I am heading off to Chicago later today for the Association of Small Business Development Centers (ASBDC) annual conference. I have worked in three other SBDC networks and this conference provides the opportunity for me to visit with some old friends from Alaska, Arizona and Indiana. I also look forward to reconnecting and sharing war stories with some friends I met while doing relief work coordinated by the ASBDC after Hurricane Katrina. The ASBDC recruited this effort and I was joined by personnel from Florida, Maryland, Massachusetts, Nebraska, New Mexico and Tennessee to serve in Hattiesburg, Mississippi to help some small business owners deal with the aftermath of that storm (http://cccsbdc.blogspot.com has some details on that experience).
With Hurricane Gustav currently pounding away at the Gulf Coast, it provides a stark reminder on how the forces of nature can wreak havoc on our livelihoods. Millions of people were evacuated over the past few days and it is unfortunate that many will return to bear witness to the powerful damage that wind and water can do to homes and businesses.
As the sun shines here in Plattsburgh today, and in many other areas of the country, the storm that is pounding the Gulf Coast is also providing us the opportunity to learn a valuable lesson. As John F. Kennedy once said, “the time to repair the roof is when the sun is shining.”
In business planning, we talk about market analysis, marketing strategy, financial forecasting and operational management. Usually, risk management is just an insurance quote that goes on our profit and loss projections. Many business owners go no further than getting their insurance policy and putting it into the filing cabinet. Yet, I learned how important my insurance agents were to my businesses in short order as they helped me through a series of difficult issues ranging from wind damage, lightning strikes, worker injuries, earthquakes, theft and vandalism (thanks Dennis Regan & Norm Tyler).
With the power of hindsight, I wish I had given risk management and contingency planning more thought. As an eternal optimist, I think more about what can go right than what can go wrong. Reality is that life happens and things do not always go as planned.
While I have faced some challenges that resulted in some fairly significant financial loss, I count myself fortunate that the results of both the natural and man-made disasters I faced were minimal relative to what others have encountered. While I am no expert in disaster preparedness, I became better over time, learning from my mistakes and developing contingencies for future events.
It became common practice for my wife and I to add to our employee manual what we would do in the case of future events. We covered things such as power outages, equipment damage, earthquakes, windstorms and snow/ice events. Another thing that we did was to prepare for economic issues. We derived our family income from our businesses, so we always had a plan to whittle down our living expenses and to earn income outside of our businesses if sales slowed or stopped due to any series of events.
All businesses could benefit from developing their own contingency plans. Hopefully, your plan will be more well thought out than the haphazard and reactionary documents that I created. Think about natural events, mechanical issues, utility issues and what it takes to keep your business running (and your family fed!). Of course, your priority should include planning to promote the safety and welfare of you and your employees.
Below is a link to a helpful website.
http://www.ready.gov
I also encourage you to spend more time with your insurance agents. They have experience in dealing with these types of issues and the have real solutions to help your business. One of the powerful images that I remember from visiting Mississippi in the aftermath of Hurricane Katrina is in the photo below. I am not promoting this one insurance company, but it sends a clear message that life goes on as long as life goes on. Being prepared for these events just makes it a little easier.
I wish those in the Gulf Coast the best as they ride out this storm.
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