With the weather volatility on the East Coast during this El Niño and other climate-change-induced disasters in the media lately, disaster preparedness should be on our minds, not only as individuals but as owners of business entities as well. Disasters can range from the super-sized Hurricane Sandy variety on down to the office fire caused by a coffee burner left on overnight. In respect to all sizes and scopes, every responsible business should have a disaster recovery plan of some kind. At the risk of beating a dead-horse-epigram, it’s worth it to remember that the best defense is a good offense. Having a solid plan ahead of time is like reading the book before you see the movie. Sure, the movie version will vary some from the book, and there will be some unexpected surprises, but you know how the plot goes and how it all ends–such is the security you receive by forming a business continuity plan.
That’s what Insurance is for, Right?
You might reason that this is the very purpose you keep paying your monthly business insurance premiums. Having the right coverage is a good start, but your insurance isn’t going to tell you where to find temporary office space, how to keep your customers from deserting to the competition, or ensure you have a complete backup of all your electronic records. To do that you need…
A Business Continuity Plan
A business continuity plan acts as a roadmap when normal business operations are interrupted by an unexpected event. Such events could include large non-specific disasters like storms, earthquakes, floods, epidemics, acts of terrorism, or civil disorder and unrest. Other threats specific to a company include fire, utility outage, theft, supply chain disruption, sabotage, and cyber-attack.
The first step in putting together a comprehensive plan is to identify the threats to your business, such as those listed above. The next step is developing a set of impact scenarios which takes a pragmatic view of how those threats will directly impact your business operations. For example, if you are in the business of shipping and contamination/recall occurs, you need to calculate how much money you’ll be losing per day. Be specific and plan for the worst case scenario. In the contamination scenario, your company should not only be insured but should have plenty put away in escrow to comp for employee hours.
After identifying how each of the scenarios will impact your business, the next logical step is to identify the means by which you will recover. This step will focus on picking up the pieces and starting over. It will address concerns such as where to find temporary office space in the event of a fire or where to find alternative vendors in the event of a supply chain disruption. Start preparing for these situations now by drawing up lists of these vendors and developing the necessary partnerships for that “just-in-case” moment. Most importantly, make sure that your most important documents are backed up and stored offsite so that even if you lost your office space, you don’t lose all of your important documents.
Peace of Mind
Nobody wants to dwell on the negative. Even the time spent on a recovery plan can seem like a downer. It’s a tedious process that can eat up time you’d rather spend on more immediate concerns. But look at it this way: running a business is a lot like being a tightrope walker. You have to stay focused and maintain your balance at all times. And like a professional tightrope walker, you pay as little attention to the safety net below you as possible. Nevertheless, the security in the back of your mind provided by that net is invaluable, and you can bet you’ll thank your lucky stars if you ever lose balance and happen to fall off.