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Resources - Small Business Digest

What’s Your Game Plan When Disaster Strikes?

A well-designed plan can mean the difference between survival and failure

By Tim May

Many businesses were caught off guard in August 2004 when Hurricane Charley took a quick and unexpected turn toward Central Florida. The area, once thought to be a haven for evacuees of Florida’s vulnerable coastline, was suddenly in the path of a Category 4 storm.

But CBR Public Relations in the Orlando suburb of Maitland was ready. It’s not that business founder Lori Booker had any special insight into where Charley would unleash its fury of wind and rain. It was simply that CBR had a disaster-preparedness plan firmly in place before the storm hit.

“Having a plan allowed us stay ahead of the storm from the start,” Booker said. “Throwing something together at the last minute would have been impossible, especially during Hurricane Charley, because we had virtually no warning. Less than 12 hours before it hit us head-on, forecasters were predicting it would stay well away along the Gulf Coast.”

Small businesses like CBR are crucial to the nation’s economic stability, accounting for 99 percent of all U.S. companies and employing 53 percent of all private sector workers. Yet, up to half that are forced to close because of a natural disaster, many because they weren’t prepared, never reopen.

Few areas of the country are immune from potential disaster: tornadoes throughout the Midwest, flooding
from Iowa to Georgia, hurricanes along the East and Gulf coasts, earthquakes in the West.

When disaster strikes, proper planning can often mean the difference for survival, experts say. There are important steps all small businesses should take to prepare for the unexpected.

According to emergency management experts, small business operators and managers should ask themselves several important questions:

• What would you do if the building you’re in is damaged or destroyed by storm-force winds or water?
  
  
• Where would you continue to provide your customers with services?
  
  
• Would you have the resources, databases, contact information and other necessary items available to adapt to any changes in location or operations?
  
  
• Would employees know where or whether to report to work?

Those questions can be answered in a disaster-preparedness manual tailored to the business. This manual, while specific, must be flexible enough to deal with a variety of challenges that disasters pose. Employees also must be involved in developing the plan. Their buy-in is crucial and their knowledge of day-to-day operations is invaluable for providing insights and ideas that may not occur to managers.

In addition to reviewing insurance coverage, here are some of the key points that can form the core of a solid disaster-preparedness manual:

• Critical file backup: Few modern businesses can survive without computers. They store and protect files and data that are a business’ lifeline. If that information is destroyed, a business may find it nearly impossible to reconstruct important financial information, client databases or employee records. An offsite facility that keeps this information secure will help make the recovery process much more manageable. But stored data is only as good as the last update, so the plan must include regularly scheduled updates of the data throughout the year.
  
  
• Essential and non-essential employees: Decisions about who to call in during a disaster can be tricky and touchy. Determining which employees are absolutely critical to the emergency-response effort ahead of time is a must. Some employees could better serve the company by working from home. Make sure that employees are aware of their roles and status during an emergency and that their responsibilities are clearly defined. Also consider arranging for their safe transport to and from a base of operations.
  
  
• Communications: A good communications plan is more than just designating who will speak for the company. A solid strategy is needed to quickly and appropriately communicate with employees, families, service providers, contractors and the public during each stage of an emergency. The plan can delegate responsibilities by subject and appropriate resources may change depending on the audience. For example, the employee designated to communicate human resources-related information to employees may not be the person responsible for coordinating with insurance carriers. Communications methods might include a call tree, e-mail blasts or public-service announcement in the local media. Power and conventional phone lines may be interrupted for hours or even days, so the manual needs to include details on back-up communications, such as cell phones.
  
  
• Company spokesperson: Customers and even the news media will be hungry for information. It is crucial for the company to speak with one voice. That means a single person must know all the pertinent details and serve as the designated contact point for these outside inquiries. That person must be “in the loop” as an integral part of any team that surveys damage and determines next steps. Above all, messages about company status and its future must be consistent and truthful.
  
  
• Insurance: Existing insurance policies on all business property and facilities, including motor vehicles, must be kept in a safe, offsite location. It is important to review these policies regularly to ensure adequate and appropriate coverage. The disaster plan must include instructions on each policy’s use and access, including contact information, policy number, coverage period and any restrictions.
  
  
• Strategic partnerships: Businesses that become operational first after a disaster can gain a huge advantage by being ready to serve existing customers and even take on new ones while the competition continues to struggle. A swift recovery will be helped immensely if strategic partnerships are negotiated ahead of time with key trade industry professionals, such as carpenters, plumbers, electricians and masons. Contact information, location and area of expertise should be included in the preparedness manual for each trade industry partner.

The value of a solid disaster-preparedness plan cannot be overstated. In past disasters, many employees were desperate for information about company closures, their paychecks and even their job status. Customers, as well as the news media, also clamor for news about a business’ status: Can it operate? Were any employees injured? What’s the company’s future?

Being able to respond quickly and accurately to such questions is critical. Business owners can confidently address each of them competently with a comprehensive disaster plan in place before disaster strikes.

_____________________________

Tim May is a team manager with Administaff in Orlando. Administaff (NYSE: ASF), is the nation’s leading professional employer organization (PEO), serving as a full-service human resources department that provides small and medium-sized businesses with administrative relief, big-company benefits, reduced liabilities and a systematic way to improve productivity. The company operates 50 sales offices in 23 major markets. For more information about Administaff, call 800-465-3800 or visit the company’s Web site at http://www.administaff.com.

July 9, 2009