In light of recent natural disasters in the U.S. and around the world, I thought a moment to reflect on survival was appropriate.
Are you prepared for any business disruption that may occur?
If you answered no, then you are among the estimated 40% of businesses that will fail due to a disaster; either human or natural.
“Businesses that plan for disaster before it strikes generally have less damage, less economic loss, and less downtime than those that do not prepare” according to government experts at FEMA.
Businesses should consider several elements when preparing for disaster:
1. Protect your staff.
2. Protect your building.
3. Protect your data.
4. Protect your inventory.
A critical step is to prepare a plan that will continue your business operations in case almost everything is destroyed. Good planning includes provisions to relocate to a previously identified site, retrieving data – including employee, customer, and vendor records, and the ability to operate efficiently with a small staff of key individuals.
Another critical step of any business recovery plan should be to ensure you have acquired enough insurance to cover loss and damage in the event of a catastrophe.
“One of the benchmarks of a community’s recovery after disaster is the number of businesses that are back in operation.” According to FEMA, “businesses that prepare an effective disaster plan, including a plan to continue operation in the aftermath of destruction, will contribute the most to the community’s recovery.”
The basics of disaster recovery planning are:
STEP ONE: Identify the hazards your business faces.
STEP TWO: Identify how vulnerable you are using a vulnerability assessment. This will help identify the threat your business faces and help you prepare your disaster plan.
STEP THREE: The business preparedness plan.
Resources available on the Internet are an excellent way to help you identify the hazards faced by businesses similar to yours, including identifying vulnerabilities and may help prepare your business through planning and guidance to face any disaster; natural or otherwise.
Monkey See – Monkey Do:
Most large businesses have disaster recovery plans in place. Just because you are a small business does not mean you can skip this important step in business planning. It is estimated that some 40% of small businesses close because of disasters. Even the less dramatic disasters that are more common, such as fire, power outages, and technological disasters like computer crashes can cause a business to fail if that business has no recovery plan in place.
Take a hard look at your business and its risk. Decide, what are the most likely disasters and what are critical functions that need to continue operating after that disaster has taken place. You should not only plan for the disruption of your business but also for the disruption of your supply chains, such as if your vendors are suddenly unable to provide the things you need to run your business.
Here are some steps that you can take to protect your business in the event of crisis:
Protect the people:
Look at the interior and exterior of your business. Consider its security, and consider how vulnerable the contents of your business are. Make a list of employees who know first aid or CPR or have emergency training or who can assist in the evacuation of employees and customers from your business. Make sure you maintain an up-to-date 24-hour contact list for all your employees that include their addresses and phone numbers. Arrange for two way radios pagers or text messaging, if the phone system should fail. Keep flashlights, first-aid materials, an AM/FM radio, extra batteries and nonperishable food items on hand and have a least 1 gallon of water available per person, per day.
Protecting property:
Backup. Backup. Backup. You cannot be expected to recover if you cannot access the information you need to run your business. Backing up your data and the information for your business IS CRITICAL. You should already backup your data on a daily or weekly basis. Moving this backup to a safe location is the next consideration.
* Snail-mail a copy of your backup to a trusted friend or relative in another city.
* Backup using a subscription service online.
* Backup using a hard drive that is then stored in a safety deposit box.
* At the very minimum, keep photocopies or scanned copies of imported paper documents like licenses and insurance policies, away from your place of business, and make sure you have adequate insurance coverage to help speed your insurance claims.
And one more thing…
Cover Your Ass(ets) or C.Y.A. as it’s more affectionately called, is always a good thing. Make sure you adhere to the letter of the law when it comes to protecting personal information from anyone involved in your business; from staff to customers. They have rights and they have laws to protect them from irresponsible employers and businesses.
Privacy and security is very important and it’s equally important that you be a responsible business-owner and protect those rights. And don’t forget, in the U.S.; it’s the LAW!
Keep your business running:
Consider alternate vendors from a different geographic area in case your main vendor is out of commission. Plan an alternate business site. This could be your home, the home of an out-of-town relative, or it could be the site of a similar business to yours that you develop a mutual aid agreement with. Keep a list of emergency contact names and numbers of key customers and keep them informed of the status of their orders.
Is your business prepared?
Ask yourself these questions and it should help you assess whether your business is prepared for a large disaster such as an earthquake or hurricane or a small disaster like a computer crash or fire.
- Have you determined what parts of your business need to be operational as soon as possible after disaster? How do you plan to resume these operations?
- Do you and your employees have a disaster response plan to assure your safety and take care of yourselves until help arrives?
- Are you able to communicate with your employees and key customers after normal business hours?
- Can your building withstand the impact of a natural disaster and is your data and information sufficiently protected?
- Are your files and records such as your human resources records protected?
- Are you prepared to stay open for business if your vendors are inaccessible or if basic needs cannot be found such as electricity and water?
- Do you have a plan in place to continue your operations even if you can’t reach your place of business?
- Have you consulted with an insurance agency to ensure your coverage is adequate to help you get back on your feet as a result of a disaster?
These questions are all necessary and can help you realize if you’re prepared or not for a crisis that may disrupt your business.
If you answered no to one or more of these questions, then perhaps you should start investigating how you and your business will recover after a disaster strikes.
A final thought…
Protect your reputation.
All of the above advice will go far to protect you and your businesses reputation in the face of crisis. How fast you are back up and running will go to great lengths in showing your community, your peers (and competitors), and your customers that you can handle crisis and prevail.
All too often however, businesses tend to forget the little things like reputation. Reputation takes a lot of resources to build but can be destroyed quickly and at little or no cost. That being said, lest we forget that a devastating business crisis can also include product issues, scandals, bad press, poor service, pissed-off customers and angry former employees.
You would be wise to figure out early in the game how you as an owner and how your management and employees will react and respond to BAD PR… will it be your worst nightmare or your shining opportunity?
The time to answer that question (or respond to any crisis) is well before it occurs.
~PPP