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Disaster Recovery Plans. Worth the Time and Money? Yes!

In the wake of the destructive hurricanes that have hit the United States recently, I thought an appropriate topic this month would be disaster recovery.  It’s not normally in the nature of an entrepreneur to be a pessimist, but to protect your business you must at some point imagine what a worst-case scenario looks like. Think of it as the perfect storm for everything that could go wrong. What happens if a key employee leaves? What happens if there is a fire? What happens if you get sick and can’t work for an extended period of time? And what happens if everything just mentioned occurs at once? Once you have your head around that, it’s a good idea to assess your most serious vulnerabilities. Then put measures in place to protect your assets if there is an emergency. Adequate insurance protection is a must. Find an expert to help you determine what kind of coverage you need. In the event of a catastrophe at your office, you should have a plan in place to insure that you are able to resume business operations as soon as possible. In many cases it only involves coming up with a pre-thought plan for everyone to follow.  When hurricanes, tornados or floods exact damage on businesses, you hear stories about how many companies must close their doors forever due to lack of insurance. According to the Federal Emergency Management Agency (FEMA), forty percent of businesses do not reopen after large disasters hit. Those numbers are staggering.  Having detailed plans in place in preparation of any business altering event, which includes a list of secondary suppliers and alternate work locations, can be the difference in being up and running within days versus weeks.

In 1991, I moved to Charleston, South Carolina to work for the ABC affiliate television station. This was two years after the area was virtually destroyed by Hurricane Hugo. However, I was struck by how anyone who lived through it still talked about it like it was yesterday. In fact, many had that “thousand-yard stare” when referring to that terrible day in September 1989. Many of our television promotional spots included the fact that we were the only local station to stay on the air throughout the entire storm. That was great, but since there was no electricity for hundreds of miles, very few people cared at the time. However, what it did show was our resilience as a business; that we would be there no matter what happened. In fact, this helped catapult us from last place in the ratings to almost even with the perennial number one station in the market. Since then, there have been a few storms that have eclipsed Hugo in devastation, but because at the time this storm was the costliest in history, it forced companies to start looking seriously at disaster recovery. We spent years writing and updating our plan. Every procedure was documented including where I would go with the cash box, so we would have money available to us in the days following the storm. Now, some would say we were being overly cautious, but when you are talking about a business for which you have risked everything, I would take caution over chaos any day.

B2B CFO®

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