What a Disaster That Was!
The Importance of a Business Continuity Plan

– Don Capman, President,
J.D. Associates

This past month has been such a sad time for Southern California. The recent fires give new meaning to the word “disaster”. Thousands of people have lost their homes and many had no contingency plans even though they were aware that the worst was lurking at their doorstep. One of the natural defense mechanisms of human beings is denial. Denial serves a useful purpose in that it protects us from thinking about all of the nasty circumstances that may befall us in this unpredictable and sometimes perilous world. After all, we could drive ourselves crazy if we worried about all of the possible things that could happen to us. But total denial can leave us in a real mess if and when a disaster happens.

One of the California fire tragedies, which received very little press, was the number of businesses that were lost. Some of these businesses were run out of peoples’ homes and many people who escaped the flames left their entire business, including computer backups, to burn to the ground, lost forever. Some of these businesses were retail stores that also gave up their records and backups to the flames. NO RECORDS, NO INSURANCE COVERAGE. OUCH!

So, how can you minimize the effects of a disaster and ensure that the future of your business doesn’t go down in flames? If you haven’t already done so, you might start thinking about a business continuity plan. A business continuity plan is designed to help you run your business with the least bit of interruption in the event of a disaster. What constitutes a disaster? It could be a fire like what happened in Southern California, or it could be a flood or other weather-related catastrophe. It could be an act of terrorism. We are getting to realize that none of us are immune to terrorist acts. Instead of an all-out disaster, we could experience a crisis that would result in a temporary disruption of our business. For instance, what would you do if your best vendor’s manufacturing plant burned to the ground and that vendor made up 30% of your best-selling merchandise? Another example of a crisis is the recent writers’ strike that put the late night entertainment business into ‘rerun’ mode. Sometimes you can see a disaster or crisis coming, other times you can’t.

While most business owners would agree that backing up your valuable data and storing the backups off site or using an off-site backup service is critical to your business, lost data is not the only thing that could go wrong. There could be a serious disruption in our transportation system caused by strikes or terror that could stop the flow of inventory to your store(s). Have you ever tried running a store without inventory? Or a large part of your sales staff could become sick with a bad virus right before the holidays. Even though disasters and crises are not frequent, they do happen and a little planning could go a long way.

So, how do you go about creating a business continuity plan that will help you continue business in a time of disaster or crisis? The larger your business, the more vulnerabilities you probably have and subsequently the more detailed your business continuity plan will be. The smaller and less complicated your business, the less detail you need. Here are some logical steps to begin approaching this task:

ANAYLYZE YOUR BUSINESS VULNERABILITIES: Where would you hurt the most if a disaster or crisis happened? In assessing this, you might begin by asking yourself where the greatest financial impact would be. You might consider hiring an outside consultant to help you with this project. There are many consultants trained in disaster recovery and business continuity who can offer valuable insights and help structure the project.

CAN YOU PREDICT POSSIBLE DISASTERS OR CRISES? Like the California fires or the writers’ strike, both were somewhat predictable. If you think you might be the target of a disaster or crisis, is there anything you can do to mitigate the consequences?

ASSIGN RESPONSIBILITES TO KEY STAFF WHEN A DISASTER STRIKES: All of your key staff should clearly understand your plan and know what role they will play should a disaster strike. They should see the plan in writing and periodically review the plan to remain familiar. If there are personnel changes, plans should be reviewed to make sure there is no confusion.

HOW DO YOU RECOVER FROM A DISASTER OR CRISIS? Outline what you will need to recover from a disaster. Will you need to relocate? Is your supply chain intact? Is your backup current? Do you need to work with a temporary help agency? Is your insurance up-to-date?

These steps are very rudimentary and are designed to get you to begin thinking of a business continuity plan and disaster recovery. There are many resources on the web that will help you with the details. Google “Disaster Recovery” and “Business Continuity for Retail”. You don’t have to lose everything in a disaster. With some careful planning, you can be assured that your business has a future.

My best wishes for a very happy and profitable holiday season!