Planning for Every Emergency
Lorraine Ball
April 21, 2007
Accidents happen! But even minor mishaps can be major catastrophes for small business owners. Every year, thousands of companies are unprepared for the interruption caused by a minor fire, flood, and burglary or computer meltdown.
According to a recent NFIB National Small Business Poll, man-made disasters affect 10% of small businesses, whereas natural disasters have impacted more than 30% of all small businesses in the USA . Creating, and implementing a Business Continuity Plan will ensure your business survives any disaster; man-made or natural.
While the details of the plan will vary from business to business, the main elements are the same. A well thought out plan begins by evaluating different types of disasters or events. How likely is it to occur, and what are the potential impacts? Hurricanes are unlikely here in Indy, but Tornados and high winds (as evidenced by the damage to the Regions Bank building this spring) are very likely.
Once you have analyzed the risks, it is easier to outline a plan which will help you resume operations quickly, take care of clients and employees, and minimize the financial impact of the disaster.
What Your Plan Should Include:
Information Access – Copy and Store Key Files
For many small business owners, the computer is the heart and soul of the business. And while we depend heavily on these devises, we know that computers crash, virus’ attack, natural disasters occur and every user makes mistakes from time to time. The consequences of inadequate back-up protection when a failure occurs can be disastrous. Rebuilding financial information, contact lists, E-mail records or project files can be time-consuming, expensive and sometimes impossible.
Creating copies of critical files on a regular basis allows you to resume operations quickly after a crisis. How often you need to create a back-up depends on how often files change. Some business programs such as ACT and Quickbooks, have a built in back-up function. On a regular basis, they remind you to create a quick back-up copy which can be restored in case of an emergency.
Other common programs such as Microsoft Office or Adobe do not include their own back-up. In this case, the responsibility is yours. If you are using Windows XP it has a basic program which will schedule and run back-ups automatically. If you are using an older version, you can still manually copy key files.
In each case the data must go somewhere. While the programs offer to copy data to another portion of your hard drive, that won’t help if your computer is destroyed or missing. Important information should be copied to some type of external media such as a zip disks, CDs or DVDs, tape back-up or external hard drive.
Store your back-up off-site. Many business owners carefully and diligently copy all key files and store the CD’s or external hard drive right next to their computer, but a flood or fire will damage both. Your continuity plan should include an off-site storage location for electronic media. For a small business owner, this can simply mean taking the files home or trading with a peer, storing their files in your office, and yours in theirs.
A simpler, less tedious or time consuming solution is using an on-line backup. For a nominal fee, on-line back-up solutions allow you to store information on a secure, encrypted server. The program will run overnight, in the background, as long as you leave your computer on. The cost will vary depending on the amount of data to be stored. One of the advantages of the on-line system is that your data can be transferred via the internet to any location where you resume operations.
Operations Continuity – More than Data
Having access to your information is a key starting point, but business continuity plans need to address more than just data recovery. It should also cover how you will continue operations. For example:
Where will you operate if your office is damaged or destroyed? What is the minimum amount of space you will need? Does your landlord have other property you could move into temporarily? If not, take time now to research the costs and availability of space at local virtual office facilities.
How will you finance equipment replacement? A good insurance policy will cover the cost of replacing office furniture, equipment and other assets. As part of your contingency planning, review and understand your insurance coverage. If you are operating out of your home, talk to your insurance agent. Your simple homeowner’s policy may not be adequate coverage for your business. If you are renting, be sure you understand clearly what your landlord’s obligations are according to your lease.
In addition to property and casualty insurance, you should consider business continuity or loss of use clauses which provide additional insurance to cover expenses such as moving or damages caused by missed deadlines. Talk with your insurance agent regularly to be sure you are adequately protected.
Document what you own.
Even if you have adequate coverage, most policies require a detailed list of what was lost, damaged or stolen. In the event of a disaster, a documented inventory, complete with serial numbers and model numbers, will simplify the process of completing insurance forms required to submit your claim. Your disaster planning should include preparation of such an inventory, so you do not waste valuable time after the crisis trying to remember what you owned. Be sure to update this inventory periodically as you make new purchases for your office.
Who will take care of your customers if you can’t? In the event that you can not complete a project or meet a deadline because of the business interruption, do you have a relationship with someone else who can serve your customers on a short term basis? Negotiating emergency out-source agreements, including pricing and procedures, protects your long-term customer relationships by taking care of their needs even when you are not operational.
According to the Financial Planning Association, of the businesses that suffer a disaster, 40% fail to reopen and 25% that reopen close within a year. Plan ahead! Disaster may never strike, and you may never need to execute your plan. But if something does happen, a well thought out plan, will help you through the transition and increase the odds that a temporary business interruption does not become a permanent one.
