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Disaster Continuity Planning
June 1, 2010

According to a report by SCORE on the impact of disasters on U.S. small businesses, natural and manmade disasters have increased by 40% over the last 15 years. The likelihood that you'll experience one is too high to ignore. About 25% of businesses do not reopen following a major disaster. You need to plan ahead to make sure you can weather the storm (pun intended) and continue to be profitable.

Make a plan
Like a business plan or a marketing plan, a disaster continuity plan should be something every business has on hand and keeps up to date.

Step one: Anticipate the types of disasters you could face (such as a pandemic, flood, terrorist attack, or merely an area power outage that lasts more than a few hours). This will enable you to determine the best course of action for a particular type of disaster. Obviously, different plans are needed to address a pandemic versus a power outage.

Idea: Include your supply chain in your plan. You may not experience a devastating storm, but your supplier may be put out of business by one, so plan accordingly. Your plan may include stockpiling some items and developing a list of "backup" vendors you can turn to in case of a disaster.

Step two: Make "what if" plans. Can your business operate from an alternate location if your current one is impacted by a disaster? Can your staff work remotely until power is restored at your location? Make a list of all the what-ifs you can think of and then decide what to do about them. For instance, if you determine that your business can operate by allowing staff to work from their homes, then set up the way in which you'll inform them about working remotely (e.g., a posting on your website or a call-in phone number).

Step three: Review your insurance coverage. You can't completely avoid loss resulting from a disaster, but insurance is a way to share the risk of loss.

  • Meet with a knowledgeable insurance agent to help you assess your risks.
  • Obtain the appropriate type of coverage for your risk exposure. For example, if you are located in a flood area, you'll need special flood insurance. If you can afford it, consider business interruption coverage to pay your overhead (including employees' wages and rent at an alternative location) when disaster closes you down.

Step four: Encourage your staff to create their own personal plans. In case of a disaster, an employee's first concern is his or her family; he will be unlikely to be available for work during this time. However, if you help your staff make disaster plans, then they may be able to deal with family matters and still continue to work.

For example, if there is a pandemic and an employee's child becomes ill, the employee may need to stay home to attend to the child. But if the child's school is closed even though the child is well, your employee can work if child care arrangements can be made. Suggest that staff members develop back-up arrangements for such contingencies.

Resources to help you develop your disaster plan:

Attend to your data
Where is your data stored (on-site or off-site)? What happens if your location is damaged or destroyed by a disaster? According to the National Archives & Records Administration, 93% of companies that lost their data center for 10 days or more as a result of a disaster filed for bankruptcy within one year of the disaster.

  • Use a data backup system. Automate this function so you are sure to always be up to date. Even with cloud computing (where you access your data, online services, and tools through the Web), backup is advisable; you don't really know where your data is being stored. The price depends on the amount of data you regularly back up, but the cost is modest compared with the cost of data reconstruction.
  • Protect papers. You'll want copies of some papers, such as tax returns, contracts, and agreements. Scan them into your computer and follow data backup suggestions. If you choose to store papers in a fireproof safe or offsite, be sure they are safe and that their location is known to others in case of an emergency. At a minimum, keep them in a Ziplock bag to prevent water damage.

Find more information at Disaster Recovery Planning. 

 

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