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MANAGING COSTS

Damage Control: Tips for Surviving a Crisis

When life hands you lemons, you'd better be ready. Here, LegalZoom general counsel Chas Rampenthal explains how to keep calm and carry on.
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Picture this: You show up at the office and there are five federal agents standing outside with a search warrant. What do you do? If the first time you think about how to handle a crisis is during the crisis, then the short answer is “probably the wrong thing.”

A crisis can take on many different forms, including a search warrant, subpoena, bad press, litigation and the hostile customer. The definition is subjective and just as unique as your business itself, so when considering a crisis or “disaster” plan, the first thing to do is sit down and assess your risks. Think about your business -- the products or services that you sell, who your customers are, and what threats are more realistic than others.

Here are some other things to consider: 

• Businesses where food is sold have to think about possible contamination or poisoning. Offer consumer products? Be prepared to deal with customer injury or a product defect.

• Companies in regulated industries, like health care and banking, need to think about enforcement and potential backlash from regulatory bodies and agencies.

• In businesses that collect and store customer information, consider how you protect that information.  What you will do if a breach occurs?

• If you have customers in a storefront, there is a potential for injury, or even worse, an overly angry customer who threatens your employees.

Once the threats have been vetted, the next step is drafting a plan. Here are a few things all business owners should think about. 

Get An Attorney.

Having a trusted attorney on call is imperative. What would you do if law enforcement hands you a search warrant? This is something that can easily be handled, and something a lawyer can help guide you through. Furthermore, having an attorney on call when a problem arises can help keep you calm -- and protect your rights.

Public Relations.

Knowing a seasoned PR professional can be a lifesaver. Far too many people think that they can control the media, when in fact they only make things worse by giving an interview that is off-message or by posting inappropriate comments on social media.

The best thing to do? Take a breath and run your game plan by a media professional. Familiarize yourself with the agencies in your area and build a relationship in case you need them one day. 

The Human Element.

Business owners must also be prepared to take the lead, and take care of their workers. A crisis of any kind can be stressful, so remaining calm and in communication are key.

Of course, timing is also important and you never want to exaggerate a crisis that hasn't actually happened. But when it is clear you need to communicate, lead by example. Have your plan at the ready and stick to it. Try not to lay blame on one person or group and show that you are prepared to take this head on. A calm boss means calm employees, which in turn will help you move forward. 

Unfortunately, most crises are unpredictable and can take on many different forms. But one thing's for sure: They will happen, and when they do, a business owner should always try to be a step ahead.

IMAGE: Shutterstock
Last updated: Jun 28, 2013

CHAS RAMPENTHAL | Columnist | General Counsel, LegalZoom

Chas Rampenthal is general counsel and vice president of product development at LegalZoom. He's also a former talk radio host (KTLK AM 1150 at Clear Channel) and an entrepreneur himself, as the founder of LegalEndeavor.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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