Is Your Business Flirting With Disaster?
Consider what would have happened to your business if you had been
in the path of the destructive tornados that struck Missouri in May
of this year. Would your business be able to survive? According to the
Institute for Business and Home Safety, only 25 percent of businesses
that close down following a disaster ever reopen.
Missouri has seen its share of disasters in recent years. Floods,
ice storms and tornados are always a threat to Midwest businesses, which
can also fall victim to fires or pipe bursts during a cold snap. To
protect your business from such eventualities, consider the following:
- What should you do to protect your building, business equipment
and outbuildings associated with the business? This might involve
the purchase of plywood shutters or safety film, elevating valuable
contents on shelves, restraining items such as desktop computers and
hot water heaters or relocating combustibles.
- What if your suppliers are shut down? Develop a list of your most
critical vendors, and notify them if you must close for a time. If
they are affected by a disaster, find out what their plans are for
reopening. Consider developing a relationship with other suppliers
now in case your usual supplier closes.
- What records do you need? Every business owner understands the importance
of backing up computer files, but not everyone does it. Some experts
recommend that computer records should be backed up off-site at a
location at least 50 miles from the business. This includes but is
not limited to payroll, tax, accounting, customer, vendor, inventory
and equipment records. Be sure to keep hardcopies of records such
as insurance policies and leases in an off-site location as well.
Consider documenting equipment, furniture and inventory through photos
or videotapes.
- What if you are forced to relocate temporarily? Where would you
go? How would you notify clients and vendors? Could your phone and
other communication devices transfer to another location?
- What about insurance? Review your policy. Determine what perils
are covered and which are excluded. Floods and earthquakes are often
excluded from coverage unless added for an additional premium. Does
the policy cover leased items? Does it cover property belonging to
other individuals that is damaged while on your premises? Does it
cover business property away from the business location? Should you
consider business interruption insurance?
- Meet with employees and/or family members to develop an emergency
plan, and review it on a regular basis. Be sure the plan includes
evacuation strategies and a designated contact person outside the
immediate area to whom everyone should report. Develop a list of contact
numbers for employees so you can get in touch with their family members
or medical providers if necessary. Be sure everyone associated with
the business knows where the shutoffs are for water, electricity and
gas and how to use them. Gas should be shut off only if you smell
gas or if a broadcast message indicates this should be done. In some
areas, if you shut gas off at the meter, it can only be turned back
on by the utility company, which is a fee-based service.
- What emergency supplies should you have on hand? In addition to
the standard smoke detectors, fire extinguishers and burglary alarms,
consider developing a disaster kit with the following: NOAA weather
radio, first aid kit, flashlight/batteries, pencils/pens, paper towels,
plastic bags, camera/film, basic tool kits (wrenches/gloves/crow bar),
a supply of bottled water, nonperishable food and some cash.
- How can you help customers? If you plan ahead, you may be able to
continue serving customers. In case this isn't possible, have a plan
for alternative resources for your customers. They will more likely
remain loyal and return to you after you reopen if you have gone to
the trouble of meeting their needs while you were unable to provide
products or services.
Business owners invest substantial amounts of time and resources into
developing the business,
the customer base, supplier relationships and image, yet the Public
Entity Risk Institute reports that fewer than 5 percent of small businesses
have any form of documented disaster plan. Large companies often hire
risk managers or outside consultants to handle this task. Small business
owners usually have to do this planning on their own.
The preparation of a disaster plan may seem overwhelming. Fortunately,
there is an excellent resource that can help small business owners develop
a disaster plan in a relatively painless way. The Institute
for Business and Home Safety website includes a complete "Open For
Business Toolkit" covering topics such as "Developing Your Recovery
Plan" and "Protecting Your Building and Its Contents." In addition,
the toolkit provides templates for creating lists such as emergency,
creditor, supplier and customer contacts, a disaster supply checklist
and an insurance coverage discussion form.
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Authored by: Barbara Cunningham, Business and
Industry Specialist, University of Missouri Extension
Source: Creating Quality Newsletter, Volume
12, Number 8, August 2003
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