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Nobody Expects a Disaster, but Planning For One Could Keep You in Business

According to the Tampa, Fla.-based Institute for Business & Home Safety (IBHS), at least a fourth of all businesses that close because of a disaster – such as a fire, flood, tornado or massive equipment failure – never open their doors again.

Those businesses that plan ahead for business disruptions have the best chance of being among the survivors. But, despite that, remarkably few make disaster planning a high priority, says Diana McClure, director of business protection and vice president of IBHS.

"Most businesses – and even more so for small and medium-sized businesses – have not done much emergency planning at all," McClure said. And in many cases, they don't even know where to start.

Disaster planning is a multi-dimensional task, McClure said, because there are so many factors a business cannot control. For example, she said, getting your doors open won’t help you much if your customers can’t access your products or services, of employees can’t get to work or if vital vendors and suppliers are shut down.

“What you have to recognize is that you are in a community context,” McClure said.

Because of that, McClure said, the IBHS encourages business groups, such as chambers of commerce, to partner with the public sector on issues such as land-use planning and building codes as a way of helping to prevent disasters from happening and response plans for dealing with the calamities that can’t be avoided.

IBHS also provides resources designed to help individual companies plan for – and ultimately survive – various kinds of business disruptions. Its Open for Business program includes a “toolkit” of print and online materials and a free Web-based training series consisting of eight sessions.

McClure said there is a lot companies can and should do to improve their odds in case of a disaster. It starts with simply figuring out which functions are most critical to the continuity of your business. Once you decide that, she said, it’s easier to establish priorities for protecting the assets most vital to your operation and developing alternative plans if the use of those assets is disrupted.

Among the things to think about are:

If a natural disaster hits both your business and that of a key supplier, could you buy the materials you need from another region?
Who are the key contacts among your employees, suppliers and top customers and how many ways could you reach them if a disaster happens?
Could you form a mutual aid agreement with a similar company that would allow each to use the other’s facilities or equipment during an unexpected shutdown?
Do you have a plan for communicating with employees during a natural disaster or other emergency?
If your business has more than one location, could you shift operations from one to the other, if you needed to?
Are you properly insured for damage and the loss of business?

McClure said that whatever plan you have needs to be flexible and include some redundancies, because one never knows how a disaster will play out. Having numerous ways to contact people, she said, is especially important. At one point after Hurricane Katrina, she said, text-messaging worked at a time when land-line and cell-phone voice communication wouldn’t. At other times, cell phones might work when land lines won’t.

“Insurance will only do so much,” McClure said. While they can pay the bills, those checks won’t help you find a new ball-bearing supplier or get your employees to work. Those are things you need to plan for in advance.

“It isn’t rocket science,” McClure said. But it is work that could save your company from being a statistic.

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