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Will you still be in business after disaster strikes?

By Higginbotham on October 03 , 2019

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For a business owner, few things are more frustrating than building a successful operation, only to have it shut down by forces beyond your control. Whether it’s a hurricane, fire, flooding from burst pipes, cyber attack or other emergency, an unexpected disaster can be devastating.

Many businesses don’t survive. According to FEMA, between 40 and 60 percent of small businesses that suffer a disaster never reopen. Ninety percent of small businesses that don’t reopen within five days of the disaster are closed for good within a year.

Pretty sobering statistics.

That’s why you need a robust emergency response and disaster recovery plan to support your business continuity. Even if your business survives a disaster, if you don’t have disaster recovery and business continuity plans in place, you could suffer debilitating financial, reputational and other losses.

To avoid having an emergency turn into a catastrophe that puts you out of business for good, a solid emergency response plan is essential. What does that look like? There are a variety of resources available to help you put together a step-by-step plan, such as FEMA’s Emergency Response Plan Template for Businesses and ready.gov/business.

Here are 10 crucial areas to consider when developing your disaster recovery plan:

  1. Risk assessment. A thorough risk assessment is necessary to identify possible disaster scenarios and resource requirements, and to develop proper procedures to prepare your business.

  2. “Right now” response. What you and your employees do in those initial moments of a disaster is critical. This may include warning employees to evacuate, shelter or lockdown; calling 911 for help and providing accurate information; administering First Aid or performing CPR; or shutting down utilities and vital systems. Knowing what to do first can save lives and minimize damages.

  3. Emergency supplies. Identify what you and your employees will need immediately following a disaster. Emergency supply kits should include bottled water, non-perishable food, First Aid supplies, battery powered radio, flashlight, cash, device chargers and other essentials.

  4. Key contacts. You don’t want to be fumbling around for contact information for key people and organizations during a disaster. Keep contact info handy for local emergency management agencies, customers, suppliers, insurance representatives and other stakeholders. Keep a hard copy of your key contacts in case you don’t have an Internet connection or cell service.

  5. Emergency communications. You’ll need to plan out how you’ll communicate with employees, suppliers, customers and the community about the state of your business following a crisis. That should include everything from low tech methods, such as posting a sign on your door, to electronic communication strategies, such as texting and social media posts.

  6. Supply chain logistics. How will you be affected if your vendors or suppliers are hit by a disaster? How will companies you supply be affected if you’re hit? Compare notes with your vendors and customers about their disaster preparedness to help you coordinate plans.

  7. Redundancy for key resources. Have a back-up plan for power, equipment, supplies and communications if possible.

  8. Data backups. This is paramount to surviving a disaster. Keep regularly updated backups of important records, documents and contracts off site or secured in the cloud.

  9. Training and practice. Staff will need to be trained on their roles and responsibilities in a disaster. Regular emergency response drills will familiarize everyone with what to do in a crisis. Also train them on what to say and what not to say in a crisis. Tell them where to refer questions.

  10. Financial protection. It’s crucial to carry comprehensive business insurance coverage with business interruption protection. Also, periodically review your coverage to ensure there are no gaps that can become costly surprises in the event of a disaster.

Effective business continuity planning can mean the difference between survival and failure for your business if disaster should strike. A disaster recovery plan that covers these key areas is an important part of that business continuity planning. It's also wise to review your plan at least annually to ensure that it still meets the needs of your operations - especially if your company has grown, added new locations or experienced any other changes that might affect your recovery plan.

Call our Risk Management team today to talk about how you can prepare for the unthinkable.

Tags: Risk Management

  
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