Monday, November 28, 2011

Creating a Strategic (Emergency) Contingency Plan

None of us likes to think of the worst case scenario, but if the bizarre weather the East Coast has faced haven't taught us the need to plan, nothing will. Hurricane and floods affecting the ENTIRE state of NJ? Pre-Halloween blizzards taking out power? The following is a cross-post from Bolts of Lightening in OED's Community site. Read on and prepare BEFORE winter settles in with its snow, winds, ice, HVAC system chaos, and inevitable electrical issues that often ensue.

It's the kind of situation that none of us like to think about--a fire burns the headquarters or a flood damages inventory and closes Main Street. But it's the kind of situation every small business needs to be prepared for. We only need turn on the evening news on television to be reminded of the devastating consequences of fires, tornadoes, floods, and hurricanes.

The best way to prepare is to create a strategic contingency plan that will keep the business operating, even if only on a reduced basis, until the damage can be repaired or the business otherwise restored. Such a contingency plan need not be very complicated or involved. But it should answer certain key questions, among them the following:

· What are the most important elements to keeping this business operating?
For some businesses, like food or hardware stores, it is a matter of having inventory available as quickly as possible. For other businesses, like professional service firms, it is a matter of being able to get the professionals together to service clients. Whatever the most important elements are for your business, figure out what you would do if a natural disaster interrupted operations. Talk to your suppliers about what they would do, and with your key employees for their car phone numbers or addresses of close relatives.

· Where would we operate?
If your store or office were damaged, you need another place to set up operations. This might be in the owner's house, or it could be in a warehouse the company owns. The important thing here is to consider the options, and prioritize them if you have more than one choice.

·How would we communicate with each other?
In a flood or hurricane, especially, electricity and even telephone communication can be knocked out. Make sure you know everyone's home phone number and all employees' current addresses. Involve several people in the company in drawing up the contingency plan so that they are alert to the importance of communicating information about new location and hours of operation during an emergency.

· Do we have backup copies of important records?
In order for the business to be able to carry on in an alternative location, it should have access to its records. Consider what would happen if the records were destroyed or damaged by fire or flood. In today's age of computers, it is reasonably easy to have backup records of customer and supplier lists, provided someone is charged with regularly updating files. Old paper records should be regularly moved to an offsite location; this increases the odds they will be available in an emergency.

· Do we have all the insurance we require?
As just one example, you may want to be sure you have insurance covering you for loss of business time. This could provide critical cash to enable you to re-start operations.

The key issue in putting together such a strategic plan is anticipation. The key questions raised boil down to this: What do you need to continue operations, and how would you ensure that what you need is readily available?

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