Given that I am an independent consultant, is it really necessary to have a formal business continuity plan?
This all depends on what you mean by a business continuity plan. Traditionally such a plan is created to manage an organization through a disaster such as a fire, earthquake or other unusual and catastrophic event. This is the old "disaster recovery plan," which has been expanded to accommodate more organizational components (than just saving financial or data records) and more preparation and even training. The goal is to minimize the disruption to the business in the event of a disaster.
As a solo practitioner, your systems are likely to be fairly simple and a formal plan may be overkill. Conversely, many small businesses have quite a few systems or assets to protect and operations to provide for. You may have computer files that call for offsite backup, ongoing client communications that need redundancy, a base of operations in which to work during recovery, etc. Being small doesn't mean you don't need planning, it just means the scale of response may not be as big as for a bigger business.
Furthermore, there are hazards you face that larger businesses do not. Illness of the entire staff (you) is little different from the impact of pandemic flu keeping a company's whole workforce off the job. Your business may be less complex but there is greater risk of entire systems being compromised, such as when your laptop (the company's entire IT department) gets flooded when a pipe bursts. Tip:
Make a list of your critical systems and a list of what is the worst (and second and third worst) things that could happen to compromise them. How will you market and deliver services to your clients under each of these situations? What can you do to both prevent their occurrence and speed up response and recovery? Maybe it's not a formal plan, but at least you will have thought this through. Ask to see a friend's plan and see what each of you have missed. © 2011 Institute of Management Consultants USA