Natural Disasters Can Have a Major Impact on Business

A recent surge of hurricanes, wildfires, earthquakes, and floods have crippled major cities and devastated entire regions all over the world. In the aftermath of these events, business owners are faced with a few glaring truths - one of which is the undeniable vulnerability of their business’ future in the event of a disaster. Most of the major news outlets are reporting this figure: according to the Federal Emergency Management Agency (FEMA), 40% of small businesses never recover from a disaster. Despite all the literature and precautionary tales surrounding these catastrophic events, there are still an overwhelming amount of businesses that choose not to prepare for a disaster until it's too late.

A recent surge of hurricanes, wildfires, earthquakes, and floods have crippled major cities and devastated entire regions all over the world. In the aftermath of these events, business owners are faced with a few glaring truths - one of which is the undeniable vulnerability of their business’ future in the event of a disaster. Most of the major news outlets are reporting this figure: according to the Federal Emergency Management Agency (FEMA), 40% of small businesses never recover from a disaster. Despite all the literature and precautionary tales surrounding these catastrophic events, there are still an overwhelming amount of businesses that choose not to prepare for a disaster until it's too late.

There are two things that business owners need to be cognizant of in order to truly understand the importance of business continuity planning.

• There are no locations that are 100% exempt from natural disasters.
• The effects of natural disasters on commerce expand much further than the businesses physically affected by the event.

What many businesses don’t realize until it is too late is the importance of business continuity planning. In a recent article published in The Hartford, five businesses told their harrowing stories of their struggle to resume operations after a natural disaster. As they describe their post-event process, each business faced a different disaster and different recovery issue. For one company, the challenge was having to repurchase machinery and inventory before resuming businesses operations. For another, it was realizing that the majority of businesses they worked with were no longer operational and required a strategy for post-disaster sales.

The lesson learned from these stories is this: forward thinking and planning ahead can be the difference between a business' survival and failure to maintain operations.

Below we examine seven critical aspects of business continuity planning, as well as, a bit about what they are and why they’re important:

Important Documents and Records: One of the first things that you’re going to want to make sure of, is that you have all of those paper documents you’re likely going to need to reference in the event of a disaster. If possible, keep multiples of these documents - one on site at your offices and the other offsite in case your office is unreachable. When possible, consider following the 3-2-1 rule, as detailed under Data Backup and Technology Planning.

A few examples of critical business documents include:

• Deeds
• Leases
• Insurance Papers
• Certificates/Licenses
• Banking Records
• Hard Copy of Business Continuity Plan

Contact and Communications: For most businesses, the first thing to account for in the event of a disaster, is their people. In fact, even social media platforms have added a feature that allows people near a disaster to let loved ones know they’re safe. There is nothing scarier than losing touch and not being able to find someone in the aftermath of an event. Establishing and maintaining contact lists at all times is a good place to start. Next step, is establishing alternative communication lines. If you can't be contacted by phone, then make a way to use texts or email to reach out. You may want to have a webpage that employees can access quickly and easily for updates in the event they are unable to check their voicemail or work email. Additionally, you should make sure that everyone who is a key member of a disaster recovery team be very aware of it beforehand and take even further measures to enable communication.

Alternative Locations and/or Mobility: When it comes to alternative sites, virtualization and mobility has made this significantly easier of many businesses. This basically includes establishing secondary and alternate locations that you’ll be able to resume operations at if your primary location is destroyed or unavailable. As many businesses are using virtualization, the option to work remotely has become a more plausible solution. Make sure your employees know what to expect. Make clear important issues such as: if and when they’re expected to resume their duties, alternative site locations, and when those sites are likely to be activated.

Vendor and Critical Client List: Like your employees, another major concern after a disaster will be speaking with the vendors and clients that you need to make aware of your situation. Even if you are able to resume operations immediately, you need to make sure that your vendors and clients are operational and/or know you’re still able to fulfill your end of the transaction. Making sure your important relationships survive the event is a priority and maintaining communication is a great way to do that.

Data Backup and Technology Planning: One of the most important aspects of business continuity planning is data backup and disaster recovery. In fact, not only should your company data be backed up regularly and stored in multiple locations - so should your business continuity plan. The 3-2-1 backup rule is a great way to backup data. It requires that you have 3 copies of your data stored on 2 different media or devices with 1 of those copies located off-site. In terms of your data, however, you’ll want to make sure that your records are completely backed up, regularly - and also that your backup is regularly tested to make sure that it’s working properly.

Emergency Planning: This section consists of what to do when the emergency happens while you’re in your office. Emergency provisions like flashlights, batteries, water, etc. should be stocked and checked regularly. Emergency escape exits should be identified. Meeting points should be set. Another phase would be inventory of things like desks, chairs, supplies, etc. In the event you need to make an insurance claim, you’ll need to know what it is that was lost.

Review, Update and Testing: The final component is the one that is probably the most important but often overlooked. Test your backups. Make sure you have phone numbers updated. Make sure that key individuals know their role in a disaster. Identify an alternate site and be prepared to shift there when needed. The only thing worse than a disaster is realizing too late that your plan to cope with the disaster was insufficient.

Directive is here to guide you through the disaster recovery process. Our services go above and beyond data backup, with a strong focus on disaster recovery. Are you interested in partnering with us to protect your data? Contact us at: 607.433.2200.