Preparing for the Worst

Whether your business is in an area that's at high risk for natural disasters such as tornadoes or hurricanes or in an area where nothing ever seems to happen, it pays to be prepared for the worst. Just as most people know they need to make a will but very few actually have them, every business owner needs to have a crisis- or disaster-preparedness plan.

What's the worst that could happen?

First, there's a difference between a crisis and a disaster. A crisis is not dangerous, but can harm your business, as in the case of a product recall or a public relations crisis. A disaster is characterized by great damage, difficulty or even death, as in the case of a hurricane or tornado.

Both types of events could derail your business, but in very different ways — and planning for each takes an understanding of what could happen and forethought about how to handle the problems that are likely to arise.

Crisis planning

Whether it's employee misconduct or a similar scandal, claims of product liability or some other public relations nightmare, the "storm" will pass faster if you:

• Make a crisis communications plan, detailing who will talk to the public and reporters.
• Get to know media people — including local reporters, industry-specific journalists and Internet reporters — during the good times so that you'll have their ear when you need someone to cast your company in a positive light.
• Know what to say and repeat it — don't get rattled by reporters and stray from the script.
• Be calm, honest and concise in speaking with the public.

Ready for disaster?

Disaster planning requires a lot more thought than crisis planning — because you're not only trying to protect your image, but also your facilities and perhaps the lives and well-being of your staff.

Create a Business Continuity Plan (BCP) that includes the following elements:

• Internal contacts — Make a list of key personnel (those who are necessary for the day-to-day operation of the business) with several forms of contact information for each.
• Remote access — Ensure that key personnel have the ability to work from home, if necessary.
• External contacts — Compile another contact list for critical vendors and other contacts such as IT consultants, attorneys, bankers, your Internet service provider, utility companies and any others you may need in the aftermath of a disaster.
• Reliable backups — Make certain that the server — and critical information on individual desktops — is being backed up offsite.
• Temporary headquarters — Find a "contingency location" — a temporary yet well-equipped location for your business to set up shop while you repair or rebuild your offices.
• Emergency action team — Create a list of key staff and what their responsibilities will be in case of an emergency. Print out two versions of the list — one organized by name, the other sorted by tasks.

Once all the information is compiled, assemble the whole plan in a binder (making sure to have several copies) and store it in a safe place. Make sure the key personnel listed in the plan know both where the plan is stored and what they are expected to do in case of emergency.

Picking up the pieces

How fast and how well your business recovers from a natural disaster depends on several factors:

• How well is your business established? New businesses have a much more difficult time rebuilding, unless they happen to be part of a larger franchise that has more resources and support available than an independent small business.
• What will it cost to rebuild? Assess the damage and determine what it will cost to rebuild your building and replace damaged inventory. Calculate not only the cost of rebuilding and replacing but also how severely your cash flow will be affected. Then find out from your insurance agent what will be covered and for how much, including what business-interruption insurance covers.
• Are your customers also rebuilding? If your customers aren't in a position to buy or they have cash-flow problems, you may need to expand your market reach. Ironically, you may survive and thrive if your business is integral to helping your area to recover and rebuild (as in the case of home-improvement stores or construction companies).

As you create your Business Continuity Plan, remember to be open to options, resources and changes that need to be made to the plan. The Red Cross and FEMA have excellent disaster-planning information available for small businesses.

Even with the best of plans, flexibility is key to weathering a crisis or disaster.

Corporate Express is a single-source international partner that provides a variety of products and services to assist businesses. To learn more about CE's products and services, contact us at 1.888.238.6983 or visit www.corporateexpress.com.

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