Scout Motto Still Applies: Be Prepared

“Before anything else, preparation is the key to success.”

Alexander Graham Bell

I watched a sad video today of some of the devastation wrought by Hurricane Sandy in Sea Bright, New Jersey. Block after block of small businesses were totally wiped out. Of those not yet boarded up, all that was visible was a huge, gaping, black interior.

Many of them may rebuild. But a lot won’t. “Small businesses that don’t have a plan in place generally don’t survive after a disaster, whether it’s a flood or a tornado. We see that anywhere from 40-60 percent of those that are hit like that simply don’t come back to business,” said David Paulison, former executive director of the FEMA, in an interview in 2009.

A street in Sea Bright, New Jersey showing the affects of Hurricane Sandy

Truth is, there may not be much you can do to prepare your business if you live by the ocean and are in the direct path of a massive “Frankenstorm.”

You can gather up as much inventory as you can, then ensure that you and your loved ones are in a safe place and hope for the best.

While most business owners won’t ever have to worry about the effects of a massive hurricane, other disasters — natural and manmade — can affect a business anywhere.

I’m currently serving as the court-appointed receiver for a historic hotel. The current owners bought it in 2008 and planned to spend $10 million renovating it, but after they shelled out $7.5 million, water pipes burst and damaged several floors of the property. The owners shuttered the property and tried to liquidate their debts on the hotel through bankruptcy. No go.

So a judge appointed me as receiver to sell the hotel and use the proceeds to pay down the bond debt.

The hotel had been shut down for two years, with no heat or air conditioning. Can you imagine how it looked? And smelled? Let’s just say this is a job bigger than Febreze.

That’s why I say my job is like being a janitor. I’m called in to clean up other people’s messes. This one is going to take more than a mop, a bucket and some disinfectant spray.

The lesson is that you have to be prepared. Better to have a plan and never need it. Remember all those Y2K preparations? My basement was full of drinking water for years. But I never regretted being prepared in the event those dire warnings had come true.

While very large companies often have emergency programs often small and medium-sized companies do not.

If you don’t have a plan, it’s time to make one. Some of the basics to consider when making your plan include:

Investing in disaster insurance. You can get policies that cover the structure of your building, loss of inventory items and even interruption insurance that reimburses you if your company can’t conduct business. (Note that many business insurance policies exclude food and earthquake damage so you may wish to purchase additional coverage if those are areas of concern.)

Backing up your computers with off-site storage. You hear a lot these days about “the cloud.” That’s just a fancy name for a remote server. I know one guy who set up a cloud in his basement so all his computers are backed up away from his office. He also has a generator to keep everything humming.

Setting up plans to conduct business at another location. There are companies that back up all the information needed to run your business and provide the temporary facilities to perform the task.  If disaster strikes, you can show up there the next day and be open for business.

Creation of a list of emergency phone numbers and addresses and contact information for staff, business contacts and major clients. Sure, you have all that information. Somewhere. Make sure you can find all that information fast if you need it.

There’s plenty of information available on how you can prepare your disaster program.

• For small businesses, visit the Small Business Association at PrepareMyBusiness.org.

• For larger businesses, visit Ready.gov/Business

• Visit this IRS site for information on how to safeguard your essential records

• FEMA has additional information for businesses at www.fema.gov/protecting-your-businesses

Just remember the Scout motto: Be prepared.

I’ll close with another of my favorite quotes on the topic by Winston Churchill: “I’m just preparing my impromptu remarks.”

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