As the owner of a small business you are used to planning for the future when it comes to budgets, growth forecasts and the like. But have you taken the time to develop a plan in the event that a natural disaster or other emergency strikes?
Threats to your business can come in many forms, from weather-related disasters, to human-caused mayhem, to large-scale technology malfunctions. Events such as these, while relatively rare, can pose a very serious threat to the livelihood of small businesses. Yet an Ad Council survey found that 62% of respondents do not have an emergency plan in place for their business. It should not come as a surprise then, that according to the Insurance Information Institute, up to 40% of businesses that are affected by a natural or human-caused disaster never reopen. Being prepared for these events can make the difference between surviving with your customers and reputation intact, versus incurring permanent damage to your business.
An emergency-preparedness plan should include both a set of policies to ensure that disruptions to your business are minimized if a catastrophe does strike, and a business continuity plan for getting up and running again as quickly as possible in the aftermath.
The specifics of your emergency plan will depend on the size, scope, and location of your business but at the very least it should include the following.
Communication Plan – Information including phone numbers and email addresses, as well as computer and internet passwords, needs to be available to all key personnel in both electronic and hard-copy format, and be accessible both on-site and remotely. When a disaster occurs, after insuring that all of your employees are accounted for, it is critical to reach out to customers and suppliers as soon as possible to update and hopefully reassure them as to the status of your business. Your communication plan should identify everyone that you will want to contact in an emergency and assign responsibility for making those contacts to senior people within your organization.
Data Access – All data and software that is key to running your business should be backed up, both on-site and off, and accessible remotely. Ideally you will have identified alternate work locations in case your office is inaccessible. Once you have this part of your plan is in place, you can test its effectiveness by having yourself and/or other key employees work remotely for a day or more and seeing whether or not they can accomplish their duties seamlessly.
Continuity Plan – Suppose that all of you business capabilities are knocked out and you need to start over from scratch. Do you know what you would do first? You can start by identifying the actions that are necessary for you to fulfill all of your legal and financial obligations in order to maintain your cash flow. Then move on to those activities that are critical to maintaining market share and reputation. Come up with a realistic assessment of how much time you could tolerate operating without key products, services, and personnel, and then formulate a plan to get them back online within the allotted time frame. Again, this is something you can test as part of a disaster-preparedness scenario, and you should assign senior personnel the responsibility for getting key areas functioning in the aftermath of a disaster.
If you are looking for more help in crafting your disaster-preparedness plan, the Federal Emergency Management Association (FEMA), the Red Cross, and your state and local government offices can all be excellent sources of information to help you plan for a day that will hopefully never come.
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Disclaimer: Harvard Business Services, Inc. is a document filing service that provides general information. We cannot render legal or financial advice and your use of this site is subject to additional terms and conditions. HBS is not affiliated with Harvard University.