12-27-21 | Blog Post

How to Create a Business Impact Analysis

Blog Posts

What is a Business Impact Analysis (BIA)?

Physical damage to a building, destruction of machinery, or even an electrical power outage; what is your plan of action if any of these were to happen to your business? If you hesitated for even a second, it might be time to consider creating a business impact analysis. A business impact analysis, or BIA, helps you understand the effect a disaster can have on your business. With this information you will be able to develop a recovery strategy as well as a mitigation strategy to limit the impact of a disaster. Let us show you how to get started on your own BIA so that you can improve your disaster recovery (DR) plan and improve confidence.

Why Create a Business Impact Analysis (BIA)?

Creating a business impact analysis is an essential aspect to the development of a disaster recovery plan. After a BIA is completed, your organization will be able to better identify which operations are absolutely crucial to keep it running during an unexpected outage or event. When you understand these elements, it will allow you to strategically allocate resources, ensuring your business can run smoothly, even with an unexpected disaster. So far in 2018, there have been 6 weather and climate disasters resulting in mulit-billion dollar losses according to the NCEI, and they may not be what you expected. These disasters can happen anywhere, to anyone. Why roll the dice and take the chances of losing your business? Take the time and implement a proactive plan, such as a BIA and a DR Plan, and you can dramatically reduce the losses for your business.

How to Build a Business Impact Analysis (BIA)

The first step in creating a business impact analysis is to identify the operational impacts that a disruption could have on your business. Operational impacts are the effects of a disaster on a business’ operations, such as:

  • Compliance issues
  • regulatory fines
  • Loss of research data
  • Loss of faculty
  • Damage to Reputation
  • Lost or delayed sales and income
  • Customer dissatisfaction
  • Delay of executing business plans
  • Increased expenses

When determining lost or delayed sales due to a disaster, it’s important to account for periods of time that would have both the least, and the most impact on your business. For example, if you own a retail store, your profits may skyrocket during the holiday’s, but seemingly dry out in the New Year. Obviously, an interruption would have a much greater impact during these peak seasons, and showing an understanding of this is crucial to creating an effective BIA. When determining the duration of a particular interruption, you will want to identify  the maximum amount of downtime your business can experience before any major operational and financial impacts occur.

Once completed, you will want to quantify the financial impact of any operational failure. These numbers should be compared to the costs for possible recovery strategies.


As you begin to implement a BIA, make sure to organize the data correctly. To do this you can use several ready-made BIA templates or create your own excel sheet that shows the impact on both operations and finances as the amount of downtime increases.

No matter how tempting it may be to skip this step, keep in mind that the BIA is a precedent to the all-mighty business continuity plan. Both of these are considered essentials when it comes to the creation of a disaster recovery plan, meaning don’t relax just yet.

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