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W e can all remember exactly where we were on September 11, 2001. On that day, 172 corporate Vice Presidents perished when the World Trade Center came down.1 This tragic event drove home to many CEOs and business owners that we can be here today and gone in a heart-beat.

When a disaster hits, businesses shut factories, major events are canceled, and companies scramble to put a disaster recovery plan in place.

As business owners, we are stronger than a disaster, but all these circumstances and unforeseen future consequences beg the question: is the company that you run or own prepared for a sudden... catastrophe?

Many disasters are completely unexpected. So, it is critical to the future health of your business to be ready if the unexpected happens. If your office was not accessible due to a natural disaster, would you and your staff know what to do to keep the business going? If your computer system crashed today, do you know how to recover the data to get your business up and running again, how long it would take, and the cost to your business? If you lost a key employee unexpectedly, do you have a successor trained to take the reins in their loss or absence?

Ideally, a business should have a broad contingency plan that considers all aspects of the business bro-ken down into key areas such as: Revenue, Operations, Financial, and Organizational. Your business contingency plan should be documented and periodically updated. At a minimum, the contingency plan should include the following:

• Establish a strategy that enables employees to continue to function without endangering them. • Ensure employees can effectively work from home. • Verify that you have the tools, technology, capacity, and security measures in place to support a

large remote workforce. • Determine your priorities and the minimum staffing requirements to support these priorities, in case

you need to function with a significantly reduced workforce. • Create a communications plan that includes providing employees, customers and other stakeholders

with regular situation updates as well as actions taken. • Map your dependencies to understand where disruptions might impact your value chains. • Review the preparedness of your critical third parties (suppliers, vendors, service providers, etc.). • Identify single points of failure in your business ecosystem: Revenue, Operations, Financial and

Organizational.

Business Contingency Planning—How to Protect Your Business If/When Disaster Strikes

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To ensure your business can weather any storm that hits, implement these steps when creating your business contingency plans.

Create an Emergency Response PlanWhen disaster strikes, what’s the first move? What steps should you and/or your employees take in the event of an emergency to stay safe? Next, decide what your employees should do to prevent the loss of assets, inventory, and other property.

Appoint a Business Contingency OfficerOnce you decide your response plan and protocols, assign responsibilities and hold regular training sessions so employees understand their duties. The company should designate a person to be responsi-ble for developing the plan and to ensure the imple-mentation of it is effective.

Delegate AccountabilityThe business contingency plan should include the names of key individuals and the specific tasks they are responsible for once the plan is put in motion during a disaster. The plan should also indicate where each person should go and what action they should take when they get there. Arrange back-up office space with appropriate levels of technology to be available so that key aspects of the business can continue to operate.

Review Insurance PoliciesA thorough and biannual review of insurance policy coverage should be undertaken, identifying key loca-tions, extent of insurance coverage, and deductibles, if any. Most companies have workers compensation, general liability and excess umbrella coverage. But do you also have an appropriate amount of business interruption insurance, and does it provide the coverage needed in a natural disaster?

Duplicate and Backup Financial Records/Business Data You should have up-to-date duplicates of all your important records, contracts, and documents, and keep them off-site in a safe deposit box or secured in the cloud. Additionally, a backup and disaster recovery solution (BDR) can keep data safe from natural disasters as well as cyberattacks or hardware failure—by providing secure, continuous backup and rapid data restoration onsite and via the cloud. All important data should be backed up off site and updated frequently.2 There should be an efficient way to bring up a system which is equivalent to the one that failed. It needs to run the same software and have the most recent backup data.

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Evaluate Your Sales Plan If your salespeople have been impeded by travel restrictions, you may need to redirect their activities so they are work-ing productively. In some companies where business is conducted face-to-face, a sales slump could follow.

Map out SuppliersCompanies moving tangible goods may map out their suppliers, looking for vulnerabilities in supply routes, transpor-tation or even banking. Consider collab-orating with customers and vendors in working groups to prepare for crises.

Document Business Losses If your business experiences losses, you will need a plan to document the losses to business assets, including vehicles, equipment, furniture, and fixtures. You can also file for assistance with FEMA (the federal emergency disaster assistance agency), or file a disaster assistance claim with the Small Business Administration.3

Test to Ensure Effectiveness Regular testing of business continuity plans is essential. Review the plan every year to ensure new as-pects of the business are covered. Test the plan often. Pick a Saturday and pretend that you have to bring back the office operations in less than 24 hours.

Effective contingency plans are designed to ensure that the risk of loss in the event of a disaster is re-duced—safeguarding your business so you can continue operations at some level.

B2B CFO® has the experience to work with you to help build and maintain a business contingency plan to keep you, your employees and your business safe. Please contact us to discuss your

particular circumstances and help ensure that your business survives the unexpected.

1 Robert Guenther: Is It Time to Replace Your Replacement Strategy?, Harvard Management Update2 Digital.com: Disaster Proof Your Business3 The Balance: Recovering Business Records After a Disaster