#826 Contingency Planning

What this episode covers

I am an optimist. I believe things will work out.  However, when it comes to my business I also know that things can go wrong, and planning is not being negative, it is being prepared. Accidents happen. 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. Creating, and implementing a Business Continuity Plan as part of your overall business plan ensures your business survives any disaster. Are you prepared? I have seen studies which say anywhere from 25 – 75 percent of businesses suffering a disaster fail to reopen or close soon after. While the stats may vary, the general consensus is a well thought out recovery plan matched with appropriate insurance makes the difference between survival and business extinction. What should your disaster planning process include? Computer Backup – For many small business owners, the computer is the heart and soul of the business. Unfortunately computers crash, there are hackers and virus’ attack, natural disasters and every user makes mistakes from time to time. The consequences can be disastrous. Rebuilding financial information, contact lists, E-mail records or project files can be time-consuming, expensive and sometimes impossible. Online backups are very affordable. Not sure if you need to spend the money? Ask yourself these questions: If my computer didn’t turn on tomorrow: Would I still have a business? Would I lose a significant amount of time, and money rebuilding my data Would I know what to do? Don’t like the answers? Then it is time to explore a back up solution. Equipment Replacement – Beyond restoring your data, you need to plan for equipment replacement. Talk to your insurance agent to be sure you have enough coverage to replace furniture, equipment, inventory and other assets. Take the time to inventory all the assets in your building. Have a list of important equipment, serial numbers, purchase date and even photos. This will really simplify the process of filing an insurance claim. Temporary Location – Where will you and your team work if your building is not accessible? Putting systems in place for employees to work remotely is helpful even if it is only a day or two interruptions caused by inclement weather. You just don’t want to test those systems for the very first time when something big goes wrong. Funding operations – Disasters have a way of piling up. Not only will you need to deal with the things listed above, you may incur additional expenses for moving or damages caused by missed deadlines. Business continuity insurance will help cover the other unexpected costs. Customer Care – In some cases, you won’t be able to complete a project because of a serious interruption to your operations. Having a relationship with another firm who can take care of your customers in the short term will allow you to preserve the customer relationship for the long term. Disaster planning is not a set it and forget it kind of process. If you are smart, you will revisit your crisis plan every year. Why? Because as your business grows, your risks grow as well. You may be lucky and never have a fire, flood, burglary or another disaster. But a little disaster planning now will save you lots of headaches down the road.

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