Catastrophe is lurking around the corner. If you haven’t prepared a plan to deal with life’s mishaps, you’re doing more than just flirting with disaster–you’re looking to build a lasting relationship. In the past few years the United States has suffered an incredible string of misfortunes. Hurricanes Fran, Andrew, Hugo, Bertha, Iniki, and Opal. The Northridge and Loma Prieta earthquakes. Flooding in the Midwest in 1993 and this past winter in the Pacific Northwest. Riots in Los Angeles. Paralyzing blizzards in the Northeast. This has made national data recovery services very critical. It’s made the SBA even MORE critical.
“We’ve had our hands full,” says Bernard Kulik, associate administrator for disaster assistance with the SBA, which handles disaster-relief loans and other aid after a tragedy occurs. “The past five years have been without precedent.”
Home-based and small businesses are particularly vulnerable to disaster, whether it’s a building fire or a region-wide catastrophe. Although a large corporation may have trained teams that are prepared to get the company running again, the sole proprietor is on his own. Insurance may not be adequate. Spare equipment such as computers and fax machines will likely not be easily available in the event of damage to an office. Suppliers may not be willing to extend credit for needed goods or services. Simply earning money could be impossible for days or weeks. And in the case of a home office, there is the double trauma of losing both a home and a workplace. All too often, poor disaster preparation may mean that a hard-earned business collapses.
It doesn’t have to be that way. Planning for a disaster should be an essential part of any small business and should include preparation, employee training, and a thorough review of insurance coverage. It also should include an understanding of the psychological and physical impact of a flood, fire, hurricane, or earthquake as well as a plan for picking up the pieces afterward. Of course, taking this step forces you to contemplate what may be nearly unthinkable. But that’s the point. “The biggest mistake people make is in not thinking about a disaster before it happens,” says Kulik. “Most people are completely unprepared–particularly small-business owners. It’s something you’d just rather not consider.”
To help you plan for the inconceivable, here are the lessons that entrepreneurs learned from dealing with their catastrophes.
Secure Your Office
On the night of January 17, 1994, Helene Liatsos’s world turned upside down.
Liatsos, a consultant who helps home-office owners become more productive, lives in Tarzana, California. Her home was just miles from the epicenter of the Northridge earthquake, a shock that registered 6.6 on the Richter scale and killed 57, injured thousands, and caused nearly $20 billion in damage to homes, buildings, and freeways.
Liatsos was asleep when the earthquake struck, roiling the ground in great seismic waves. Stunned, she struggled out of bed, first thinking to call her parents to tell them she was OK. But she couldn’t find the phone that usually sits next to her bed. In the dark she stumbled to her office to use a phone there, then tripped over a large globe that had fallen from its mounting bracket and rolled across the floor. “I found my way to my desk, and there was nothing left,” Liatsos recalls. “The desk was completely bare–telephone, fax machine, phone books were all gone.” When the sun came up, she found her computer at the bottom of a pile of rubble formed by its hutch and a nearby bookcase. Finally, she found the phone. “It wasn’t working.”
Liatsos has now strapped her office furniture securely to the wall. “Whoever invented those earthquake straps made a fortune,” she says, a little ruefully. “Everyone I know was buying them.” She also keeps a flashlight and cellular telephone by her bed. She stores an earthquake kit with water, clothing, and emergency food in her home and car.
Flora Green has also mended her ways and shored up her business. Her Miami, Florida, interior and exterior plant business, Foliage by Flora, which Greene runs with partner Jo Gillman, was devastated by Hurricane Andrew in August 1992. The storm tore roofs off the two warehouses containing their inventory and business offices, and wings from small planes parked at an adjacent airport littered the parking lot. One wing crashed through a window, letting even more water flood in during the torrential rains that accompanied Andrew. For six weeks, the business ran from a plastic-sheeting-enclosed porch Green had built adjacent to her relatively undamaged house. “It was a true, total disaster,” she recalls.
Since then, Green and Gillman have rebuilt with an eye toward riding out the next storm. They moved Foliage by Flora to a nearby building that survived Andrew in good shape, then took additional precautions. They reinforced inside offices with extra beam supports and plastic sheeting to seal out rain. Hurricane windows and storm shutters now protect wall openings.
Any business facility–whether a home or a small office–must be made as physically secure as possible. In earthquake zones that means securing bookshelves and desks to the wall with earthquake straps. You can protect such delicate equipment as computers, monitors, and printers from severe shaking by placing cushioning underneath them. In severe-weather zones forecasts usually give several hours or even days of warning, but you should have needed storm-proofing equipment such as shutters, plywood, and plastic sheeting ready to go.
Since it may be a bit awkward to keep filled sandbags around your office in the event of flooding, you should make a contingency plan whereby you can lug equipment out of a basement or first-floor office to upper stories. You might even consider moving equipment off-premises to higher ground–or moving your office out of a flood plain altogether.
