Preparing for disruption

Where were you when the lights went out? If you were on the Eastern Interconnect power grid on Aug. 14, you were in the dark. How prepared were you?

The best time to respond to a disaster is before it happens. A relatively small investment of time and money now may prevent severe damage and disruption of life and business in the future.

Even if your area never has been damaged, there is no guarantee that a disaster will not happen tomorrow. Just ask the many businesses that found themselves out of power and business back in August.

Here are some tips provided by the U.S. Small Business Administration (SBA).

Develop contingency plans to remain in operation if your office, plant or store is unusable. Could you operate out of your home or a nearby storefront? Could you quickly transport critical items such as computers, inventory and equipment?

Keep extra hard-to-replace parts or supplies on hand. Store them off-site. If this cannot be done, work with suppliers in advance to assure a secure and adequate supply.

Make computer network upgrades now that would prevent possible future structural or network damage.

Purchase or lease a backup generator to maintain full operations or critical functions such as refrigeration, lighting, security systems, telephone systems and computer control in the event of a power failure.

Have back-up vendors and shippers in place in case your primary ones are disabled. Set up relationships in advance and maintain them. Place occasional orders so that they regard you as an active customer when you need them.

Guard against loss of your customer base by diversifying your product lines, sales locations or target customers. Companies whose customers were located entirely in the northeastern United States were hit harder by the blackout than those with customers in unaffected areas.

Make backup copies of all critical records such as accounting, employee data, customer lists, production formulas and inventory. Keep a backup copy of your computer's basic operating system, boot files and critical software securely stored off-site.

Pre-arrange with computer vendors to quickly replace damaged vital hardware. Keep invoices, shipping lists and other documentation of your system configuration off-site, so you can quickly order the correct replacement components. Take care of vendor requirements in advance so that replacements can be shipped immediately.

Surge-protect all computer and phone equipment through power and phone lines. A power surge through a telephone line can destroy a computer through a connected modem. Invest in a surge protector that has a battery backup to assure that systems keep working through blackouts.

Know your connections—gas, electrical and water—shutoffs and phone numbers.

Maintain an up-to-date copy of phone numbers, computer and Internet logon codes and passwords, employee phone numbers and other critical information in an accessible location. Develop an employee "telephone tree" to rapidly contact employees in an emergency.

Review your current business interruption insurance coverage. Is it enough to get your business back in operation? Will it cover the replacement cost of vital facilities? Make it an annual procedure to review and update insurance with your agent or accountant.

Most CPA firms have consulting departments that specialize in helping businesses create and implement business disaster recovery plans. Call yours to learn more or visit www.sba.gov/disaster/getready.html#operations for more information.

The Institute for Business & Home Safety has a new guide from IBHS and the SBA that introduces disaster planning and recovery for the small business owner. e