The damage wrought by Hurricane Sandy serves as a reminder that it makes sense for even small business owners to prepare for the worst. It is a mistake to think that disasters only strike elsewhere. Every business should have a comprehensive emergency response and disaster recovery plan covering all types of possible disasters.
Although a complete plan is best, it is better to have a few crucial pieces in place than nothing at all. One suggestion is to break the overall plan into blocks covering major areas such as data, communication and people.
Below are some suggestions for preparing for disasters in the workplace.
General
- Have a written emergency response or disaster recovery plan. Having a written plan is crucial following any sort of disaster. More than 60 percent of small businesses do not have a formal disaster plan.
- Keep copies of the plan at locations other than your workplace. If disaster strikes at your facility, it could be destroyed.
- Distribute copies of the plan to everyone and make it available online to all employees at all times.
- Review the plan with your employees regularly.
Data
- Data loss is the most common business disaster and can result from human error, hardware failure, natural disaster and theft. Have a backup solution that is right for your business’s needs.
- Know your data. Know what you have, where it is and why it is important.
- Consider paperless options where possible. Paper can be stolen or damaged or destroyed by wind, water or fire.
- Have backups that are offsite, secure and available for recovery 24/7. One popular option that meets these criteria and has the benefit of ease of use and automation is online backup. Other options include backup to tape or external media.
- If you outsource your backup needs, make sure you choose a provider that offers security, monitoring and support.
- Decide who will be responsible for either managing backups internally or working with your provider.
- Practice the recovery process.
- Review your data regularly to be sure you are backing up everything you need. This should be done at least twice a year if not once a quarter.
- Consider cloud computing options. Even if power is lost at your main facility or facilities, employees in other areas may be able to work from other areas where they have power and can connect to the internet.
Contact and Communication
- Keep in mind that information and communication methods could be inaccessible in an emergency. Keep printouts of employee and customer contact information at alternate locations.
- Create backup contact lists and identify alternative methods of communication. Options include cell phones, text messaging, instant messaging, Skype and web-based email services such as Gmail or Yahoo
- Consider using a VoIP system that can let you forward your business lines to other numbers.
- Have critical information available from alternative sources in case you lack access to your servers. Upload critical documents to a secure online document storage site so that they are accessible from anywhere.
People
- Prepare your employees so that they understand where to go and what to do if something happens.
- Designate a location where everyone will meet if you are forced to evacuate during business hours.
- Conduct drills to ensure that employees know what to do and where to go in case of a fire or other emergency during business hours.
- Be ready to check on the safety of employees. A phone tree, where employees call one another and report back to a supervisor, can aid in quick verification if disaster occurs outside business hours.
- Identify critical functions like setting up communications, drafting email and other messages, contacting clients and vendors and handling insurance.
- Decide who will be responsible for each critical function.
- Identify possible alternative working locations (e.g., other office space, working from home).
- Look out for the well-being of your workers. Consider their physical safety and their continuing financial needs. For example, reestablish payroll systems as quickly as possible so that employees can avoid personal financial difficulties.
Other
- Keep a record of your office contents. This will make it easier to substantiate your claims for items such as offices supplies whose costs quickly escalate when an office is destroyed.
- Consider the usefulness of business interruption insurance, which is structured to compensate businesses for periods when they are unable to operate because of disaster.
- Be sure to carry insurance on any materials on site that belong to customers or that are on consignment from customers or suppliers.
- Review your insurance coverage regularly with your insurance providers and with your CPA.
- If forced to rebuild, consider making improvements to prepare for future potential disasters. One firm forced to rebuild its office after a tornado added a concrete-walled “safe room” that contains emergency supplies such as water, flashlights and a first-aid kit as well as backups of important data.
We have served the accounting and tax needs of closely held businesses for over 65 years. We understand the pressures you face today. We work together with our clients as accounting, business, and tax advisers to navigate the current economic difficulties. Contact an MCB adviser for your tax and accounting needs at info@mcb-cpa.com or 703.218.3600 to start building a relationship with a CPA firm who strives to earn your RESPECT and CONFIDENCE as a TRUSTED business adviser.