Your future is too important to be left to chance!
If your business suffered a disaster of any kind would you be able to reopen quickly and stay open? Research in Australia showed that 43% of businesses suffering a disaster did not reopen. Having a Business Diaster Avoidance and Recovery Plan in place can help you avoid becoming another statistic.
Your Plan does not need to be extensive but there are several, simple precautions you can take:
- Review you building security to ensure it isn't easy for vandals or thieves to get in. Ensure you bank cash daily and maintain minimal cash on the premises. Develop lock-up and security checklists.
- Review your fire procedures to ensure your key resource, your staff, can get out. Install and service fire equipment regularly including fire extinguishers, smoke alarms, and sprinkler systems.
- Review all records, and rate them for importance: are they critical, necessary, or optional? You can then decide what you are going to do to protect each of them. You may decide that you want to purchase a fireproof safe to protect the critical documents. You may decide you want to copy certain records regularly and store them offsite.
- These days most of your information will be stored on computer. Your first priority must be to ensure you have daily and weekly backups - in case the server doesn't work. You then need to consider storing back-up tapes offsite in case your building goes up in smoke.
- Insurance coverage is vital. Look at what you have in place and plan to review it regularly including updating market valuations and asset listings. You should have coverage for both property damage and loss of profits from business interruption.
If you have take precautions you are less likely to have a major disaster and if the unthinkable occurs it will not have such a significant impact.
Statistics show that for businesses to have a chance of surviving a disaster they need to be back up and operating within five days. After five days, even loyal customers will seek alternative suppliers and employees will reconsider their position with your business. This means you also need to plan for what to do if your business is affected by a disaster.
There are several key elements which will form part of a "5 day emergency" Plan.
- Think of all the important details you will need in the event of a disaster - bank account details, insurance details etc and have them stored off site.
- Contact your insurance company immediately and get their agreement to the implementation of your recovery plan. Have a list of all the documents you will need to substantiate your claim stored off site.
- Contact the authorities and have emergency facilities restored - telephone, electricity, gas etc. Remember you may need increased security! Again store all these details off site.
- Work out how you are going to get your communication lines up and running as soon as possible. You must tell your clients what is happening before they cannot get hold of you. Get a message put on your phone in case clients call then contact them with whatever equipment you have at your disposal. You need to reassure them that you have things under control and keep them updated on developments. Make sure that you have a client list stored off site.
- Inform the bank and find out what support (or otherwise) they will provide. Will they continue to honour your existing loan facilities? Will they provide the additional funding to bridge your reconstruction as you await your insurance payout?
Sometimes planning for what "might" happen may seem like too much hassle. However, a little work now will save a lot of pain and perhaps your entire business in the future. You don't have to spend days on it - work out what is critical to the survival of the business and what you can do to ensure it continues to function after a disaster.
This article appeared in Pitcher Partners client newsletter 'Contact'. Pitcher Partners is a member of Baker Tilly International.
Baker Tilly is a trademark of the UK firm Baker Tilly UK Group LLP, used under licence.
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