In recent memory, we have witnessed five billion dollars in flood damage to Calgary, Alberta, disastrous fires in Colorado, an explosion in West, TX, and the devastation wrought by super storm Sandy. The extensive media coverage focused on residents and their struggle to deal with the destruction of their homes. Much less attention was paid to the hundreds of small businesses (SMBs) also affected by these catastrophes and more. Any one of these events is proof that small businesses must have formal disaster plans. Here is a quick list to think about when you begin formulating your SMB disaster plan.
1. Location
Your business needs to remain operating with minimal disruption. Your continued availability serves customers’ wants and their psychological need to return to “normal.” This means having access to an alternative place to work. It is necessary to have a plan in place to either rent a new worksite or provide provisions to work from home.
2. Money
Your small business is not likely to have access to cash or credit at least for a short while. So, you need to have cash on hand for emergency goods or recovery expenses, such as cleanup tools and services, fuel, water, and food.
3. Equipment
Your business industry may be equipment-dependent. Equipment may mean much more than office machines. It might mean tools, heavy equipment, appliances, and more. Be prepared to replace or repair them or hopefully move them given enough time.
4. Records
Your company records and information are at risk. Data must be backed up regularly and securely. You are bound to safely secure personnel, payroll, and tax records, along with account receivables! Your disaster plan should include the ability to store records offsite and preferably digitally. Most quality HRIS and accounting solutions today will have cloud options so it will remain safe and ready to use when you get back up and running.
5. Communications
Any SMB, regardless of the type of business, depends on communication. Your employees, customers, and vendors must be able to reach you to confirm your continuity and readiness to respond and serve. Practice disaster drills (once a year) will help work out any missing pieces to your plan.
Your business does not operate in a vacuum. You will need to identify your company’s essential business functions, prioritize them, and align emergency solutions. Run your formal plan by your risk management adviser and/or your attorney then discuss the plan in detail with your employees. Assign specific accountabilities and provide copies with updates as needed.
No contingency plan is perfect. No plan can anticipate or stand up to some of the more catastrophic events. But, any plan is better than no plan at all. Your lawyer can provide a model, or you can download any number of templates from the internet. Catastrophic events leave no time for delay.
With regard to number 4 above (Records), remember the cloud aspect of software relies on technology too. Therefore, when employing any type of technology, remember to ask about contingency planning by the vendor from which you are purchasing the technology. If a vendor’s location is prone to any type of natural disaster during your busier times of the year, make sure they will be able to house your data in a place that won’t necessarily be affected by their weather!