by Rebecca Tonn
July 4, 2008
What would happen to your business if, for instance, a water main broke nearby and employees and customers could not access your building for 10 days?
Many entrepreneurs are so busy with the day-to-day responsibilities and challenges of running a business that they forget to prepare for the inevitable. And, no, that’s not being pessimistic.
“Micro-disasters,” as author Donna R. Childs calls them, happen frequently: power outages, servers down, human errors, computer/network viruses, equipment failures, and construction accidents that disrupt pedestrian and auto traffic.
Is your business prepared to handle the daily disasters? And what about the occasional catastrophe? Yes, they do happen — just ask Childs.
Her business, Childs Capital LLC, is in Zone 1 of the World Trade Center. She also lives a 10-minute walk away — “in the shadow of the Twin Towers.”
As a former senior executive of one of the world’s largest reinsurance firms, Childs was used to dealing with small and large disasters on a daily basis. Thus, her business was well-prepared for Sept. 11.
Unable to access her office or home, as both were in a federal disaster zone, she ran her business from New Jersey for several months. Childs had learned about disaster-proofing a business during 1993.
“Ninety percent of the businesses that didn’t open within five days after the 1993 World Trade Center bombing were out of business within one year,” Childs said during a recent seminar at the Antlers Hilton. “You have to recover quickly, or you don’t recover at all.”
Childs said that businesses should have three backup sites that are physically removed by at least 500 miles, in case of regional disasters — tornadoes, hurricanes, floods, lightning and, God forbid, terrorism.
And for those who think such things cannot happen in Colorado, Childs said, remember that your suppliers or clients might live elsewhere. What happens if your primary or sole supplier’s products are eight feet under water? Or your client base lives in a disaster zone and no longer needs or can afford your services or products?
These are not far-fetched scenarios. Childs sees them frequently and cautions business owners to plan far ahead. Her motto is the same as the title of her book, “Prepare for the Worst, Plan for the Best: Disaster Preparedness and Recovery for Small Businesses.”
Small business owners should consider adding insurance endorsements such as lease-hold, set and match, disability, key person, business interruption and interruption of electrical supply.
Her book offers detailed instructions about setting up remote operations, data backups, electrical generators, information technology strategies and more — in order to have a sound contingency plan for a small business. It also provides information about how to navigate the insurance system after a disaster and other aspects of disaster recovery, including the psychological affects on employees and business owners.
Often much of the expense of disaster-proofing a business is recouped by lower insurance costs and by the resulting efficiency of business processes, Childs said.
“More than one in four businesses will experience a significant crisis in any year,” according to a 2005 survey conducted by Continuity Insights magazine and KPMG Risk Advisory Services.
For more information, visit www.preparedsmallbusiness.com.
Incubator’s first graduate
One of The Tri-Lakes Business Incubator’s first tenants is the first company to graduate. RTL Payment Systems, a financial software company, started in the garage of founder David Schoenberger.
During the span of six months, the company has grown to the point that it needs to lease a larger space — on its own.
The incubator currently has six member companies.