Disasters In Business
What if something went wrong in your business? Are you protected? Do you know what needs to happen in case of an emergency?
These are just a few questions you need to ask yourself as a business owner. When adversity hits the fan, you need to be confident that your systems, processes, and procedures are in place for you to succeed. We decided to give you a few tips for you to be prepared for a business disaster. Some of these disasters happen naturally, possibly a loss of a client or even a key team member in your business. There are also other disasters such as:
1.Natural disasters: floods, earthquakes, wildfire, tsunami, hurricanes etc.
2.Man-made disasters: electricity power outage, technical disaster (such as a cyber-attack on financial data, server failure etc.), riots, fire etc.
One of the most important steps towards protecting a business and ensuring its survival is to create a basic, executable plan for disaster recovery – irrespective of the type of disaster situation. The Small Business Association (SBA) of USA terms it as Disaster Preparedness and Recover Plan (DPRP). Even though, every business would have its own set of risks identified, below are a few useful steps of action items that should be a part of a generic DPRP for every business – large or small.
- Doing a complete assessment of plausible risk factors: Depending upon the business’s geographical locality, weather pattern and demographic patterns identify threats of natural disasters like floods, earthquakes, tsunamis etc. Also, methodically list out possible technical disasters by looking into the technical components of the business’ operations.
- Analyzing the business critical functions: Figure out the critical areas of the business to continue its basic operations. Irrespective of the size of the company the most prioritized functions generally are: service fulfilment, billing and payment. Depending on the size and type of the business, this list may be much specifically elaborate.
- Secure data backup and restoring it to test the technology: Prepare and use a back-up location far off from the business’ operation (physical distance and/or virtual separation through the web). Secure it from potential threats like theft, vandalism, online hacks etc. and store all important business data in there. Also periodically practice to electronically restore these backups in the active system in order to check compatibility and maintain business continuity.
- Create a disaster recovery communication plan: As part of the DPRP setup process, list down the names and contact details of all employees, vendors, key clients, insurer and local emergency authorities. Establish a communication plan, to be triggered right after the business is hit with a disaster, to reach out to each of these stakeholders. Delegate this task to one or more employees so that the information reaches to the right person without any delay. It is very important to have the stakeholders informed and updated of the disaster and its impacts on the business. It helps to avoid unnecessary confusions and anxiety and to take adequate actions on the recovery part of the plan. Also, it speaks of the business owner’s sense of responsibility which again would give the business a reputation of trust.
- Set up emergency protocol for your employees: In case of any natural or man-made disasters, have your employees trained and prepared. Set up, communicate and regularly practice a clear set of instruction to get them used to the idea of how to avoid panic and take responsible actions in times of crisis.
- Select an alternate location: Plan for and select an alternative business location beforehand, in case there comes a need to shift from the current location of operation.
- Consider supply chain risks: Oftentimes, a business may face bottlenecks from its dependent systems or vendor concerns. Discuss the risks with the vendors beforehand and, if possible, set up a backup plan for maintaining necessary supplies in times of urgency. If required, identify a set of secondary vendor companies to reach out to in disaster recovery phase.
- Assemble an emergency kit: Prepare a survival kit containing necessary items such as non-perishable food items, bottled water, first aids, flashlights, garbage bags, spare batteries etc. Also keep a copy of important documents and records, software licensing keys, petty cash etc. in there.
- Understand the business insurance coverage and regularly review it: Make sure to understand the various clauses of the business insurance policies that would help one out of the disaster. One such very helpful insurance is Business Interruption insurance. Regularly discuss the nitty-gritty with the insurer’s representatives. Thus, the insurance coverages should be always up-to-date and that the premiums paid would actually be effective in a disaster recovery is ensured.
- Test the DPRP: It is never wise to wait for a disaster to find out what works and what doesn’t. After all the planning and preparedness are taken care of, test the process in mock drills, repeatedly. Everything takes a little getting used-to, before that can work to perfection. The weak links may prove fatal in a real disaster if not identified and amended in good times.
The more quickly a company recovers after a disaster usually translates into more success for the business in the long run. Adequate planning and preparation create trust among the company’s clients by allowing the business to continue without severe damages. So, never ignore or postpone the necessity of a disaster recovery plan and procedure. It is the next best thing to getting insured.