By Douglas Freer, CSP
The mid-Atlantic and parts of the Midwest experienced snow emergencies last year that effectively shut down some communities for days. At press time, yet another significant snowstorm was impacting travel and business on the East Coast.
You are in the business of providing an emergency service, and when winter weather hits, you must be ready to respond. Customers rely on you to service their properties, regardless of equipment failures, capacity issues, material shortages, staffing problems or any other issue. Customers grade your performance with each storm and may not forgive a service failure because you experienced a business hiccup.
But would they be more willing to accept less than your best if a disaster strikes your business? Asking for their empathy is likely not the kind of relationship your customer is seeking; and while they may tell you they understand, the reality is that you let them down.
How effective will you be at providing service when your business is struck with an emergency that diminishes or disables your ability to operate?
Forward-thinking customers will select providers who can provide more than basic services, choosing those who can help mitigate the impact of a more significant weather event. You may be able to differentiate yourself by showing clients how well prepared you are for dealing with potential disasters.
Disaster planning
Do you believe that at some point there will be a disaster that will impact your business? If your answer is “no,” you may want to read up on denial. You will be considered quite lucky to never be impacted by a business disaster.
Small businesses have limited resources, and often we’re focused on core operations and ensuring our business operates smoothly. Coming out of a recession, where the impact of difficult economic conditions can still be felt, it can be challenging to find resources to devote to disaster preparation. But you do not necessarily need deep pockets to prepare for emergencies.
Your level of preparation depends on your mindset. Do you choose to be a victim of circumstance, assuming that you can do nothing to help yourself? Or will you prepare in advance and fight through a disaster? You may survive in either case, but how well you fare will, in large part, be reflected by how well you prepared for and managed the emergency.
If you have done little to no disaster planning, you are not alone. It can become overwhelming, particularly if you try to address every potential threat at one time. But working through the steps of disaster planning can put you in a better position to survive an event.
Eight steps to preparedness
STEP ONE: Identify risks that pose the greatest threat to your business (see page 40). You may not be able to prepare for all potential disasters, but preparing for most likely will help you in other situations.
STEP TWO: Develop response strategies for disaster-specific scenarios. Responding to a power outage is different from a natural disaster. Ask what outcome you would like to achieve in a given scenario. The goal is to have your plan direct you to the desired outcome.
STEP THREE: Take stock of available resources. Determine what resources you need to keep your business functioning, differentiating between what is necessary and what is convenient. For example, if your business is reliant on specific IT applications, then you have different needs from someone who operates with a more manual paper-based system. If you are in a more rural area and use well water and heating fuel, you will be less impacted by a business that is dependent on municipal utilities if there is an extended power outage.
STEP FOUR: Formulate a plan. Determine who in your business is responsible for specific tasks during a disaster response. For example, what if you have a fire in your building and you plan to submit an insurance claim? Understand the process involved and the time frames for action and follow-through from your insurance carrier. Know what information your agent will need. Where will you store your list of assets with model/serial numbers and costs? How will you demonstrate a loss to your insurance company so that you can expedite a claim? Have you discussed with your accountant how much available credit or capital you have in case you need to inject emergency funds into your business during the recovery stage? Do you have enough? What do you need to do to ensure it is available?
The planning stage will have you asking and answering a lot of questions, many of which you won’t be able to answer at once. Have a process for resolving those unanswered questions so you can continue your planning.
STEP FIVE: Document your planning. Keep a hard copy of your plan with a step-by-step process for what needs to be done in the event of a disaster. If you or your key people are unavailable or unable to manage the response or transition through a disaster, other team members will need to have the information and checklists for what to do.
STEP SIX: Implement your plan to the extent that you can. For example, establishing credit terms with alternate suppliers and developing relationships with them will take time. By working on this now, you may prevent the problem of being reliant on a single supplier.
You will alternate between the various steps of the overall plan, moving between planning, documenting and implementation, updating the written plan as the information changes. Creating a plan for each type of disaster will likely result in a growing wish list of things you want or need that is larger than you can tackle at once. Determine the one or two biggest items that most impact your business and implement them as quickly as you can. The low- or no-cost items can be implemented much sooner than those items that require a capital investment. Develop a plan in your budget and on your calendar to tackle the next one or two items so that you keep working through your list.
Balancing the time and resources for planning and executing your plan is important.
