It seems like, in the past four or five years, we have been hit with some pretty bad Mother Nature jokes – floods, hurricanes, tornadoes, earthquakes – and the most currently popular “Polar Vortex”. Then there are the non-weather related hazards, like accidents, system and equipment failures and malfunctions.
Here are some interesting facts:
- According to ready.gov, almost 40 percent of businesses affected by a disaster never reopen
- An Ad Council survey reported 62 percent of respondents did not have an emergency plan in place
Do you know how susceptible your business is to disasters? If not, begin by doing a Business Impact Analysis. Identify operational and financial impacts from a disruption of business functions. Impacts to consider:
- Loss of revenue
- Delayed sales
- Increased expenses for recovery (e.g., employee overtime, outsourcing, expediting costs)
- Contractual penalties
- Customer dissatisfaction or defection
- Delays of new business
For detailed information and the Business Impact Analysis, see the link below.
So, you’ve done your Business Impact Analysis, and now need to start your Preparedness Plan.
Here are five (5) major steps to use:
Get leadership commitment and financial support. Ensure the preparedness policy is consistent with your mission and vision and is written and articulated to employees. Set SMART goals for the plan. Identify a program committee and program coordinator.
Take an “all hazards” approach since you may not be able to clearly identify all hazards that could happen to your business. Include prevention/deterrence and risk mitigation as part of the planning process. Refer to your Business Impact Analysis.
This is the old PDCA (Plan, Do, Check, Act). This should include identifying and assessing resources, writing plans, developing a system to manage incidents, and training employees.
Testing & Exercising
Train personnel, evaluate policies, plans, procedures, and employee knowledge. Is everyone in the boat? Consider a “dry run”; walk through a “test disaster”. Does everyone know what to do? Can alarms be heard? Can people be reached on their emergency numbers?
In addition to the dry run above, always hold a feedback session after a real disaster. What worked, what didn’t work so well, what was missing, what needs to be improved?
A small business cannot plan for every possible contingency, but if you do due diligence in preparing a plan as best you can, results can be significantly mitigated.
Check out the links below for more detailed information.
- Small Business Administration (SBA)
- Emergency preparedness checklist for small business
- Business Impact Analysis