How would your business respond after an emergency? We commonly plan for how to respond DURING an emergency, but put little thought into how we should respond AFTER a crisis has occurred. Business continuity planning can help to minimize business loss, improve continuity of operations, and protect the reputation you have worked hard to establish in your community. If your business becomes disrupted by a power outage, tornado, flooding or other disaster, it can cost you significant revenue and lost customers.

What is a Business Continuity Plan?

While you can’t predict the future, you can prepare for a disaster. A business continuity plan is a document summarizing critical steps to follow in the event of a disaster and aims at mitigating damage to the business (interruption in operations, protection of equipment, documents and other assets) and loss of life. When well prepared, a business continuity plan can protect your livelihood when disaster strikes. The goal is to be able to respond quickly and effectively under pressure to keep the impact on your business to a minimum.

According to the Insurance Information Institute, up to 40% of businesses affected by a natural or human-caused disaster never reopen. Developing a business continuity plan takes some thought and strategy, but it costs very little to do so. Investing a moderate amount of time and resources into formulating a strong response plan is well worth the effort. After all, your business isn’t a hobby — it’s your livelihood.

How Do I Develop a Business Continuity Plan?

Begin by reviewing several resources that discuss best practices for developing a strong continuity plan. Some resources to get you started include:

• ready.gov
• FEMA – Business Continuity Plan Template
• Department of Homeland Security
• Emergency Planning: Society Insurance

You know your business best, so make sure to tailor your plan to your industry. Consider your unique business operations and challenges. Sit down with your team to discuss strengths, weakness, allocation of resources and different disaster scenarios. All of this will get you going in the right direction, but consider obtaining outside help to ensure your plan is airtight and robust. You should also be aware that your business continuity plan will need to be updated periodically to reflect changes in your business.

Have an Immediate Action Checklist

In any emergency it’s important to react with purpose. A brief checklist keeps you organized and effective through an emergency situation. Consider making a checklist like this and keeping it on a clipboard in each department. Make sure to train your staff on how to use this document and establish a frequency for running through it. Remember, your business continuity plan is a living, breathing document. Your plan should be reviewed periodically for potential updates. Changes often occur with: staffing, products, services, vendors, and locations, so make sure your plan reflects those updates.

Think Through the Basics

During an emergency situation, it’s easy to overlook the most basic principles. It’s critical that you take the time to think about how you would respond in an emergency situation.  There are some basic questions you need to consider. First, think about where your fire extinguishers are located.  You probably pass it in the hall every day and don’t think twice about it; however, it will be crucial in an emergency situation.

Do you know where your main water shut-off is? This may be common knowledge, but every building has a different layout system. Do you think your business could operate at an alternative location? You should think about all the requirements your business needs to operate. During an emergency, you need to ensure that you have accurate employee and vendor contact lists. Make sure to share your plan with local first responders and emergency services. This way they know you’re businesses’ proper procedure.

Perform a Risk Assessment

A risk assessment allows you to realistically consider things that could happen that might affect your business. What do you need to know about risk? Risk can be dependent on location. For example, a hurricane is less likely to occur in the middle of Minnesota than it is on the southern shores of Florida.  Similarly, Chicago may be at a higher risk of a power outage compared to Oregon.

In order to properly perform a risk assessment, consider what is around your business and your community. Is your businesses near an air force base? Are you near a large body of water? Not all hazards apply to every location, but it’s important to keep your surroundings in mind.

What Are the Biggest Obstacles in Business Continuity Planning?

People are viewed to be the weakest link or most vulnerable area when it comes to business continuity planning. This includes people not being available when and where you need them, family conflicts, general lack of preparation and training. This is why it’s very important to properly train your staff and to understand that when disaster strikes, employees will want to ensure their family is safe first. Employees cannot focus on implementation of the plan if they are unsure of the status of their family during a disaster. Be aware of the impact on your staff. Is it a local or regional disaster? Can you work at a 50% staffing level? Think through this carefully.

How Will Your Business Be Affected During a Disaster?

Your business could be affected in a variety of different disasters, some of which are completely out of your control. Be prepared so that you can keep your business running — even when disaster strikes. Certain disasters, like devastating floods or hurricanes that impact an entire region, may go beyond your businesses’ continuity plan and its positive impact. However, these natural disasters are a lot less likely to occur on a regular basis. It is more likely that your business is going to be dealing with a local emergency.

These localized emergencies can have a huge impact on your finances and reputation. If you own a grocery store that loses power, you could lose the majority of your products which forces your customers to take their business elsewhere. Not only is it a huge hit on your finances, but it can severely damage your reputation. Certain people rely heavily on your products and services, so it’s important that your reputation is maintained. The financial and reputational impact can be immense.

Save Lives and Money with a Business Continuity Plan

Commit to developing a business continuity plan to mitigate loss of life and damages from a potential natural or man-made disaster. With a moderate amount of resources and time, you are insulating your business from unexpected and unforeseen unfortunate events. Simple or complex, any plan is better than none at all!

For more discussion about business continuity planning, view this webinar, Disaster Recovery: Developing a Business Continuity Plan.

To learn more about the small details that make a big difference for your business, contact a Society agent in your area today.