STEP SEVEN: Review your plan and train your team. The fire drills you practiced in school ensured that everyone knew what to do during a fire, including how and where to exit the building and to identify the rendezvous point. Similarly, you should review and discuss your plan with your team so they know what to do and where to go if a disaster strikes.
STEP EIGHT: Update your disaster plan as needed. Preparing for disaster is a process and should be a part of your regular business activity. Just when you think you have the ideal plan in place, aspects of your business operation will change, necessitating an update in the emergency plan.
How will you recover?
Depending on the type and severity of the event, your disaster planning and response will determine how soon normal business operations will resume.
Getting your business back on track to maintain profitability is critical. Loss of revenue, increased costs to repair the damage and lost productivity can result in significant business losses. How much of a loss can you suffer before you would have to close? Will your staff stick with you during the recovery, or will the stress be too great that they choose to jump ship, further compounding the disaster’s impact?
Being aware of the potential and preparing in advance of a disaster is good business. Choosing to ignore the possibilities could kill your company. Having a plan in place will provide your staff, your customers and yourself the peace of mind and confidence that you can manage and recover from a disaster.
What types of disasters await you?
COMMUNICATION
- What would happen if your communication system (phone, cell, two-way radio) went down? Understand how your communication sys-tems work and what threats exist. Do your employees know what to do or where to report in the event that communications are down?
- Is your company prepared to manage public relations? What if the media shows up at your business to report on an incident or accusation? Do you have the necessary contacts in place to respond appropriately? Do you know the answers to questions before they are asked? Do your employees know how to respond if there is a camera present?
PEOPLE
- What employee(s) in your business would be difficult, if not impossible, to replace—including you? How would your business operate without them for either a short or extended time? Do other people in the business know their job duties and how to perform them? How much key information or institutional knowledge do the key people hold? Can this information be documented and shared? How much cross-training have you done to allow others to cover their functions?
- Do one or two customers represent more than 30% of your business? What would happen if you lost them as customers? Do you know what changes in your operation would be necessary to adjust for the corresponding loss of revenue?
- What if the relationship with a key supplier comes to an abrupt end? Would your business be impacted if you could not get the predictable supply of materials and resources? What backup plans do you have in place?
MATERIALS & EQUIPMENT
- Salt and other chemical deicers are key components in the ability to service our customers. What is your contingency plan if salt supplies run low and you cannot get product? Are you prepared to pay double, triple or more for materials? What impact will this have on your business?
- How much fuel do you consume during a storm event, and what would you do if you were unable to get deliveries from your key sup-plier(s) or buy from the local stations?
- How do you store your sensitive electronic data? Do you use removable drives that you take off site or use remote storage services that provide off-site data backup and retrieval services? What if your backups become destroyed or damaged, or your off-site service provider is impacted by a disaster? How dependent are you on the data, and do you have redundant copies of your most critical information?
UTILITIES
- Do you rely on municipal utilities or do you have backup power and/or fuel in case there is an interruption in service or supply? A backup generator to power critical circuits for some lighting, heat and server/computers might be a first step. If there is a more significant loss of power in the region, do you have fresh-water supplies or the ability to purify water?
DEVASTATION & THREATS
- Flood, earthquake, tornado and other acts of Mother Nature are difficult to predict. What would you do if your business location was destroyed or rendered useless? What about the locations of your key suppliers, customers or employees?
- How would your company be affected by a fire or an explosion? How do you store your records? Can you pick up operations and relocate on short notice? What must you have to operate your business in a new location while you work to recover?
- Is your business located near industrial areas or rail access? What would happen if you had to evacuate your business for a period of time because of a chemical spill or explosion? Can you operate remotely? What is required to execute this plan on a moment’s notice?
- How would your business be impacted if the community you live in was the target of an act of terrorism?
- Locks on your building and equipment provide some theft/vandalism deterrent, but if the thieves are successful, what will you do if any equipment is missing or damaged? Relying on insurance may be a part of the plan, but how long will it take for the claim to be processed and for you to be up and running if you can’t finance the recovery until the claim is settled?
- Alone or as a compounding issue from other potential disasters that could strike your community or region, how would civil unrest affect your business? Civil unrest could lead, for example, to fire, vandalism, interruption in emergency services and the inability of employees to report to work.
Douglas Freer, CSP, owns Blue Moose Co., Inc. in Cleveland. Contact him at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
