Business Contingency Planning Guide

How to Prepare a Business Disaster Plan for Your Small Business

••• Does your business have a disaster plan?. Image (c) filo / Getty Images

A well thought out business contingency plan can mean the difference between your business's survival and failure if disaster strikes. A fire, a flood, a hard drive failure or data theft - any or all of these could put your business out of commission. Taking the time to do some business contingency planning will help ensure that your business is able to resume operations in the shortest possible time.

Use the following guide to create a disaster plan for your business.

To Create a Business Contingency Plan:

1) Determine what the main risks are to your small business.

Is it data theft? Flooding? Earthquake? Figuring out what types of disasters are most likely will help you focus your contingency plan and not waste time and money preparing for something that's very unlikely to happen. There's no point in planning how to recover from an earthquake, for instance, if your business is not located in an earthquake zone.

2) Prepare an evacuation plan.

Go over it with personnel and post it conspicuously throughout your business premises. How will personnel know they need to evacuate? What should they do when they're notified of an evacuation? What routes are available out of the building(s)? Where should people meet outside of the building(s)? Who's responsible for checking to see that everyone is out safely?

3) Create a communications fan-out system.

If something happened at your business, who would be responsible for notifying each person who works there? Ensure phone and email contact lists are up to date and that the people responsible for contacting others have printed lists as all technology fails sooner or later and usually at the most inconvenient time.

Also decide who will be responsible for communicating with the public and how (updating the business website, posting on social media, press releases, signs in the windows, radio announcements etc.)

4) Be sure that your on-site emergency kits are complete and up-to-date.

This Emergency First Aid Kit Checklist for Businesses shows exactly what first aid kits for small businesses need to contain. Depending on what types of disasters may happen in your area, you may want to add other supplies. For example, one gallon of water per person per day is one of the recommended supplies on this list of Emergency Supplies for the Retail Store.

5) Take steps now to protect your business data.

Your business data is your most valuable asset. If it was stolen or destroyed, would your business be able to quickly get up and running again or even carry on at all? 6 Rules of Data Protection explains how you can get the peace of mind of knowing your business data is protected and will be accessible again quickly. Data protection is one of many advantages of switching your business to cloud computing.

6) Ensure your business carries adequate insurance.

Fire insurance is the type that springs to mind, but fire is certainly not the only possible disaster your small business could experience.

Besides other obvious physical disasters such as flooding or wind damage, consider the damage that could result from theft, for instance. And then there's the potential liability factor if your small business is engaged in activities that might open you up to lawsuits.

Choosing the proper type of insurance to cover your risks and having good, up-to-date insurance coverage will go a long ways toward getting your small business up and running again if disaster strikes. 

7) Decide what would be absolutely essential for your small business to start operating again if a business disaster closed you down and take steps to ensure that those essentials would be available quickly.

In the case of our primary business, IT development, we basically need our business data and a computer or two and we could be back up and running (see Data Backup is The Best Protection and backup software programs).

Your small business may need more people and materials before it can reopen. Which people are key to your operations? Do you need particular equipment? Perhaps an arrangement can be made with another business that has the equipment you need. Would you need certain supplies? Find out now who the alternate suppliers or shippers would be.

8) Get to know your neighbors.

Opening the lines of communication with the business owners around you can really benefit your business contingency planning. Let them know what you're hoping to do and see if you can get them involved. You might be able to share the costs of some expenses related to contingency planning or make tit-for-tat arrangements to help each other out in case of disaster.

9) Check out local programs and resources.

Your city or town may have contingency plans/disaster response plans in place or provide resources that will make it easier for you to put your own plan together. For instance, the city of Ottawa offers information about emergency preparedness for Ottawa businesses on its website, and offers training workshops on the topic. See what is available in your town before you start writing your own business disaster plan.

10) Put it all together.

As you work through your contingency plan, put all the pieces together in print form. (Digital copies are nice but not very useful if the power goes out and/or digital devices can’t be used.) A three-ring binder works well. Include your business's evacuation plan, communication plan, information about emergency kits and insurance policies, data protection measures and operational essentials, as well as details of any arrangements you've made to keep or get things up and running again.

11) Keep your business contingency plan handy.

Last but not least, you want to make sure you keep your disaster plan in an easily accessible place and make sure everyone who needs to know where it is knows its location. You should also assign one person and a second to grab the business contingency plan on the way out if the business disaster necessitates leaving the premises.

12) Use Your Business Website and Social Media

Your business website and social media platforms like FacebookLinkedIn, and Twitter are excellent ways to communicate with customers and business associates in the case of an emergency. Don't let your customers wonder if you are open or not when disaster strikes - a quick post on Facebook can keep them up to date. 

Business Contingency Planning Pays Off

It's easy to put off business contingency planning. There are always immediate "crises" that demand our attention. But how significant are they really compared to an event that shuts your business down for hours, days or weeks? Taking the time to prepare a business contingency plan will have a huge payoff if disaster ever strikes.