How to prepare your business for an emergency – flood, fire or storm
As the impacts of climate change are being felt more and more, with increased frequency and severity of weather events, you need to consider how your business could be impacted by this kind of emergency.
You may need to consider both your physical business premises, if you have them, as well as your home, especially if you work from home.
None of us likes to think of a flood, storm or fire impacting our lives and businesses so we avoid making a plan to deal with the situation. Yet having a business contingency plan, your Plan B, is essential. By taking time now to create this plan for your business, and your team, means you’ll have a clear set of actions to take should the unthinkable ever happen.
I’ve listed six key areas to consider when putting your plan together.
1. Personal safety
Services Australia, a branch of the Government, has put together information to help prepare your household for an emergency, including a toolkit for you and your family. You can find that information on their website.
Take time to put your plan and toolkit together for your household. Also, ensure that any team members are aware of this information and have taken the steps they need to ensure their personal safety.
Depending on whether you work from home or from business premises you need to ensure that your plan and toolkit also take account of any physical items you would need to take with you if evacuating on short notice.
If you couldn’t return to your business premises or home for an extended period of time, what would you need to continue to run your business? Laptops, phones and charges should all be on that list.
2. Initial Communication
Once everyone’s safety is ensured you need to have a communication plan. It needs to cover how you will let each other know that you are safe, as well as letting your clients and suppliers know what has happened and what the next steps are.
You also need to communicate if you’re able to work e.g. will you be in temporary accommodation that has limited internet connection?
3. Ongoing communication and work
If you have a team then it’s important to consider what they’ll need if you’re suddenly unavailable, or if any member of your team is.
Do they have access to the information they need to run the business in your absence? Can they access your emails or documents stored in the cloud?
Do they know what your tasks within the business are so they can manage them? Are your policies and procedures up to date so that a member of your team can step in and pick up your tasks? This also applies if a team member is unable to work.
While your team might not be able to do every task that you do within the business, they should know what those tasks are, what priority they have and what to do in the event you’re unavailable.
If you’re a sole trader without a team, then now is an opportunity to consider who could be part of your temporary team. Could you leave instructions with your accountant or lawyer on what needs to happen in an unexpected absence? Alternatively, do you have a trusted business owner that you know who could step into that role?
As an accountant I have certain obligations that only another chartered accountant can perform, so I have an arrangement with a trusted business colleague from my accounting firm days that we will stand in for each other if either of us is unable to run our businesses.
As well as ensuring access to business documents, you also need to know how to access any essential personal documents e.g. insurance policies. Where are they stored? If they’re stored in the cloud, who has passwords to access those documents? If they’re in printed form then they need to be part of your toolkit.
4. Suppliers and clients
After the initial communications to your clients and suppliers letting them know what has happened, you need to consider what running your business will look like in the short term. Will you be unable to work at all for a period of time? Will you only be able to do the minimum work for the foreseeable future? What happens to work that’s already been started – what will the timelines now be? How will your cashflow be impacted?
The kinds of questions you’ll need to ask yourself will depend on the specific type of business you have. This is where having a trusted advisor to talk to, like your accountant, can make the world of difference to how prepared you are to manage this kind of emergency.
5. Government support
Details of emergency payments that are available for natural disaster events can be found on the Services Australia website.
6. Insurance
There are two types of insurance to consider as part of your business contingency plan.
Income protection insurance covers the risk of you not being able to work. The aim of this kind of cover is to meet your ongoing financial commitments, e.g. mortgage payments, until you’re able to return to work.
Business insurance can cover a broad range of areas including business interruption.
An insurance advisor will be able to guide you on the types of business insurance that will be relevant for your particular business.
Having to deal with a natural disaster event will be stressful. None of us like to think that we’ll ever need to deal with an event like this, it’s well worth taking a few hours to map out your contingency plan. You may never need to use it, yet if its ever required you’ll appreciate that you took the time to put one in place.
If you’re concerned about the readiness of your business to deal with this kind of event book in a 20-minute call with me to discuss how I can provide the support you need.