Hurricanes, cyber-attacks, and volcanic eruptions, oh my! Natural disasters and other external threats can happen at any moment and critically impact your business. In a report from the Federal Emergency Management Agency (FEMA), 40% of businesses do not reopen following a disaster. On top of that, another 25% fail within one year. This is why it’s important to have a plan that ensures your organization can keep essential functions running during a disaster and recover with as little downtime as possible.
Wondering where to start? John Foster, our Senior Insurance Consultant at simplicityHR by ALTRES has put together a guide to help you weather the storm.
Business Continuity for Hawaii Employers
Written by John Foster, CPCU, ARe, ASLI, AFSB
To help ensure business survival you need to quickly assess four critical areas: people, capital, documents, and operations.
The first step in planning for the continued success of your business is taking stock of all your assets. And the first and most important asset you have is people. This includes employees, clients, vendors, partners, and more. Make lists of all the people your business touches and be sure you can communicate with them quickly and efficiently. At a minimum, you should be able to write an email and send it to all your employees or all your clients. Use your website and social media to connect and communicate.
While no fun, it is time to re-calculate your assets and liabilities. Even if you had to lay off or furlough your employees and your doors may be closed for six to eight weeks or longer, it’s time to revisit your property, inventory, equipment, and any other assets that belong to your business. Next, itemize and calculate the liabilities. You need to know your numbers, so when it’s time to talk to creditors, you can clearly communicate your unique situation.
Gather all your important documents. If your important documents are not digitized, organized and backed-up, now is a good time to make this effort. Whether it’s employment-related, tax information, or new reporting requirements attached to disaster loans, documentation is critical. If you are already a simplicityHR by ALTRES client, then you don’t have to worry about your payroll and HR documentation, it’s at your fingertips in HR Symphony.
This does not need to be complicated: write a list of all the critical processes that define how you operate. For each process, put down the name of the person who will be responsible for that process. If you are running at 50% of your normal operation, the people responsible for various processes may need to shift. That is to be expected. You need to decide who will be doing what, and then you need to communicate the new expectations.
Evaluate your options
After you are comfortable that your business’ people, capital, documents, and operations are clear in your mind, you can now think about your options. Take a realistic look at where things stand and evaluate how you’ll move forward. How much money will you need to cover your liabilities? Do you have the cash? Do you have credit lines?
Your creditors do not want to see you fail. You were a good-paying customer, but now you may have little to no revenue. Once you have a clear written plan for how you plan to manage this difficult period, you will be ready to share that and begin rebuilding your business.
This article is for informational purposes only and does not constitute legal advice. Readers should first consult their attorney, accountant or adviser before acting upon any information in this article.