Plan for Next Time
“Right after a major disaster, companies and public agencies become concerned and there’s a burst of activity. But then they settle right back into complacency” says Judy Bell, a business consultant in California who specializes in disaster planning. That’s a mistake. Where there is one disaster–particularly a natural one such as an earthquake, flood, or hurricane–there is apt to be another.
Paul Shuping’s planning paid off. The computer programmer runs Winsome Rabbitry from deep in the woods of Bunn, North Carolina. He produces customized software to handle the administrative side of the rabbit shows run by groups ranging from 4-H clubs to the American Rabbit Breeder Association (ARBA).
When Shuping and his wife built the home that houses his business, they wired it so it could run off a gasoline-powered generator. When Hurricane Fran rolled through the area this summer, Shuping kept his business running off the generator when the local power lines went dead for 10 days. Shuping’s actions illustrate what Bell says is the first step in planning for a catastrophe: The business owner must decide to prepare. “It takes absolute commitment from the top person, because it’s going to take some financial outlay” she says.
Green and Gillman are another example. The pair has incorporated their employees as part of their disaster plan. Each has a “disaster sheet” with phone numbers of key company people, the chain of command for Foliage by Flora, and a list of must-do tasks when a storm warning comes in, such as taking plants inside and covering office equipment with plastic sheeting.
In developing your plan of action, also check on the locations of regional telecommuting centers. You may be able to relocate your business to such a center if your office is devastated. And if there isn’t one near you? “My fall-back plan,” says Shuping, “was to go to my mom and dad’s house and set up business there.”
Notify Your Clients
How will your clients know if you’re still in business? After the Northridge quake, Liatsos remembers many small businesses pasting cardboard signs in windows that said, “We’re open!” But that solution won’t work if you don’t own a storefront.
“We were fight in the middle of supplying software to ARBA’s 1996 national convention in Peoria, Illinois [when Hurricane Fran hit],” says Shuping. “We called our client immediately.”
Talk to a local newspaper or radio station about its emergency plan and whether you will be able to advertise in the days after a disaster. Try to have ready small, simple newspaper ads custom-designed to fit a paper’s specifications, or prerecord ads a radio station can play. As soon as you have access to e-mail, blast out a note to all your contacts letting them know that you’re still working.
If you plan on relocating to a regional telecommuting center, make sure you can get call-forwarding from your local phone company. Calls to your regular office number will roll over to your new line at the temporary office, making it seem to customers that you are open for business as usual.
Secure Your Data
Probably the most important precaution for a small or home-based business–many of which are knowledge-oriented and have no inventory outside the owner’s brains and his or her client list–is to protect its electronic data. Travan tape drives, Iomega’s Zip drives, and even such online backup services as SureFind make backing up easier than ever, but it still needs to become a regular habit.
Bell notes what most small-business owners probably understand–that 20 percent of a business’s customers account for 80 percent of its business. So she counsels keeping key client lists on hard drives and backups–and even on paper. Make several copies, scattered at several locations, and put one in your car. Pay particular attention to your accounts receivable records to ensure cash flow in the days and weeks after a disaster. (“To hell with accounts payable,” says the SBA’s Kulik, only partly in jest.)
Green and Gillman now make backups regularly and send copies to both of their homes, which are far enough apart to make serious damage to both unlikely even in an Andrew-like storm.
Also, confirm that your backups are good, says Florida writer and consultant Peter Silver, who tells of numerous acquaintances who found their backups weren’t reliable when they tried to retrieve data after Andrew and other severe storms. And you might want to ship copies to secure storage sites outside your region via the Internet, as Silver does.
At the very least, purchase a fireproof safe from an office supply store and keep backups and important business records there. Look for a UL rating of one hour at 1,700 degrees Fahrenheit (a level only surpassed by really fierce, long-burning fires such as the 1992 conflagration in the Oakland, California, hills)–it’ll run about $200. Even after an earthquake or after a hurricane, you’ll at least have something to fish out of the rubble.
Sometimes, of course, you are not going to be able to recover your data from a clicking hard drive or failed RAID server – in that case, a firm like Irvine’s Hard Disk Recovery Services will rescue you. They specialize in recovering waterlogged and seemingly destroyed hard disks. So having them in your smart phone is a great idea.
Assess Your Phone Needs
If you live in a remote location, phone service may be disrupted for long periods of time. After Fran roared through North Carolina, Shuping had phone service for about eight hours. Then, nothing. “The batteries at the rural substations died after eight hours,” he recounts. “We lost the phones for about 14 hours until the phone company installed generators at the substations.” Shuping was able to keep in touch, however, with his cellular phone.
In the event of disasters in heavily urban areas (the Northridge earthquake and Hurricane Andrew are two examples), a cell phone may not be necessary. After the Northridge temblor, for instance, Bell (a former telephone company executive) knew that overwhelmed switchboards might not send a dial tone for more than a minute, but in time they would. “People gave up and hung up,” she says. “But the phones worked.”