoring. Among them are manufacturers, construction and logistics companies, healthcare providers, and IT services. (Grand View Research, 2024)
In case of a disruption, the first financial solution that comes to mind might be insurance. But as the companies’ feedback shows, insurers are not always willing to cover all the expenses. In a recent survey, people shared how much of their biggest incident this year was covered by insurance. Here’s what they said:
- 9.5% had all their losses covered
- 3.2% had most of their losses covered
- 4.0% had some of their losses covered
- 19.1% had about half of their losses covered
- 43.7% had only a small portion of their losses covered
- 15.1% had no insurance coverage
- Some people weren’t sure about their coverage
These numbers show that many people don’t have full insurance coverage for major incidents. Other findings say that many businesses face big gaps in their insurance coverage, especially for non-damage disruptions and exclusions related to COVID-19.
Let’s go through a quick BCP example and see where factoring stands in the process.
A business continuity plan to handle potential supply chain disruptions can look like this:
1. Risk Assessment
The company looks at possible issues; for example, it might identify a tier 1 supplier in a region with political instability.
2. Business Impact Analysis (BIA)
Then, they figure out which parts of the business are essential, such as sourcing raw materials or shipping products. They estimate that if a key supplier is out of the game, production could stop for two weeks. The estimated revenue loss is $500,000.
3. Planning for Continuity
The company develops strategies for business continuity planning. They include:
- Finding alternative suppliers
- Setting up backup routes
- Creating disaster recovery plans
4. Documenting Procedures
They also write down clear steps and the resources needed to maintain operations. These are a communication plan for stakeholders, an emergency response team with defined roles, and an inventory of critical spare parts.
The estimated budget for the strategy realization is somewhere between $15,000 and $50,000.
5. Testing
The company conducts drills to test the BCP. They simulate a scenario where a key supplier faces a production halt due to a natural disaster. Next, they evaluate their response time and ability to source alternative suppliers within 48 hours.
It’s a vital stage because 52% of companies prefer to check if their partners exercise their business continuity plans. (BCI Supply Chain Resilience Report, 2023)
6. Keeping the Plan Updated
Every six months, they review and update their BCP. Or they do emergency reviews after new risks, like emerging cyber threats or changes in international trade rules.
Each phase demands substantial resources. With factoring, however, they can convert outstanding invoices into immediate cash. Thus, they will get the liquidity needed to invest in BCP initiatives. There’s no dependency on operational funds.
As a result, factorings lets use more resources in mission-critical areas like tech upgrades, staff training, and consulting. At the same time, you get everything you need for business continuity risk management.
Strengthen Resilience with BCP and Factoring
Today’s world is unpredictable, and a solid BCP can add some stability to it. Identify potential risks, analyze their impact, and develop strategies to fight them. For a better effect, integrate factoring into your plan to get immediate cash flow whenever you need it. Why? To be better equipped to handle disruptions and continue serving your customers anytime.
Already developed a business continuity planning strategy and need urgent finances? Factoring companies in Florida are always ready to make it happen!
