At least one-fourth of all businesses that close because of a disaster never reopen, with small enterprises the hardest hit, according to the Institute of Business and Home Safety (IBHS). The reason? Most fail to plan for such unforeseen events and are left in the lurch when it comes to disaster preparedness, mitigation and recovery.
In light of the recent rash of natural disasters this past spring — floods, wild fires and tornados — lighting showrooms would be wise to assess their disaster readiness and ability to get back in business following such an event. To that end, the IBHS suggests that business owners ask themselves the following questions to assess their readiness.
• Could you communicate with your employees in the wake of a disaster?
In other words, do you have vital information about each of your employees at the ready? At the very least, do you have cell phone numbers and e-mail addresses handy, so you can contact employees to make certain they are safe and make plans to regroup after the danger has subsided?
Even though many residents of New Orleans fled the city after Hurricane Katrina hit in August 2005, New Orleans-based Lighting Inc. owners were able to communicate with employees.
“We had everyone’s cell phone number, and after Katrina we were able to communicate that way and through e-mail,” recalls Michael Ber, President of Lighting Inc. “Even though I wasn’t able to access e-mail at my house, I could drive up the road and sit at McDonald’s with my laptop and use WiFi to talk to everybody.”
The importance of staying in touch with employees shouldn’t be underestimated. In fact, it’s one of the big reasons that Lighting Inc. is doing as well as it is today.
“We’ve been very fortunate that most of the people we have now, we had pre-Katrina,” Vice President Otis Alexander says. “Most of my sales staff has been here 15 or 20 years, so I have a knowledgeable group of people who are really key to what we do.”
• Are your lighting showrooms' vital records protected?
Needless to say, computer records are among the most at-risk items in a natural disaster. For most companies, safeguarding this essential information requires backing up computer files and storing them at a remote location.
“We knew something was going to happen two days before Katrina [hit],” Ber says. “So, we took a couple backup tapes of computer records, but we couldn’t read them when we loaded them onto another computer. We were lucky that our server was able to be salvaged. If something like this ever happens again, we’ll disconnect the server and take it with us.”
• Do you have the right kind of insurance?
Ultimately, insurance is the key to enabling a business to rebuild after a disaster. That was certainly true for Lighting Inc. Without it, there would have been no way to recoup losses and rebuild inventory or infrastructure. The original two-story showroom, which houses inventory, was insured under two separate policies, one of which specifically protected the business against losses due to flooding.
“We had flood insurance that covered property and inventory, and we got paid for everything, except business interruption,” Ber says.
The result of Lighting Inc.’s planning is that the small business got a chance to rebuild and correct many of the mistakes and shortcomings of the past, Alexander says. Now operating in a brand-new, 7,000-square-foot building, Lighting Inc. is in better shape than it’s ever been.