November 25, 2015
If you are a small business owner, it is irresponsible not to have a disaster plan. Not only do you have a personal responsibility, you likely have responsibility for employees as well.
It is impossible to prepare for every contingency, so where do you begin?
Among many online resources for disaster planning, there is an excellent resource on the Small Business Administration website at http://www.preparemybusiness.org/planning, The Federal Emergency Management Agency (FEMA) has similar resources at https://www.fema.gov/small-business-toolkit-tools-and-resources-plan-prepare-and-protect. These sites have multiple disaster planning categories and templates for different elements of disaster recovery to assist your small business, but the main aspects of these programs are summarized below.
- Risk Assessment – Start with a solid and honest risk assessment. You should look at risk in two aspects: how likely is an event to happen, and what is the impact if it does happen? Most people use some sort of weighted multiplicative scale to define the most important risks — the greatest combination of likelihood and impact.
Do not limit yourself to grandiose events like fires, earthquakes and tornadoes. Simpler disasters like a prolonged phone/internet outage, breakage of critical equipment, or IT problems resulting in the loss of critical information are more likely to occur, and people chronically underestimate the repair/recovery times for these events.
- Establish Responsibilities – Without clear responsibilities in case of an emergency, some employees may panic and make bad decisions while others will take “charge” and make decisions they are unqualified to make. Establish a Recovery Director (or Team, if your business is large enough) and let it be known who is in charge, along with the established backup personnel.
- Communications – Establish your backup communication plan for different levels of outages — cellphones, landlines, internet/e-mail, or any combination of the above. Build in at least one level of redundancy for every facility and establish an order of methods.
- Critical Business Functions – Identify the most important functions in your business — for example, things that are the most important to fulfilling customer needs, keeping an income stream and fulfilling legal obligations. Keep those critical business objectives in mind as you prioritize your recovery plans.
- Relocation Alternatives – If you only have one facility, consider where you might temporarily relocate in case of disaster. Can you re-establish operations nearby your existing facility where your employees are located?
- Vendor Concerns – A disaster may affect you indirectly if one of your critical vendors is wiped out. You should have backup vendors for all critical materials that are qualified with your customers. Vendor concerns also include maintenance supplies and critical machine parts. Manage your inventory to handle a sufficient outage of the most critical parts.
- Weather – You certainly have a plan for major weather events such as tornado protection and evacuation plans. However, in most climates, you need other contingency plans for ice/snow, flash flooding, or wildfire concerns. One individual (not necessarily you) needs to be the central point for decision-making and have responsibility for executing the plans.
- Drills – You check periodic readiness for natural disasters like tornadoes, but how about business disasters? Run a periodic “stress” test — an office exercise to see how a practice emergency might be handled. You may find practices that need to be improved.
You really cannot plan for everything, but you can plan for the most important issues. With some time and clever planning, you can be as prepared for disaster as you can possibly be. You will sleep better at night, and if disaster does strike, you will be able to recover more quickly. That is all you can ask for as a business owner.