According to a recent NFIB National Small Business Poll, man-made disasters affect 10% of small businesses, whereas natural disasters have impacted more than 30% of all small businesses in the USA . Creating, and implementing a Business Continuity Plan will ensure your business survives any disaster; man-made or natural.
While the details of the plan will vary from business to business, the main elements are the same. A well thought out plan begins by evaluating different types of disasters or events. How likely is it to occur, and what are the potential impacts? Hurricanes are unlikely here in Indy, but Tornados and high winds (as evidenced by the damage to the Regions Bank building this spring) are very likely.
Once you have analyzed the risks, it is easier to outline a plan which will help you resume operations quickly, take care of clients and employees, and minimize the financial impact of the disaster.
What Your Plan Should Include:
Information Access – Copy and Store Key Files
For many small business owners, the computer is the heart and soul of the business. And while we depend heavily on these devises, we know that computers crash, virus’ attack, natural disasters occur and every user makes mistakes from time to time. The consequences of inadequate back-up protection when a failure occurs can be disastrous. Rebuilding financial information, contact lists, E-mail records or project files can be time-consuming, expensive and sometimes impossible.
Creating copies of critical files on a regular basis allows you to resume operations quickly after a crisis. How often you need to create a back-up depends on how often files change. Some business programs such as ACT and Quickbooks, have a built in back-up function. On a regular basis, they remind you to create a quick back-up copy which can be restored in case of an emergency.
Other common programs such as Microsoft Office or Adobe do not include their own back-up. In this case, the responsibility is yours. If you are using Windows XP it has a basic program which will schedule and run back-ups automatically. If you are using an older version, you can still manually copy key files.
In each case the data must go somewhere. While the programs offer to copy data to another portion of your hard drive, that won’t help if your computer is destroyed or missing. Important information should be copied to some type of external media such as a zip disks, CDs or DVDs, tape back-up or external hard drive.
Store your back-up off-site. Many business owners carefully and diligently copy all key files and store the CD’s or external hard drive right next to their computer, but a flood or fire will damage both. Your continuity plan should include an off-site storage location for electronic media. For a small business owner, this can simply mean taking the files home or trading with a peer, storing their files in your office, and yours in theirs.
A simpler, less tedious or time consuming solution is using an on-line backup. For a nominal fee, on-line back-up solutions allow you to store information on a secure, encrypted server. The program will run overnight, in the background, as long as you leave your computer on. The cost will vary depending on the amount of data to be stored. One of the advantages of the on-line system is that your data can be transferred via the internet to any location where you resume operations.
Operations Continuity – More than Data
Having access to your information is a key starting point, but business continuity plans need to address more than just data recovery. It should also cover how you will continue operations. For example:
Where will you operate if your office is damaged or destroyed? What is the minimum amount of space you will need? Does your landlord have other property you could move into temporarily? If not, take time now to research the costs and availability of space at local virtual office facilities.
How will you finance equipment replacement? A good insurance policy will cover the cost of replacing office furniture, equipment and other assets. As part of your contingency planning, review and understand your insurance coverage. If you are operating out of your home, talk to your insurance agent. Your simple homeowner’s policy may not be adequate coverage for your business. If you are renting, be sure you understand clearly what your landlord’s obligations are according to your lease.
In addition to property and casualty insurance, you should consider business continuity or loss of use clauses which provide additional insurance to cover expenses such as moving or damages caused by missed deadlines. Talk with your insurance agent regularly to be sure you are adequately protected.
Document what you own.
Even if you have adequate coverage, most policies require a detailed list of what was lost, damaged or stolen. In the event of a disaster, a documented inventory, complete with serial numbers and model numbers, will simplify the process of completing insurance forms required to submit your claim. Your disaster planning should include preparation of such an inventory, so you do not waste valuable time after the crisis trying to remember what you owned. Be sure to update this inventory periodically as you make new purchases for your office.
Who will take care of your customers if you can’t? In the event that you can not complete a project or meet a deadline because of the business interruption, do you have a relationship with someone else who can serve your customers on a short term basis? Negotiating emergency out-source agreements, including pricing and procedures, protects your long-term customer relationships by taking care of their needs even when you are not operational.
According to the Financial Planning Association, of the businesses that suffer a disaster, 40% fail to reopen and 25% that reopen close within a year. Plan ahead! Disaster may never strike, and you may never need to execute your plan. But if something does happen, a well thought out plan, will help you through the transition and increase the odds that a temporary business interruption does not become a permanent one.