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STRATEGY

Could Your Business Withstand a Superstorm?

Probably not. As the new year approaches, it's time to re-think your disaster plans.
Hurricane Sandy flooded a store in the Dumbo section of Brooklyn.
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As the Northeast faces severe storm and tornado warnings today, it's a good time to reevaluate your disaster plans. After last year's Superstorm Sandy, Inc.com columnist Drew Greenblatt gave a practical guide to making sure you're ready.

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After Superstorm Sandy ravaged the Northeast, forcing thousands from their homes and businesses, I recalled what a fellow business owner and friend endured in Nashville in 2010. A freak weekend storm dumped more than a foot of rain, swelled the Cumberland River to 500-year highs--500 years!--and inflicted paralyzing damage across the city, even flooding the Grand Ole Opry.
 
That storm changed the way this business owner thought about risk forever.
 
“We clearly think about it differently,” says my friend, Steven Rollins, recalling the six feet of water that surged into his 78-year-old, third-generation wire products company. “Until a tragedy or a life-changing event affects you in a personal way, [disaster planning] doesn't seem to be a situation that merits your time and attention. I'm here to tell you, planning for risks that your business faces really does matter.”
 
The start of a new year is a perfect time to take stock of your policies and procedures and to make key changes. That’s especially true in light of the ravaging extreme weather that’s pummeled much of the country in recent years--a trend that’s not likely to abate.
 
Here are five key steps to take to prepare your business for a disaster:
 
1. Evaluate your insurance. Have appropriate levels of insurance for casualty events and business interruption, even though it costs extra. That coverage “changes the whole conversation,” Steven says. “[It goes] from ‘Will we survive this?’ to ‘How quickly can we act to get back to business as usual?’”
 
2. Pay up. Pay extra for replacement value, not fair value, for your equipment. Your equipment depreciates over time. Make sure the insurance company will buy you the newest version so you don’t get 20 cents on the dollar for something that is only a few years old. Invite your insurance agent to visit the factory, with his engineers, to inspect for problem areas. After all, you and the insurance company share an interest in minimizing losses.
 
3. Check your surroundings. Have the facility manager place all servers and other computer equipment off the ground, as high as possible. Are wires exposed to possible flooding? Do you have enough fire extinguishers--and are they operable and in the right places? Is your data backed up remotely in the cloud? Confirm the data is retrievable in less than one hour. 
 
4. Make a list. Compile an emergency contact list for all your managers and employees, as obvious as that may seem. “It took us days to reach some people who had no idea they could be helping us, and a lot of critical emergency response time was lost because some people were not reached as quickly as we needed,” Steven recalls.
 
5. Divide and conquer. Divide staff members for two key tasks: business continuity and disaster recovery. Provide clear areas of responsibility, in writing. Stay in touch with customers and vendors, protect and salvage the physical plant, talk to the bank, etc. “We were able to turn these groups loose with their defined tasks, and it was a big priority for us to keep our people fully informed about our progress and how things were going. Any tragedy that completely disrupts and stops a business is emotionally distressing for our associates. We were careful to send a clear signal that we were fully committed to a rapid recovery process and that our business would be back,” Steven says.
 
“It's like the quote everyone has heard that is very true, ‘Failing to plan is planning to fail,’” he adds. “There's no better American story than a company and individuals overcoming adversity. When things were at their worst, we were ready and many of our people showed us their best.”

IMAGE: Getty
Last updated: Dec 26, 2012

DREW GREENBLATT

Drew Greenblatt is the president of Marlin Steel, a U.S. manufacturer of steel wire baskets and sheet metal fabrications. Marlin Steel Wire has grown sevenfold since 1998 and gone more than 2,050 straight days without a safety accident, and believes passionately in the American manufacturing renaissance.




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