Hurricanes, terrorist attacks, ice storms, tornados, pandemics, fires, floods….while things like this may seem too abstract and too overwhelming to even think about, you need to do just that for your small businesses. You need to develop a plan for unimaginable. I offered my tips on disaster planning a few months back.
StartupJournal summarizes some additional useful advice from a recent meeting of small business owners. Here are some of their thoughts on disaster planning.
Before a disaster strikes:
– Sit down with your management team, or if you are small enough your employees, and test your plan.
Present a disaster and see how well everyone knows your plan (if you have one) and what the holes are (and there will be several). Throw in some twists and turns to see how everyone reacts.
– Back-up your files.
When I was a doctoral student many, many years ago we all developed a system to protect our dissertations from possible disaster. We did not have personal computers in those days, so we had not developed the false sense of security that we now get from those little machines. We had hard copies of stuff. And if they were destroyed we knew we were sunk. What we had to lose was tangible and we held it in our hands. Your data is just as important, but often forget how vulnerable it can be. With our dissertations we kept one complete copy in our office at the university, one complete copy at our home, and one complete copy in our car. We figured that even if a plane crashed into the university it could not also hit our car and our house. In our business I insisted that we keep copies of key materials off site. Be paranoid about your important data and information and assume that the worst case will happen. Keep at least one set of back-ups off site.
Once a disaster hits:
– Do what ever it takes to get operational again.
We saw after 9/11 how paralyzed many folks became. They did nothing for days. You cannot afford to lose that much time in your business, so be resourceful and be determined. When Dick Schulze’s stereo store called the Sound of Music was hit by a tornado, he salvaged the merchandise that he could, rented a tent, and set up a sale. The rest is history, as huge crowds came to take advantage of his low prices. He learned from this experience and out of it transformed his business; this was the creation of Best Buy. Not only can you survive disasters, but they can often make your business stronger over the long run if you manage the situation properly. Do not give up hope and do not wait for others to help. It will be up to you.
– If you have insurance, you can hire your own adjuster to represent you.
The adjuster who represents your insurance company will have their best interests at heart, and not yours. Everything is negotiable and having an expert on your side can help.
The most important tip was not mentioned in this article: cash is king. The more cash reserves you have, the better the chances that you can survive even the worst case scenario. In these times, your goal should be to have 30-90 days of operating cash available. If that means keeping your salary a little lower than you’d like for a while, it is well worth it if it keeps your business going through the next disaster.
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