Preparing Your Business for Disaster
By Kristi Vaughan
One of the most profitable business plans you can make is the plan that prepares your business for surviving a disaster.
The Institute for Business and Home Safety, an insurance industry group organized to reduce deaths, injuries, property damage, economic losses and human suffering caused by natural disasters, estimates that as many as 25 percent of all businesses forced to close because of a disaster never reopen. Advance preparation for the possibility of disaster can help keep you out of that group.
So what can you do?
Identify risks
What are the risks and hazards your business might face? Are these risks likely or remote possibilities? Are they preventable in anyway?
In Open for Business: A Disaster Planning Toolkit for the Small Business Owner (pdf), The IBHS offers regional maps of the most likely natural disasters. Similar maps and listings are often available from local and state emergency management officials. The North Carolina Emergency Management Division, for example, has compiled information on the likelihood, frequency and severity of natural disasters in that state.
Determine vulnerability
The location and type of your business are big factors in your vulnerability to different risks. An inland retailer, for example, is less vulnerable to hurricane damage but past history may show that tornadoes frequently strike the area.
So too can the physical structure of your business affect vulnerability. An unexpected deep freeze can affect an orange grove but have little effect on a manufacturing plant. Concrete buildings are less likely to get destroyed by heavy winds than a flimsier structure.
And how about technological hazards? Is your business near a highway or railroad where potentially hazardous chemicals are transported? If electrical power or telephone service was out for several days would your product or service survive?.
Identify critical business functions
Some business functions are naturally more critical than others. If a freeze threatens an orange grove, for example, picking the ripe oranges is probably more critical than launching a new advertising campaign. To help determine where you should spend disaster planning time and resources, create a list of critical business functions and the equipment or people needed to make those happen.
Take preventive steps
With information on risks, vulnerability and criticality now in hand, you are ready to look at possible preventative steps. You can begin a cost/benefit analysis of prevention versus risk. What are the cost-effective steps you can take to reduce the chance for damage, or mitigate the amount of damage, for those critical business functions that you have determined are highly vulnerable? You can prioritize these preventative steps by cost, benefit and ease of accomplishment. But don't waste any time getting started. The next disaster could be just around the corner!