A L Bean & Company

September 7, 2011

Hurricane Season – Lessons for Businesses

Filed under: Consulting,General,News — artlbean @ 8:12 am

Businesses are constantly faced with the challenges of simply meeting monthly business goals and ensuring there is sufficient cash on hand. Planning for your success can be fun but also comes with challenges. How do you make credible financial forecasts and reasonable new customer projections? That being said, what about planning for the possibility that some low probability event will occur that totally disrupts the business? I would bet that many businesses that were impacted by Hurricane Irene had planned for a lot of things, but didn’t plan for the likely event that they could not operate for days or even weeks. Disasters like Hurricanes and other events often kill businesses.

Business Continuity Planning
We have seen businesses that have lost critical data, equipment, inventory and facilities due to disasters such as tornadoes, fires, power losses and others. In most cases, planning for businesses should also involve disaster recovery planning or business continuity planning. Though these terms are sometimes used interchangeably; the term Disaster recovery planning involves recovering your business or IT systems quickly after a disaster occurs. Business continuity planning involves identifying your organization’s exposure to internal and external threats and planning how you will operate if one or more of these threats become reality.

Insurance can help make businesses whole after a disaster, but it may not solve the real issue. The real issue is that customers did not receive their products or services. If an insurance company writes you a check for the loss, what about the fact that customers may have found an alternative, and may no longer see your business as the best solution? Yes, insurance should be bought, but plans should be put in place to ensure the business is still viable after a disaster.

This is where a business continuity plan (BCP) comes into play. A business continuity plan addresses how the business will operate if critical resources have been lost; such as IT systems, facilities, power and others. Businesses should be able to address these issues to ensure survival regardless of the situation.

A recent story regarding how Waffle House prepares for these events discusses this issue. Restaurants are often open quickly after a disaster. Waffle House has plans and resources to address these issues, which allows the stores to often be the only restaurant open after a Hurricane or other storm occurs. The company decided to beef up its crisis-management processes after Hurricane Katrina. Senior executives developed a manual for opening after a disaster, brought in portable generators, bought a mobile command center and gave employees key fobs with emergency contacts. A BCP addresses these items and more. Subsequent articles addressing BCP will be posted shortly. If you have questions regarding BCP for your business, please contact A. L. BEAN & Company.

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