Flooding, forest fires and even mudslides can unfortunately be a frequent occurrence in various Canadian regions leading up to and during the summer months. These situations take both an emotional and financial toll on those who live and do business in those areas. However, such events are proof of the strength of those who are able to overcome such chaos and serve as a reminder that it's important to be as prepared as possible for adversity.
A recent study of Canadian small businesses owners conducted by Sage North America showed that Canadian businesses may not be sufficiently prepared for a crisis. While 98 per cent of respondents said they back up their financial data, 71 per cent of surveyed owners said they do not have a formal emergency or disaster preparedness plan in place. Respondents cited that they haven't had any issues in the past that influenced the decision to develop a plan (41 per cent), they hadn't thought about it (33 per cent) or they don't think it's important for their business as reasons for not having a plan.
Although some companies may believe they are not at risk for disaster, it is crucial to always prepare for a worst case scenario. Below are a few tips for small businesses to consider – a starting point to help prepare for, deal with and overcome an emergency situation.
1. Develop a basic emergency plan. Outlining the main issues your business could potentially face and the actions that you would need to take to prevent and/or resolve crisis situations will give you a great advantage if an emergency does occur. Research government agency or business association websites, such as the Canadian Centre for Emergency Preparedness, for resources and strategies to deal with both natural and man-made disasters.
2. Educate and prepare your staff. For the plan to be fully successful, your employees must be aware of the procedures it describes. Only share sensitive information in the plan with those who need to know it, but do share general actions and perform emergency drills and exercises. The more prepared they are for an emergency, the more they will be able to help your business respond and recover from such a situation.
3. Designate an emergency point person. It is essential that more than one person knows critical information such as passwords or the location of important documents. Select a trusted person who can implement the emergency plan, handle financial or legal matters, or recover information in the event that you are unable to do it.
4. Back up essential data. Whether you choose an on-site system, an off-site server or the cloud, backing up your information could be the difference between emergency recovery and the end of your business. Backups should be performed a few times a week and whenever you upload a large amount of information. If you live in tornado-, hurricane– or earthquake-prone regions, an off-site server or the cloud may be your best option. Make sure you choose a solution with a strong brand that has a proven track record for providing secure systems. Your accounting software provider, like Sage, can be a good source.
5. Develop a business continuity plan. After developing an emergency plan, your team should know what their responsibilities are and how to react should those circumstances arise. But what happens after the emergency situation happens? How do you keep your business running while you're still recovering from the effects of an event? This is where a business continuity plan comes into play. It is a proactive plan that ensures that operations continue during a disruption.
6. Create an exit strategy. The Sage survey found that 57 per cent of small businesses do not have an exit strategy. Although you may think this step is not essential to your business, defining an exit plan may save you trouble in case of an unforeseeable situation.
7. Have a lawyer available. Hiring an attorney has become an important part of doing business. A lawyer can help guide and protect you through the legal aspects of preventing or solving an issue, such as an accident in your facilities or a product recall.
8. Invest in prevention. Whether it is the installation of a security system or a waterproof safe, investing now may save you thousands if and when a crisis hits.
9. Get insurance. Although insurance may be costly and seem unnecessary for a rare, potential event, you'll be glad your business is covered if the situation does arise. The best return on insurance is no return at all.
10. Consult with a professional. If you are unsure about how to identify the potential issues that your business needs to be prepared for, or how to plan for recovery, it's a good idea to speak with a business consultant. A professional will not only be able to recognize possible crises you may not have considered, but also inform you of the best solutions for your type of business.
Life is full of unexpected events. The more you prepare your business for potential emergencies, the easier and cheaper it will be for your business to recover.
Nancy Harris is vice president and general manager for Sage's Simply Accounting business.