Take these steps to protect your business and keep it running in case of a natural disaster or business interruption. Make a written plan and practice.
We can’t avoid hearing about earthquakes, hurricanes, fires, and other natural disasters. In addition to dramatic disasters, internet or power outages can also slow or halt your business. Some surveys have found that up to half of small businesses don’t have a plan for downtime or business interruptions — or a disaster recovery plan.
What does this mean for your business? The time to put a plan in place isn’t after your business comes to a halt: you can only plan for a disaster before it happens. NYC IT services professional Fred Hoffman of Network Outsource shares his thoughts.
What could happen if my business goes down for any length of time?
The statistics might surprise you. Up to 40% of small businesses don’t reopen after a disaster, according to the Federal Emergency Management Agency (FEMA). Of the remaining businesses, 25% fail in one year after a disaster. A study by the ESG consultancy group found that 63% of businesses they surveyed would experience negative impacts on their bottom line with only four hours of downtime.
Especially if your business relies on daily income — for example if you’re in retail or the food industry — what would half a day of lost business do to your monthly bottom line? Even if you don’t rely on hourly billing to the extent that a few hours of downtime would do significant damage, ask yourself what the consequences would be if your business was closed for a few days, or a week or longer?
How do I plan to keep my business going in case of disasters or other interruptions?
Here’s a list of steps to take in your planning process:
- Identify your organization’s disaster risks based on your geographic area and events you know could possibly happen.
- Identify any internet downtime or power outage risks and events.
- Review your insurance policies: make sure you have coverage and contact plans in case of disaster.
- Identify key tasks that have to be completed for your business to stay in business.
- Make sure at least two staff members know how to do each key task.
- Establish a communications plan: how will you communicate if cell phones and the internet are unavailable?
- Identify a physical central meeting location where employees and team members can meet in case of a serious disaster or interruption of business.
- Maintain emergency contact information in paper form.
- Decide who will talk to the public/customers about downtime and recovery plans and what they will say.
- Have redundant backups of essential information, and keep paper copies of all essential documents stored in a safe, accessible location.
What should I do next to ensure our continuity plans work?
Test them with a reliable associate — don’t rely on re-running the plan through with existing team members. Write your plans and procedures down in a formal disaster and continuity plan. Consider staging a “mock disaster” — you’ve probably been part of some community disaster re-enactments. These not only bring people together and help to identify any potential problems before disasters occur, they are great team-building exercises.
Once you have your continuity plan in place, written down, and tested, you can be confident that your business won’t be in the group that fails after a disaster or lengthy interruption in business. After a disaster, your business will also need a recovery plan. How do you plan to get back into business after a significant disaster? A disaster recovery plan should also be written down. Don’t underestimate how long it will take to get things up and running again. Some areas that suffer natural disasters take weeks for basic services to be restored, and months and even years for full functionality to return. Plan for the worst you can think of, and you will have a much smoother, quicker return to “business as usual” after a business interruption — for whatever reason.