Disasters: Be Prepared

Business Tactics
Disasters: Be Prepared

by: Richard Ensman

Fall, 2006

Natural and man-made disasters can strike businesses of any size, anyplace, anytime. These disasters are not limited to earthquakes, floods, and tornadoes. Fire, blizzards, explosions, power outages, and even acts of vandalism or terrorism can strike at the health of businesses. Without adequate preparation for disasters, many businesses will find their operations seriously crippled; some will shut their doors forever.

While emergency planning precautions vary from business to business, every enterprise can guard against the effects of disasters through a five-step planning process. This process involves a clear assessment of potential emergencies; prevention; development of clear emergency procedures; development of safety precautions; and steps for continuation of the enterprise.

Assessing Emergencies: What Can Happen?
You can’t identify every possible disaster that might befall your enterprise, but you can identify some.  

Visualize the worst scenarios other area firms have faced. Given your location, are you prone to flooding? Earthquakes? Acts of crime? Make a list of the three, five, or ten worst disasters you could face.

Check the durability of your building. If you lease your facilities, the landlord or building manager can help answer questions about the structural integrity of your building and mechanical systems. If you own your own building, ask a trusted contractor or engineer for assistance.

Assess the economic consequences of a sudden emergency. What costs would be involved in remedying damage to your building? Disruption of sales? Downed machinery? Identify the costs as closely as possible and decide what risks you can bear — and what risks you can’t afford. Then, consult your insurance carrier about coverage for at least the most serious risks. Keep detailed records about the condition of your facilities and equipment, and take photos if necessary.

An Ounce of Prevention
You can’t prevent catastrophes, but you can minimize their impact on your business operations.

Keep equipment out of harm’s way. What common sense steps can you take to prevent disaster loss? If you’re in heavy wind country, for instance, keep computers and other electronic equipment away from windows. If your facility is prone to flooding, keep inventory out of the basement. By all means, store combustible materials in a fireproof place.

Consult with outside agencies. Make a list of agencies that can help treat injuries, disseminate information, and protect property. It should include the names and telephone numbers of law enforcement and fire protection contacts, hospitals and clinics, local media, and private companies — such as transportation companies, temporary help agencies, and contractors — that could help you maintain operations after a disaster.

Identify and safeguard critical records. These might include accounts receivable data, telephone lists, insurance policies, key contracts and agreements, building and mechanical system plans, and the like. Store them in a fire-proof vault or a secure location off-site.

Develop a computer backup system. Back up your system regularly — weekly or daily depending on transaction volume. Transport all backup disks and tapes to a location miles away. Or contract with a commercial data storage center. Be prepared to run your business with backup “paper procedures” if electronic systems go down.

When Disaster Strikes
The real test of your ability to respond to an emergency often lies in the procedures you develop. At minimum, here’s what those procedures should help you do:

React to weather predictions. Information about severe storms is available from the National Weather Service and the National Hurricane Center. These agencies issue “advisories” when potentially harmful weather is possible, and upgrade these notices as the danger becomes more acute. As official warnings are upgraded, employees should be sent home, your property secured, and your emergency staff mobilized.

Designate emergency leaders. One person should have overall responsibility for crisis management. As part of this individual’s team, one person should be responsible for communications and another for building security. Be sure alternate leaders are designated as well; a sudden emergency could leave key personnel absent or even injured.

Prepare an emergency telephone directory. This should contain both office and home telephone numbers of all employees, as well as key customers and vendors. Key people should keep this directory at home, in the car or in some other highly accessible place.

Develop a plan to secure facilities. If your business location is damaged, you’ll need to know how to secure it quickly against theft or further deterioration. Designate an individual to be responsible for inspecting the facility, boarding up doors and windows, turning utilities off, and arranging guard service.

Prepare emergency communication procedures. Identify an off-premises source of communication: a friend’s office across town, a cellular telephone network, even your home telephone. Next, build a “telephone tree” that can systematically bring information to employees and others. Use it when an emergency hits.  

Write it all down. Develop a simple, but thorough, emergency procedure plan. A things-to-do list is fine as long it spells out the specific steps you must take to deal with the problem. Be sure you — and key people around you — keep the plan handy at home and at the office.

Safety First
Although you should be vitally concerned about the health and survival of your business after a disaster, you also must be concerned about the well-being of your employees and their families. Employees may need assistance getting home or, if the emergency is critical, may need to safely remain at your facility until the danger subsides. Some tips:

Designate an inside “safe zone”. The safest part of your building might be a sturdy rear wing or the basement. Employees should gather in the designated safe zone if they’re present when disaster strikes.

Provide emergency directions. The first set of directions should be internal, and should guide employees to your safe zone. The second set of directions should designate emergency fire exits.  And the third set should spell out the safest escape roads from the area. Keep in mind that natural disasters can wash out roads, damage bridges, and block intersections, so be sure to identify several routes out.

Prepare to provide emergency health care. Your safe zone should contain a fully stocked first aid kit, which you can use to treat minor injuries. Know the procedure to get people to nearby hospitals in the event of serious injuries.

Maintain a well-stocked emergency kit. Besides first aid supplies, your kit should contain things like battery-operated radios, flashlights, non-perishable foods, water, blankets, and small utensils and tools. Keep the kit in your safe zone.

Up and Running Again
Once the disaster is over, the real work begins:  getting the business up and running as quickly as possible.

Identify an “operations center” and begin working from there. This center might be your building’s safe zone, at your home, or at some other location. Here, you should have access to your communication system, basic supplies and equipment, telephone directories, customer and vendor lists, and critical records.

Make plans for reopening your building. If your building has been damaged, call on your emergency contractor, utility companies, and other suppliers to help you make the building useable as soon as possible.

Restore your computer systems. Now is the time to pull out your backup disks or tapes, or contact your commercial data center to help you get your computer system up and running again. Replace hardware as needed.

Obtain emergency supplies and inventory. Your emergency records package should serve as a quick guide to suppliers, ordering and delivery requirements, and terms.

Make financial projections. Pull out your financial records and develop a series of projections for the year ahead — a “best case” and “worst case” scenario at least. These financial projections may be helpful if you must apply for loans to replace inventory or repair damage.

Any number of disasters can strike your business — anytime. You can’t prevent them, but with careful preparation, you can minimize the losses should you suffer a tragedy and get back on your feet as soon as possible.