Lonnie Lehrer thought he was prepared for anything. The CEO of
Leros Point to
Point, a New York City limousine service, had redundant
computer systems for his dispatch software, battery backup for each
computer, off-site copies of his customer data, even a spare
generator. If New York were nailed by a bad winter storm or another
big blackout, Leros would still be in business.
Then the first plane hit the World Trade Center on September 11,
2001, and all Lehrer's plans went down with it.
"Ninety percent of our business is tied to the
airports," says Lehrer, 55. "We went from being a $7
million company to a $700,000 company overnight."
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Lehrer knew if he didn't move fast, he'd be out of
business in a week. Within two days, he'd slashed his own
salary by 50 percent, negotiated a moratorium on loan payments with
Ford Motor Co., and told his drivers they'd be facing a few
lean months of partial salaries until business picked up. He also
had to drop drivers who were independent contractors, lay off two
staffers and reassign others temporarily.
But Lehrer's quick reaction paid off. Business slowly
returned and is now better than ever: Leros recently acquired two
smaller companies and expanded operations, bringing annual revenues
to nearly $9 million in 2002.
Another reason for Leros' rebound: "Some of our
competition disappeared after 9/11," Lehrer says. "The
ones who were already on shaky ground just faded away."
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The fact that Leros had any disaster plan at all puts it ahead
of most companies. According to an August 2002 study by the
American Management Association, more than half the corporations
surveyed had no crisis-management plans in place. And the smaller
the business, the less likely it is to be prepared. Analyst firm
Gartner Inc. reports that less than 10 percent of small and
midsized businesses have plans in place to manage crises and ensure
business continuity, and that 40 percent of companies hit by a
disaster will go belly up within five years.
"Small companies often spend more time planning their
company picnics than for an event that could put them out of
business," explains Katherine Heaviside, principal of Epoch 5, a Huntington,
New York, public relations firm that specializes in crisis
communications.
The reason? Many entrepreneurs believe that preparing for
disaster is too expensive or time-consuming. But that's not
necessarily true, say crisis-management experts. The most important
steps for surviving a crisis cost little or nothing. Being
unprepared, however, can be the costliest strategy of all.
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