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Alberta Venture’s Guide to Disaster Planning

The June flood caught plenty of people in Calgary unprepared. Here’s how you can protect your business from the next disaster

Sep 5, 2013

by Michael Ganley

The flooding in Alberta this year brought the issue of disaster preparedness and recovery into sharp focus for most Albertan businesses. Those directly affected have been learning first-hand about the difficulties of surviving the initial disaster and of recovering their operations in the weeks and months that follow. Those not affected have watched (and often helped), and many have no doubt thought, “There but for the grace of God go I.”

By some estimates at least one-quarter of small businesses never reopen after being hit by a disaster. Businesses with fewer than 10 employees are especially vulnerable since few of them have the resources or knowledge needed to assess risks and develop mitigation and recovery plans. With this in mind,  Alberta Venture has prepared this primer on getting ready for and surviving a disaster.

The first hurdle, says disaster management specialist Laurie Pearce, is finding the time and energy to think about disaster planning at all. “A lot of small- and medium-sized businesses are really having a tough go of it and are operating on thin margins,” she says. “When I say, ‘You have to take some time out to develop some kind of rudimentary plan,’ it’s a hard sell. But the key question to ask is, ‘What are you willing to lose?’ ”

If you’re not willing to lose it all (and who is?), there are resources at your disposal to help you prepare. In addition to this primer, there is training through a variety of organizations, consultants ready to give you a crash course and online tools.

The Planning

First and foremost, you have to figure out what you absolutely have to do to stay in business,” says Pearce, who is an associate professor in Royal Roads University’s master of arts in disaster and emergency management program. She then rattles off a list of questions. “Do you need to be able to keep your store open? Do you have inventory on hand? Can you operate from a remote location temporarily? From your home? If you rely on an office building, what kinds of data do you absolutely need to be able to function? If you can’t afford to be without electricity for two days, do you have a generator? Can employees work from home? You can’t be making these decisions at the last minute.”

Proper planning will include a lot of list-making: Who are your key contacts? Your primary and alternate suppliers? Your IT provider plus details of your hardware and software? At the very least, an emergency preparedness plan should include a list of pre-disaster actions to protect people, buildings and contents, emergency evacuation procedures, and plans for shutting down essential operations and for the off-site storage of digital information.

One of the most important parts of your plan is relocation. If you can’t get to your office, where could you work and how would you get the equipment you need to continue operations?

Information Technology
“It’s like a fire drill. Everyone hates them and it seems like a big hassle, but at the end of the fire drill you feel a little happier that you know how the staircase and doors work. Do the same thing for your business’s data.” – