Is Your Business Prepared For A Catastrophe

By Philip Elworth

According to the Small Business Administration, 25% of businesses that close because of a disaster never reopen; 80% of businesses that do not recover within one month are likely to go out of business.

“It will never happen to me” is not an answer. The fact is- it can happen to you because you cannot control the total environment. I recently attended a panel discussion on a local charity re-sale shop that just a few months ago had a fire that totally destroyed the building that housed their shop. The fire was caused by a major wind storm that dropped a power line on their building, which then caught fire. Nothing could have done to stop this catastrophe.

There are three major areas of disasters to consider:

• Natural hazards; fires, floods, wind storms, tornados, snow, rain; but this could also include an outbreak of H1N1 that knocks out half your production staff.
• Technology hazards: Loss of critical data or computer; being hacked; losing a key piece of production machinery.
• Terrorism: explosions or attacks, may not affect your business directly, but what about transportation of employees, supply interruption, both materials in and out of your area? What about a disgruntled worker seeking revenge? A theft of cash or other key assets?
• Other major business risks: Loss of key customer; loss of key supplier; loss of key employee.

I challenge you to take this Business-Ready Quiz:

• Have you determined how long your company can afford to be closed before the business is critically affected?
• Have you developed, documented and tested a comprehensive business continuity plan for facilities, employees, processes, systems, data and networks that addresses recovery and restoration, as well as internet communications?
• Have you determined how your business will operate should key business partners and vendors be affected by disruption or disaster?
• Have you negotiated vendor contracts or lease agreements necessary to acquire equipment and services in the event of a significant disruption or disaster?
• Are your employees trained to know how to respond to an emergency/disaster where you may have little or no warning before it occurs?

This quiz was developed by the small business development center at Harper College in Illinois in conjunction with the Small Business Administration. If you answered no to any of these questions then you are not ready to face a disaster. If your business is an Illinois business you can start developing a business continuation plan at no cost to you. Contact me at pelworth@b2bcfo.com and I would be happy to make this connection for you which is funded by our tax dollars through Harper College and the SBA.

Business continuity is the key: identify the risks then determine a plan to stay in business. Ask yourself what you would do if you could not get to your office? What core business functions do your customers rely on that must continue without interruption? Have a “go-box”, offsite storage of key plans documents, data, pictures and processes that you need to stay in business. Lack of planning is not an option when your business is being affected by forces outside of your control. Take charge now.