Planning for Business Continuity During Natural Disasters

A “flood” warning sign sits on a flooded city street, with a business building and fire truck in the backgroundNatural disasters have been part of life for centuries, but they are becoming increasingly common and more severe. According to the United Nations, the number of weather-related disasters has surged five-fold in the past 50 years, with more than 11,000 events that caused $3.64 trillion in damage.

Regardless of where your headquarters is located, natural disasters can disrupt your business operations. Hurricanes, wildfires, and snow storms can prevent your team from working effectively.

While you can’t avoid every disruption, you can minimize their impact through continuity planning.

What Is Business Continuity?

Business continuity is the ability to keep your operations going throughout a disaster and in the wake of an event. It involves carefully reviewing your operations and processes to see if they can weather a storm. This needs to be done long before a natural disaster strikes so you are prepared when something happens — just like practicing a fire drill prepares you for an actual fire.

Business continuity is important because it has a direct impact on your profitability. The sooner your employees can get back to work after a disaster, the more likely they can avoid missed deadlines and problems with customers. Your employees also want to get back to work so they can earn a living as well.

Creating a Business Continuity Plan

Developing a business continuity plan requires a high-level leader to guide the overarching process, but it also needs to be done on a team level. Every department — from your IT employees to human resources, will have different continuity challenges. These team members can apply their expertise to continuity planning and jump into action effectively when there is a crisis. Here are a few steps to embrace business continuity.

Conduct a Risk Assessment

Every business continuity plan starts with an assessment. This reviews your company’s most notable risks and the financial implications of each one.  In the worst-case scenario, you risk losing your entire headquarters due to a storm. If you manage a construction business, you risk losing all of your projects overnight because of a Category 5 storm. For example, when it hit Florida in October 2022, Hurricane Ian caused $112.9 billion worth of damage and completely destroyed 5,369 structures in Lee County alone.

Naturally, not every business needs to prepare for a hurricane, but you need to look at the risks related to your operations. Not only do you need to see what you stand to lose, but you also need to consider how your business would get back online and start to function in the wake of a disaster. You cannot control Mother Nature, but you can control how you respond to her storms.

Determine Your Energy Needs

Even if your offices are closed during this time, you will need some sort of energy to protect your pipes in extreme cold and keep sensitive chemicals cool in the heat. Determine which functions are essential in a storm and estimate their energy consumption.

Once you have a clear picture of your energy needs, look at your fuel sources. Make sure your backup generator and your generator fueling solutions can keep up with the demands you put on it. Also, evaluate your fuel storage and delivery options so you can refuel in an emergency. Certain providers will provide emergency generator refueling services, such as a priority response program.

Consider your energy consumption needs in the event that you lose your main power source for several days and need to maintain certain internal temperatures in your warehouses.

Develop Communication Protocols

One of your most powerful tools in an emergency is clear communication. Your team needs to jump into action and report how they are working to get the business running again. If your team members are away from the office for a few days, your communication efforts alert them that it is safe to return to work.

For each step in your continuity plan, outline the flow of communication. For example, when the power goes out, assign someone the role of monitoring and reporting the daily fuel consumption of the backup generators. This might seem like a small step, but in a crisis, you can’t guarantee that someone will take on every necessary task unless it is assigned.

Your communication protocols should consider every employee, vendor, customer, and shareholder. This way all relevant parties are aware of the state of your business until it is operating fully again.

Prepare Your Supply Chain

A natural disaster doesn’t have to hit you directly to affect your operations. If the ports close on the West Coast, you might not receive the shipments you ordered for your East Coast business. Fortunately, you can apply your business continuity planning to your vendors.

Talk to your suppliers ahead of time to learn about their emergency plans. You can also develop relationships with backup vendors that you can call in a pinch. This way, if you can’t get the items or services you need, you already have trusted alternative options in place.

This is particularly important when it comes to planning your emergency fuel services. During a crisis, access to diesel fuel can be limited if delivery drivers can’t make it to your area. Not only do you need fuel storage but also reliable vendors to deliver the fuel you need. Make sure you have backup vendors for the different types of fuel you need for the various parts of your operations.

Reevaluate Your Insurance Policy

Get into the habit of evaluating your insurance documents whenever they are up for renewal. Too often, companies find an insurance provider and stick with them for several years without considering how their needs change. If your business has grown over the past few years, your policies might not cover as much as they should.

Evaluate if the payout will be enough to compensate for lost income. Also, ask your provider to detail exactly what is covered and what isn’t. For example, does your hurricane protection cover water damage or would you need to invest in flood insurance? In cases like Hurricanes Ian and Katrina, many business owners didn’t receive the support they needed because their insurance covered wind damage, but not floodwater damage. This ultimately determined their rebound rate and their financial recovery from the disaster.

Back Up Your Data in the Cloud

Businesses are increasingly governed by data. Thousands of data points are collected and used each day to streamline warehouse operations, market to potential customers, balance company budgets, and even manage employees. If you lose your data in a natural disaster, you risk serious disruption that could set your team back for months. Everything from employee ID numbers to average fuel consumption could be lost.

This is why experts recommend investing in business continuity well before disaster strikes. By storing your data in the cloud, you can avoid any disruptions because your company’s information lives in off-site servers. You still have all the information you need to run your business at your fingertips the second the storm passes.

Posted In: Resources