The Gulf oil spill, the floods in Nashville, the series of tornados that cut a swath of destruction through the Midwest not long ago and the recent storms that disrupted power for weeks in the Northeast all underscore one thing: While it”™s essential to have a business plan, it is equally important to plan for special situations that can lead to business disruption and potentially significant financial losses.
It doesn”™t matter if you”™re a sole proprietor or a multinational corporation ”“ as BP is learning the hard way ”“ you”™ve got to be ready when it”™s not “business as usual.”
The importance of having a business plan is not lost on savvy employers, but a company must also take into account potential business disruption, natural disasters and even employee injuries as part of the planning process. These unforeseen “special situations” happen outside of your normal scope of business.
Here are some basic tips for making sure you don”™t end up on the wrong end of a special situation:
Create a manual that documents all essential business activities and the employees who are responsible for them.
Develop backup procedures for all critical documents and electronic files and on a schedule back them all up. Be as redundant as you can afford to be ”“ back up locally, back up via Internet services ”“ and store it in multiple locations.
In the event of a major situation ”“ the injury or death of an employee ”“ you should have information readily at hand for all your employees and their emergency contacts. If you”™re a larger organization, have this information at least for all major decision-makers.
Who are your most important advisers: lawyers, accountants, bookkeepers, insurance agents, financial planners? Again, this should be contained in a list that is readily available to decision-makers.
In the event that owners or senior managers are incapacitated, make sure you have a written plan to temporarily transfer leadership responsibilities to maintain business continuity.
Do you have business disruption insurance and, if so, when was the last time you looked at its limits? Just a few extra dollars a year can mean the difference between financial ruin and a fresh start once the dust settles.
Equally, if you own a business in an area that is prone to flooding and you are on the ground floor, get flood insurance. It”™s not cheap, but which would you rather do, pay an annual premium or replace all your office equipment and inventory?
Don”™t just put a special situations plan together and throw it on the shelf. At least twice a year, you and all key employees should do special situations scenarios. For example:
What if an employee is hurt or injured? Who do you call first? Where is the nearest hospital? Who are his or her emergency contacts?
If you have a major storm or environmental event, how do you get word out to your people if they should not be traveling to work?
What if an employee in a key position is arrested? What if the arrest took place around a responsibility related to your business? Who should you contact? How should you participate in the investigation?
Think through the worst that can happen that can affect your business and plan for how to address it.
If you are not prepared, it only takes one fire, one flood, one major storm to shut you down or permanently damage your reputation. In BP”™s case, they”™ve suffered significant financial and reputational harm. And what about all those other businesses that will face disruption as a result of the oil spill? Just how prepared were they? And just how prepared are you when business as usual is not the usual?
Josh Slavitt is a certified business coach with Westport-based ActionCOACH of Connecticut, a worldwide business coaching network. Reach him at joshslavitt@actioncoachnow.net.
