Preparing your company for unexpected, potentially crippling disruptions may seem obvious to those in disaster-prone areas, but virtually every business needs a sound continuity plan as random, isolated incidents can strike anywhere, anytime.
Major natural disasters such as hurricanes and violent winter storms happen more frequently now than a decade ago, but you don’t have to be in a disaster-prone area to start building a business continuity plan. Smaller incidents cause the majority of business disruptions and shutdowns as opposed to large-scale disasters.
“More often than not, it’s a random, isolated incident — a pipe bursts or a car crashes through the window of the business,” says Scott Teel, Senior Director of Communications at Agility Recovery, a disaster recovery services company that provides free resources to small businesses at PrepareMyBusiness.org.
Preparing for your area’s likeliest disasters, as well as the unexpected, starts with basics you can continually build on including evacuation and shelter-in-place plans. Although safety is your top priority, it’s just one part of the plan.
Risk assessment and business impact analysis
Identify your greatest risks and your critical business functions for starters. Next, determine the resources you need to restore those functions. Resources generally fall within four broad categories that are easy to remember because they all start with S: systems, space, staff, and supplies (or “stuff”).
Information technology often drives systems, Teel says, and though most businesses have cloud-based backup, they don’t ascertain they can access, download, and reinstall data and programs remotely. Login credentials and licensing keys may be needed to unlock electronic assets.
Connections to power and people
“Virtually all businesses depend on two key things to keep operations afloat — power and communications,” Teel says. “It doesn’t take much of a disaster to wipe these out — a severed fiber-optic cable or downed power line will do it — and so it happens frequently.”
Determine the power needs of your business and invest in backup. “A small consumer-grade generator won’t push all the power most businesses need,” says Teel, adding that licensed electricians do site visits to measure power requirements.
Establish a communications plan with an email alert system, phone messaging, and texting to keep employees and stakeholders informed. Leverage social media to provide updates and let the public know you’re open for business.
Adequate insurance coverage
Make sure you are adequately insured against potential risks in your area. Ask about your policy’s business interruption coverage, which compensates you for lost income and covers some operating expenses if a disaster forces a temporary shutdown. Consider adding extra expense coverage, which reimburses you for money spent to avoid a shutdown during restoration.
Supply chain continuity
Ask if your suppliers have their own recovery plan in place because a disaster that befalls them could end up harming you. “I’m not suggesting you shouldn’t do business with a supplier that doesn’t have a robust plan in place, but you need to know in order to make contingency plans,” says Teel, adding that it’s wise to develop relationships and perhaps accounts and lines of credit with alternate vendors in case of a supply chain breakdown.
Tests and drills
Conduct annual “tabletop tests” to ensure your plan works and stays up-to-date. Write an after-action report to evaluate outcomes and improve your plan accordingly.
Resources
Business continuity plan checklists and templates are available at Ready.gov and PrepareMyBusiness.org. The American Red Cross offers a self-assessment for disaster preparedness at ReadyRating.org.
Start today with these tools because small businesses stand to lose more than just revenue if a disaster catches them off-guard. “Closing your doors even for a short while can threaten your livelihood and everything you’ve worked for,” Teel says. “Compared to the blood, sweat, and tears it takes to build a business, building a business continuity plan to protect it is a breeze.”
