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The Day After the Fire - Is Your Company Open?

File folders with various titles like Disaster Recovery Plan, Procedures and other titles. The day after the fire - is your company open?

1/12/2017

We all do it. PG&E sends us a list of how to prepare for an earthquake. We keep the list but never buy the water and supplies. Somehow we magically think we’ll have time in the future.

What we do in our private lives, we also do with our companies. Whether the calamity is fire, earthquake, data breach or some other overarching incident, both the immediate impact of the event on your employees and the amount of time it takes your company to become fully operational again, will be directly proportional to the quality of the plan you’ve developed and implemented.

In 1993 when the World Trade Center was attacked, it took Morgan Stanley 4 hours to evacuate their employees. They realized their plan needed revision. On September 11, 2001, Morgan Stanley evacuated their employees in 45 minutes. Lives were saved by planning.

While we can’t foresee every possible implication of a disaster, we can offer guidance on the major areas a plan should cover and how to implement it.

Here are the components of a disaster and recovery plan:

  1. Prepare to Stay in Business. Be informed of the most likely risk profile for your area. Then analyze what staff, materials, procedures and equipment are absolutely necessary for operation. You’ll want to consider your business process flow in this analysis and you will want to include employees at various levels in your planning team. Key elements will include emergency payroll, financial decision-making and functioning accounting systems.
  2. Make an Evacuation Plan. Your plan should include a chain of command, an assembly site, a shelter-in-place plan and should address fire safety issues. Fire is the #1 cause of business disasters.
  3. Back- up and Protect Your Data. With cloud storage becoming so affordable, you will want to develop a plan to back up data regularly in the cloud. You may also want off-site servers. For even small businesses, accounting systems like QuickBooks Online makes cloud storage practical.
  4. Protect Your Investment. Have an insurance check-up with your broker. Find out what sorts of losses or interruptions are covered by your policy. Ask your insurer what kinds of records the insurance company will want to see after an emergency to provide coverage and store them safely.
  5. Put it in Writing. A Business Continuity Plan will address how to keep things orderly in the event of a disaster, ensure employee safety and help with business continuity. FEMA has several helpful checklists to help you get started. See: https://www.fema.gov/media-library/resources-documents/collections/357. The Insurance Institute for Business and Home Safety also has a step-by-step plan for a small business to create a Business Continuity Plan specifically targeted to small businesses. See: http://disastersafety.org/wp-content/uploads/OFB-EZ_Toolkit_IBHS.pdf.
  6. Communication Planning. Communication is vital during and after an emergency. Your plan should address who is responsible for communicating with whom.
  7. Have a Team to Respond. Recovering from a disaster can be very time consuming and costly. It is best to recover as quickly as possible. By training and assigning specific tasks and responsibilities to a team, everyone will have specific roles and know their duties. By spreading out the work load and delegating, time and money can be saved.
  8. Test the Plan. Many things in life often look better on paper than in practice. To avoid this, test the plan out and see where it falls short. The part of the plan that does fall short might be the most crucial bit.

Anticipation and planning are the keys to an effective
Business Recovery Plan.

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