Earthquake Is Overdue
Here in the earthquake country of Southern California, the “big one” is now more than 20 years overdue.
And the best estimates indicate that if it hit today, 25-50% of small businesses would not survive.
The impact of the failure of a small business – or any business, for that matter – is felt widely. Even if no people are harmed physically, when disaster hits and a business fails,
- Clients lose their source of products or services.
- Suppliers and professional advisors lose a customer.
- Employees are suddenly without any income.
The owner, of course, loses the asset, perhaps his reputation, and the future that the business promised.
Lack of Planning Dooms Businesses
Statistics on surviving a disaster are only estimates, because some businesses hang on for weeks or months after the emergency before they go under.
But research indicates that two factors play a significant role in determining the chances of survival.
- Lack of a suitable plan. A good plan anticipates potential threats, identifies essential functions, and lets employees know what is expected of them in the case of business interruption. A Gartner poll (2009) reported that only 35 % of small businesses had a comprehensive plan in place. Moreover, many plans overlook the key element of communications DURING and AFTER the disaster, when phone lines and electricity are out.
- Lack of practicing the plan. A thick plan on the shelf serves no purpose and may even give people a false sense of security. People need to know what has to be done to keep the business alive – and they need to know they can actually do it. A Harris poll of over 2000 working adults found that three-quarters of them said that their company had not conducted any emergency drills.
In the face of doubt or ambiguity, the first instinct of employees will be to abandon the workplace to get home to their families — leaving the business to its fate.
Missing Pieces Campaign
What is the solution? One way to improve the odds is to have business leaders take the initiative in sharing business continuation planning information with their own customers and suppliers.
A “Missing Pieces” campaign focuses on shortcomings of Business Continuation Planning as mentioned above. Selected business are mailed a letter laying out the issue and offering a free package of materials that they can use for themselves and forward to business connections.
Basing the message on existing relationships adds urgency and credibility to the campaign – and gives everyone a better chance of ensuring that the company can stay alive following a disaster.