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Tips for Dealing With Business Disasters

No business is ever safe from harm. This guide will show you how to plan for and bounce back from an unexpected crisis--and keep your customers in the meantime.
June 10, 2005
URL: http://www.entrepreneur.com/article/78212

It's going to happen some day: A key employee is badly injured in an accident; a power outage knocks out your computers; a tornado takes out your warehouse. Unexpected emergencies can momentarily shut down operations, or even worse, put you out of business for weeks and force your customers to go elsewhere--and stay there. Are you prepared for this? It's not as difficult as you think. Here's how to plan for the inevitable:

Step 1: Determine what can go wrong. The first thing you should do is complete what's commonly referred to as a vulnerability or risk assessment. This assessment will identify what could go wrong, the effect on your business if something does go wrong, and what priority you should take in minimizing your risk exposure. During this assessment, you should:

Step 2: Develop a plan. An emergency action plan is a written procedure manual for dealing with the threats you've identified in step one. Some of the components of your plan will be prescribed by law, regulations or good business sense. Among these are an OSHA-directed evacuation plan, adherence to the provisions of the 1996 Health Insurance Portability and Accountability Act, the Sarbanes-Oxley antifraud law, or the National Fire Protection Association's Life-Safety Code.

When there's a legal requirement to do something, you're usually--but not always--told how to comply. There are a number of different ways to create your emergency plan; however, all emergency plans tend to have the same basic elements. According to the National Safety Council, emergency actions plans should contain the following minimum elements:

All your procedures should be documented in writing.

Finally, ensure that you have a way of contacting your customers should you have the need. A press release, an e-mail or a sign that directs them to a new location or provides them with information on when you'll be back in business go far in reminding folks that your reputation is dependent on taking care of your customers.

Step 3: Be ready to respond. Once you get the basic emergency action plan written, tell your employees! Make sure they know what's expected of them in an emergency--any kind of emergency. If they haven't been involved before, give them an opportunity to "dry run" the plan and talk over how things might go in an emergency scenario (this is called a tabletop exercise). You might find that there are changes you need to make to some of the plan's details. That's good. No plan is perfect, and it's not even a plan until it's been tested.

Be sure to share your response protocols, especially your evacuation procedures, with the local fire department, emergency medical service and police department. These are likely the first type assistance to arrive on the scene, and they'll need to know what actions you've taken. When they've been apprised of your emergency action plan ahead of time, they're better prepared to help. As well, they're experienced with these kinds of plans and can provide valuable insight that you may want to incorporate into your written plan.

Some other areas of training for your employees that'll help mitigate the effects of an emergency and provide huge returns in employee satisfaction and business reputation include:

Training is an important and relatively inexpensive part of emergency preparation that may save a life. More important, proper training can prevent an emergency from becoming a disaster and make all the difference between closing down operations for a few hours and being out of business indefinitely.

Step 4: Get back to business. Once you've implemented the first three steps, take the time to think about the worst-case scenario and make some plans for how you'll recover. Some questions to think about--and answer--include these:

There are many more questions you could ask yourself, but I'm sure you get the idea. What will it take for you to get back into business quickly? You might be very proud of getting your operations back up in three weeks, but if your competitor does it in one, where will your customers go? How much will your reputation suffer?

Remember, there's no way to guarantee that once you're in business, you'll stay in business. It's up to you to plan ahead and be prepared by creating the most resilient business possible.


Charles S. Thomas is the managing director of CACH International Ltd. Co. , an internationally recognized firm that provides business continuity and crisis response consulting services.