Running a business these days is more demanding than ever. It seems like there’s always a fire to put out somewhere, figuratively speaking, and a million urgent things to do to meet your revenue goals and ensure that your company gets to see another day.
According to the Federal Emergency Management Agency (FEMA), half of all small businesses shut down permanently after a disaster. And of those that cease operating for a week, 90% will fail within a year.
You need to make time to plan for this, but thankfully, there are a lot of great tools out there to help you do so effectively.
How to plan for the worst
First, you need to be aware of the various large scale risks your company may be exposed to, whether they are weather-related or of a different nature. The goal of managing your company through a crisis and maintaining your operations can only be achieved by first identifying what disasters you could be facing.
You’ll then want to look at how you can respond to each event and craft a plan tailored to that situation. This will allow you to trigger the appropriate responses from your team when the time comes.
Finally, you’ll want to train your team to recognize these threats and set in motion the required emergency responses. There is no point in having a plan if you cannot follow it when needed.
Ready is a public service campaign coordinated by FEMA and Homeland Security to prepare Americans to respond to and mitigate the consequences of disasters.
Ready suggests using a three-pronged approach to disaster preparedness planning:
- Risk identification: What is the probability that this event will occur? Risks include terrorism and active shooter situations, fires, explosions, extreme weather events like floods and hurricanes, cyberattacks, supply chain problems and mechanical breakdowns. Each company has industry-specific risks it should prepare for.
- Targeted resources: What internal resources (material, intellectual or physical) does each event target? It’s essential you identify the resources most likely to be affected by an event to craft an appropriate response. Resources include people, critical infrastructure and systems, technology, intellectual property, reputation, and regular business operations to name but a few.
- Threat level: Assess the likely impact of the event on all identified resources, from minor to worst-case scenario. This lets you know how big a threat an event poses to the survival of your business.
Assign a plan owner
Because you have a million things to do and the time and effort required to put together such a plan is considerable, you need to give someone in your organization ownership of the plan.
The first action of the plan owner is to call a meeting with your executives and schedule regular meetings thereafter until the plan is finished and adopted.
Conduct a business impact analysis
Following Ready’s three-pronged approach, have the executives in your first meeting help the plan owner:
- Compile a comprehensive list of every event you are likely to be exposed to in the foreseeable future (five years ahead)
- Assess the odds of each event occurring
- Determine the resources most affected by such an event and the impact on your operations and your bottom line
- Brainstorm how to mitigate the risk of each event happening
- Brainstorm how to limit the impact on business assets and operations
You now have your work cut out for you. Confirm what risks you are truly exposed to and start crafting solutions designed to prevent these events from happening, where possible, or at the very least provide a plan to limit the harm these events will cause to your business.
Ensure business continuity
Your number one objective is to ensure that no harm comes to any person in your business community. This includes employees, both full-time and contractual, working in the office or from home, as well as customers on-site, important suppliers and members of the board.
Your second objective is to ensure business continuity, as few businesses can afford to shut their doors and survive for very long. Customer orders need to be fulfilled, phones need to be answered, unless the whole municipality is affected by an emergency situation.
Your third objective is to call your insurance professional and review your commercial insurance coverage. You should already have business interruption coverage that will kick in if you need to evacuate during an emergency, but you might want to also have an allowance to relocate your operations temporarily if that’s feasible for your business.
Finally, some risks such as data loss or network shutdowns can be overcome with remote duplicate servers and other security measures. It would be wise to consult an IT specialist to audit your system if you do not have one in-house.
Write the plan
You will want to create formal plan focused on the following items:
- Evacuation: What to do if the building needs to be evacuated, including a map, escape routes, a list of evacuation coordinators and meetup points by teams
- Remote work: What to do if you cannot (or are told not to) come into work – who to call to check in, how to log in, what duties to perform
- Essential personnel: A list of essential duties and personnel who are required on-site to keep the ship running
- Special instructions: For specific situations, such as chemical fires or active shooter events
The plan should also include restricted information about managing employees who have special needs during evacuation, or sensitive data or equipment that needs to be protected at all costs. This information will be shared only with people who have the proper clearance, on a need-to-know basis.
The plan should state how communications during a crisis will take place, even if usual lines of communications are disrupted. How often, by whom, when, to whom. Clear lines of communication can save you a lot of time.
Once the plan is adopted, it will need to be shared with employees. If the plan is too long or complicated to be rolled out all at once, focus on getting your staff ready to deal with the most imminent or costly threats to your business. You may find many of the events you’ve listed will be dealt with in a similar manner.
Form a committee to help with plan implementation if your organization and its core components are complex. Each team can better respond to its specific needs in an emergency if the team leader can train them.
Your communications team or person will be responsible for informing all personnel of this initiative, coordinating training sessions and providing timely updates as needed. You will also want to conduct training exercises once or twice a year to make sure everyone remembers what to do.
Preparing for the unexpected should be part of any small business’s risk management initiatives. It could mean the difference between shutting down for an extended period or being ready with an emergency response that can save your business.
Here are a few resources to guide you in creating your own disaster preparedness plan.
Ready has, in its Disasters and Emergencies section, comprehensive information you can draw upon for specific risks. These include:
- Active shooter
- Chemical and hazardous materials emergencies
- Drought and extreme heat
- Earthquakes and landslides
- Hurricanes and tsunamis
- Bioterrorism and pandemics
- Nuclear explosions and radiological dispersion
- Power outages
- Snowstorms, avalanches and extreme cold
- Wildfires and volcanic eruptions
To find out whether any of your business and supplier locations are at risk (U.S. only):
- Floods (FEMA)
- Hurricanes (National Hurricane Center)
- Earthquakes (US Geological Survey – USGS) as well as landslides, droughts and wildfires
FEMA has produced some very useful toolkits for various disasters, including hurricanes, inland flooding, power outages, and more. You can access them at Ready.gov.
- American Red Cross has a Ready Rating test
- SBA has preparedness checklists and safety tips for various disasters
- The U.S. Chamber of Commerce offers “Resilience in a Box” resources
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