Prepare to Be Interrupted: Part 2

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“Well, it’s really happened,” you say to your employees. “What we hoped would never happen — but always knew could happen — has happened.” 

Any one of the following could qualify as the subject of your lament:

• You were hit with an area-wide, multi-day electrical outage.
• A fire or storm damaged or destroyed your business.
• A major hard drive with significant files crashed and is unrecoverable.
• The world’s most destructive computer virus infected your computer.
• [Insert your nightmare here.]

Whether it’s an act of God or human error, you’re out of business until your team executes Plan B. You know, the three-point recovery plan we discussed in Part 1? You developed and structured Plan B, didn’t you?

Good. Now let’s implement that plan based on three areas of importance:

1.     Operational recovery. This is what you have to do to get back in the business of serving customers.

a.     Get your team together, physically or virtually, and discuss the extent of the damage. Develop a triage system of priorities, beginning with those that minimize the impact on customers and/or save assets.

b.     Let your people focus on the operational details of getting the business back online, while you work on the details of the recovery elements, including facility, insurance, cash flow, banking and, of course, key customer relationships. There’s no time for alpha dog behavior. You need full access to your employees’ ideas on how to solve the problem.

c.     Your leadership team should be almost as productive from their homes with the laptops you purchased and their residential high-speed internet connection. (Side note: When you purchase laptops, be sure they have 3G as well as wireless modems. Often, cell connections will work even when the electrical grid is out.)
 

d.     Now is the time when any capability you either duplicated or migrated to web-based, cloud-computing applications will pay off.

2.     Financial recovery. This is what you have to do to make sure the cash continues to flow.

a.     In extreme circumstances, like a storm, fire or extended outage, spend the first day estimating the associated expenses and what impact this emergency will have on your cash picture as you see the timeline playing out.

b.     Develop a spreadsheet analysis showing those cash flow numbers for your internal management purposes and for step “d” below.

c.     Contact your insurance agent about the “business interruption” rider on your property, as well as your casualty insurance policy, to see if what you’ve experienced qualifies for coverage. Any anticipated settlement check should be represented on your cash flow projection mentioned in step “b” above. 

d.     Contact your bank and let them know you will, or may, need help. They should already have an updated set of financials. Show them your emergency cash picture spreadsheet, including how you will pay them back when things get back to normal.

e.     Contact customers with outstanding balances, explain what’s going on and tell them you would appreciate their help by making sure they pay on time. There are times when you can overlook late payments — this is probably not one of them.

3.     Data recovery and continuation. This is something the members of your team should be handling.

a.     Who have you assigned to be in charge of securing your data, be it physically or with one of the online data backup resources? That person should immediately identify where any loss is and begin the process of restoring that data to team members.

b.     Until your data collection, storage and retrieval systems are back online, establish and distribute organizational practices that not only provide access to historical records, but also secure any new digital assets you are creating now.

One last thought: If your disaster is community-wide, not just within the four walls of your small business, that means customers are also affected. Lead your internal team in finding ways to help. Your customers have always wanted the products and services you deliver; now they’re looking for leadership — deliver that, too.

Jim Blasingame is one of the world’s leading experts on small business and entrepreneurship. He is the creator and host of the weekday radio program “The Small Business Advocate^® Show.” Jim is also a speaker, a syndicated newspaper columnist, and the author of “Small Business Is Like a Bunch of Bananas” and “Three Minutes to Success.” 

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