BCP Value Calculator

Just how much is a Business Continuity Program worth to a company? This tool, which uses the method described in the articles How Much is a Business Continuity Plan Worth (Part 1) and How Much is a Business Continuity Plan Worth (Part 2) is subject to the various simplifying assumptions described below.

Input Data

Results

Based on the information given above (and the assumptions below), the value of the company or business unit without a Business Continuity Program in place is $8,398,045. The value with a Business Continuity Program in place is $9,309,401. The value of the Business Continuity Program is therefore $911,356.

Assumptions

The following assumptions were made:

• The value of your company (or business unit) is the value of the income stream it produces. The valuation is not based on market sentiment or today's share price.
• All earnings are paid out as a dividend: retained earnings aren't lost if the company fails.
• Your company has a probability of failure which can be reduced by the introduction of a Business Continuity Plan or Business Continuity Program.
• If your company (or business unit) does fail there is no residual value (or liability).
• The rate of inflation is constant.
• The rate of growth in earnings is constant.
• The probability of failure is constant. Note that for start-ups, a realistic probability of failure (from all causes) in the first few years may be as high as 27% per annum.

Need different Assumptions?

If you need these figures calculated using different assumptions (e.g. residual value of assets, complex or changing income, growth or interest rate scenarios), please contact me, Michael Bell, using the contact form.

Comments?

I'm always interested in people's comments. If you have any comments on the method used, please drop me a line using the contact form on this website.

© Albion Research Ltd. 2010