If you want your business to stay resilient when things go wrong, two tools are essential: Business Impact Analysis (BIA) and Risk Assessment. They sound similar, and they’re often mentioned together, but they do very different jobs.
Understanding the difference helps you plan smarter and avoid gaps in your continuity strategy.
Think of BIA as answering the question:
“If this part of my business stops, what happens—and how quickly do I need it back?”
A BIA looks at the consequences of disruption. It assumes worst-case scenarios and measures how much damage downtime could cause—financially, operationally, and even reputationally. It helps you:
Example: If your online ordering system goes down, how much revenue do you lose per hour? How long before customers start leaving?
Risk Assessment answers a different question:
“What could go wrong, how likely is it, and what can we do to prevent or reduce the impact?”
It looks at potential threats—like cyberattacks, supply chain failures, or severe weather—and evaluates both their likelihood and impact. From there, you decide how to manage those risks, whether that’s adding security controls, finding backup suppliers, or improving processes.
Here’s a simple way to picture it:
You can do a BIA without a Risk Assessment, but not the other way around. Why? Because risk assessment needs impact data to prioritise risks. If you don’t know which processes are most critical, you can’t decide which risks matter most.
Together, they give you a complete picture:
Resilience isn’t about predicting every possible disaster—it’s about knowing what’s critical and planning for the things most likely to go wrong. BIA and Risk Assessment are two sides of the same coin. Get them right, and you’ll have a strong foundation for keeping your business running, whatever happens.
1. What’s the main difference between Business Impact Analysis and Risk Assessment?
2. Do I need both for my business?
Yes. BIA tells you what’s critical; Risk Assessment tells you what could threaten it. Together, they give you a complete picture for planning.
3. Which should I do first?
Start with a BIA. You need to know which services are most important before you can prioritise risks.
4. How often should I review them?
At least once a year, or whenever your business changes significantly—new systems, new suppliers, or major growth.
5. Can a small business do this without hiring consultants?
Absolutely. Start simple:
6. What’s an example of BIA in action?
If your payment system goes down, how much revenue do you lose per hour? How long before customers leave? That’s BIA.
7. What’s an example of Risk Assessment in action?
Looking at what could cause that payment system outage—cyberattack, server failure, or supplier issue—and deciding how to prevent or mitigate it.
8. Do these need to be complicated?
No. Even a simple version can make your business far more resilient. The key is clarity and action, not paperwork.