What If Your Business Burns Down?

You’ve gotten your business going and all is going well. What happens if you have an earthquake similar to the one that just hit California? How about if you have flooding like Louisiana, or parts of Asia? What about fires? As unlikely as it sounds, what about a terrorist attack?

If you don’t have one, you need a solid contingency recovery or disaster plan. A contingency recovery plan is how to recover, keep the continuation of business and avoid a loss of your income stream. It can also be how you and your loved ones should react when you have a disaster. Having been trained in contingency planning, I have seen and been part of the implementation of a lot of systems. Talk about a lot of details! The gist of it is, it is better to be prepared and not have a disaster then not to be ready and something goes wrong. What could go wrong?

How about the 1992 Chicago Flood by the Chicago River? How about the World Trade Center terrorist attacks?

Remember that disasters don’t have to be a catastrophe to be annoying. Smaller ones could be utility company failures, bad weather, or equipment just breaking down or failing. The reason that the Year 2000 programming bug (the fear that computer programs couldn’t handle dates after the year 2000 accurately) was a non-event was that companies spent millions retrofitting, upgrading and reviewing their computer software and firmware to see if any date changes would cause any problems. If they had not done that, it probably wouldn’t have been the end of the world however you can bet that a lot of companies would get a lot of complaints from their clients if their bank interest statements showed they owed interest calculated back to 1900 on their loans. The firms would have felt a lot worse if you came in with a bank statement showing that you were entitled to receive savings interest calculated from 1902!

Your contingency plan should be tailor made for specific actions you need to take if certain things happen. One a larger scale, certain levels of destruction have to occur before the Federal or state government support agencies are triggered into action. That explains why sometimes Governors, Presidents and the military are slow to offer aid.

You should have a contingency plan for your family as well. If you don’t have one there is some free information further down in the article.

How do you begin in forming a plan?

First, get all the stakeholders together and decide what should be kept running or restored into operation if the business (or your family) gets disrupted.

What do you need in your disaster or contingency plan?

1. Establish a training plan and practice that you and your staff are safe and they are away from harm’s way if something happens. Think fire drills, flood drills, earthquake drills.

2. Determine the extent of the damage and who to notify that there has been a disaster or problem (it could be as simple as the power going out in a thunderstorm and your backup generator has failed-don’t laugh, it has happened).

3. Bring in the recovery team members to get the systems up and running.

If you are in a customer oriented sales business and have people in your store, make sure that you have an evacuation plan in place and test it periodically.

Do you have emergency lighting? Make sure that you have some way to see where you are going if the power goes out. Contrary to popular belief, it isn’t the disaster that hurts people but things like people walking barefoot in cut glass or tripping in the dark afterwards.

How about if you get a heart attack? What if you get a stroke? Are you the only person who knows how to make the secret sauce at your restaurant? Are you the only one who knows the passwords to get to the accounts to pay the creditors when you take care of bills each month?

These are the back-up procedures that you need to have in place to have a sense of depth in your business as well. You need to have something set up so that no one person (or team) is totally indispensable. It isn’t good business sense. Too many firms are depending enough on outsourcing their work and what happens if that particular vendor bites the dust. Don’t forget to go to the specific vendor and pin them down to ask them what they do in the event of a natural disaster or financial disaster.

How much cash do you have in reserves as well? Do you have enough liquid assets to cover emergencies? What about the restaurant where the man had his men and women workers serve food without their tops on? Allegedly, he had not insurance. His restaurant was burned down and now he is working out of a tent and trying to rebuild. He may be okay with that because he has popularity on his side though a lot of people in his town don’t like what he is doing. That is an extreme example but you are getting what I mean, right?

If you can, take steps get what insurance coverages you need now. Once a minor event like a small flood happens, people start trying to get coverage and rates go up (if they haven’t already with all the flooding going on worldwide in the last few years).

There are a lot of other issues to take into consideration and if you want specific information, check with the link below or post your questions in the comments section.

If nothing else, please take away information that you should have a contingency plan in place for you, your family and business if nothing else so that if all goes well, you will never ever have to use it.

For information about what to have for your own disaster planning, you might want to check out the free information at FEMA. They have some great stuff about planning there.

For more information and if you want to read any of my books, check out the home page or look on Amazon and type in my name.