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Inconvenience or catastrophe? Plan makes difference

We’re all holding our breath as Mississippi moves through hurricane season 2006. In spite of attestations of readiness by federal and state emergency officials we know that we just couldn’t withstand another severe storm yet. Surely Providence will be merciful and let us recover from Katrina before another serious hurricane comes this way.

Aside from hurricanes, there are many other types of emergencies that can devastate us and, in many cases, our degree of readiness dictates whether our business will survive. Are we ready? Truthfully, the answer is probably not. Our busy schedules don’t leave much time to sit and contemplate what contingencies we ought to be preparing for.

But, maybe we should be thinking about just that. One of the basic postulates of management is planning. We won’t get a very good score as managers if we let a preventable, or at least mitigable, catastrophe destroy our business.

One useful approach to disaster planning is to imagine that a fire or tornado plowed through your building and destroyed everything in its path. What would you do first? And, then what would you do second?

Here are a few basic questions that might be helpful in beginning a disaster plan:

• Are your vital records backed-up and stored offsite?

• Do you have adequate insurance to replace all of you property?

• Do you have an offsite property inventory to substantiate the loss?

• Do you have important contact information for employees, insurance agent and law enforcement at your fingertips?

• Do you have a weather radio to keep up to date on National Weather Service reports?

• Do you have a list of your equipment and software vendors offsite?

These are the plain vanilla questions that usually come up when the conversation turns to disaster planning. They’re important and prudence requires planning for these contingencies.

There are other, less obvious hazards that business managers should consider even though the likelihood of occurrence is remote:

Domestic violence

Does the receptionist know what to do should an enraged spouse, or employee for that matter, show up brandishing a weapon and threatening to kill everybody in sight? I don’t know if an effective plan can be devised for this contingency, but it’s well worth discussing at a staff meeting. At minimum, the telephone numbers of local law enforcement should be readily accessible.

Death or disability of a key employee

Most businesses have some semblance of a plan to deal with the death or disability of an owner. What about a non-owner key employee? Could the business continue to function if one of the key folks was unexpectedly out of the picture? Cross training could mitigate this situation if conducted well in advance. Perhaps this would be another good management retreat topic.

Quick relocation?

Where would the business physically relocate should the office be totally destroyed? Property insurance is fine, but every day that business is not conducted is a day of lost profits and customers. Business interruption insurance helps, but in the meantime, customers are going somewhere else and regaining them, if indeed they can be regained, will prove extremely difficult. Perhaps a little planning could identify facilities where the business could be relocated temporarily while insurance and repairs are threading their way through the system.

A little practice

Though it might seem elementary, practicing for evacuation could prove life saving. Most everybody is in compliance with the rules for exits and exit signage.

However, actually going through the motions of a fire drill could implant what to do in an employee’s mind and thereby save a life during extremely stressful situations. Establishing a place to gather outside the building would make accounting for everyone easier and lessen the risk that someone was left inside.

Where are your fire extinguishers located and when were they last checked? Can every employee go immediately to the fire extinguishers and operate them easily?
Elementary, for sure, but it could mean the difference between inconvenience and catastrophe.

Thought for the Moment

Committees have become so important nowadays that subcommittees have to be appointed to do the work. — educator Laurence J. Peter (1919-1990)

Joe D. Jones, CPA (retired), is publisher of the Mississippi Business Journal. Contact him at cpajones@msbusiness.com.

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