Continuation of Business Planning

Each year, thousands of businesses and organizations are affected by manmade and natural disasters. Fires, tornadoes, hurricanes, terrorism, storms and earthquakes cause extensive damage and disrupt an organization’s operating ability. An estimated 40% of businesses which close due to a catastrophe or disaster never reopen. Without a pre-defined plan, most organizations find it very difficult to survive a major business outage.
This workbook is intended to provide a brief introduction to business continuity planning. The workbook provides suggestions and guidelines on how to prepare your business continuity plan. The term “business” applies to virtually all economic activities in the private and public sector and the information on business continuity planning is intended as an overview of the concept rather than providing a detailed methodology.
Business Continuity Planning—Defined
Business continuity planning can be defined as “planning to ensure the continued availability of essential services, programs and operations, including all the resources involved.” Business continuity planning prepares an organization to respond to an interruption of essential business functions and provides the guidelines to fully recover operations, services and programs.
Why have a business continuity plan?
Every organization is at risk to some extent. A fire, tornado, earthquake or explosion could seriously damage your building. Floods originating inside or outside your building could affect your operations. A prolonged power outage, sabotaged computer system or damaged equipment can also shut your organization down. Your facilities, inventory and essential information could be inaccessible for a prolonged period. If any of these dramatic events occur, or any others of a less drastic nature, your organization may be unable to continue operating. If the interruption continues, the ability of your business to survive may be threatened. Before that happens, you should arm yourself with a business continuity plan.

In an emergency, the media is the most important link to the public. Try to develop and maintain positive relations with the media outlets in your area. It is also important that you designate a trained spokesperson and an alternate spokesperson who can issue press releases and respond to media inquires. It is critical that the spokesperson know how to communicate technical information in an easy to understand manner.

Businesses that depend on livestock must take special precautions in disaster preparedness. Livestock often have specialized requirements which should be taken into account in Continuation of Business planning, especially, as pets and livestock WILL NOT permitted in municipal emergency shelters.

Here are a few suggestions to help you start:

PLAN TO EVACUATE LIVESTOCK EARLY. The evacuation of livestock often requires a significant amount of time. Therefore, consider evacuating livestock BEFORE a general evacuation order is given. To facilitate this, arrangements for evacuation, including routes and host sites, should be made in advance. It is also important to map alternate routes in case the planned route is inaccessible.
When choosing an evacuation sites, consider if the sites can readily obtain food, water, and veterinary care. The sites must have the appropriate handling equipment and facilities to support the livestock.
To facilitate rapid evacuation, ensure that the trucks, trailers, and other vehicles suitable for transporting livestock (appropriate for transporting each specific type of animal) are maintained in good working order. Keep a contact list of experienced handlers and drivers who can assist in the transport of the livestock. Whenever possible, the animals should be accustomed to the transport vehicles so they’re less frightened and easier to move.
If evacuation is not possible, a decision must be made whether to shelter livestock in a structure (barn, etc.) or turn them outside. This decision should be determined based on the type of disaster and the soundness and location of the shelter (structure).

update insurance. Also remember that insurance on mortgaged property probably only covers the lender with nothing left over for you. Be aware of your contents insurance. Know what your insurance does not cover. Most general casualty policies do not cover flood damage. Many require additional riders for windstorm, sewer backup, or earth movement. Consider adding coverage for likely perils, especially flood insurance. Consider business interruption insurance that assists you with operating needs during a period of shutdown. It may help you meet payrolls, pay vendors, and purchase inventory until you are in full operation again. Also be prepared for the extraordinary costs of a disaster such as leasing temporary equipment, restoring lost data, and hiring temporary workers. Don’t assume that, just because it never happened before, it never will. Flooding patterns are changed by development: water, which runs off new streets and parking lots, may overwhelm nearby streams and surrounding land. Landslides and sinkholes may develop because of distant earth movement, natural or man-made. The creek by your building may be a tiny, placid stream that has never flooded, but a downpour may change it into a destructive torrent that destroys your building foundation. Plan for the worst.

Develop contingency plans to remain in operation if your office, plant, or store is unusable. Could you operate out of your home or a nearby storefront? Could you quickly transport critical items such as computers, inventory, and equipment? Could you save replaced equipment and reactivate it in an emergency? Could you store inventory, equipment, and supplies off-site? Examine the possibilities, make a plan, and assure that you and your employees know what to do.
Make upgrades now that would prevent possible future damage. Strengthening exterior walls, adding a retaining wall, or shoring up a creek bank are relatively minor projects in comparison to losing the building to flood waters.

Purchase a backup generator to maintain full operations or critical functions such as refrigeration, lighting, security systems, and computer control in the event of a power failure. Have back-up vendors and shippers in place in case your primary ones are disabled. Set up relationships in advance and maintain them. Place occasional orders so that they regard you as an active customer when you need them.
Guard against loss of your customer base by diversifying your product lines, sales locations, or target customers. Make it part of your annual plan to develop new customers, even if your current customer base seems fine. Make the time to do so.

Make backup copies of all critical records such as accounting and employee data, as well as customer lists, production formulas, and inventory. Keep a backup copy of your computer’s basic operating system, boot files, and critical software. Store a copy of all vital information on-site and a second in a safe off-site location. Make it a critical part of your routine to regularly back up files.
Make pre-arrangements with computer vendors to quickly replace damaged vital hardware. Keep invoices, shipping lists, and other documentation of your system configuration off-site so you can quickly order the correct replacement components. Take care of credit checks, purchase accounts and other vendor requirements in advance so that the vendor can ship replacements immediately.
Surge-protect all computer and phone equipment through power and phone lines. A power surge through a telephone line can destroy an entire computer through a connected modem. Invest in a surge protector that has a battery backup to assure that systems keep working through blackouts. Maintain an up-to-date copy of phone numbers, computer and Internet logon codes and passwords, employee phone numbers and other critical information in an accessible location. Develop an employee “telephone tree” to rapidly contact employees in an emergency.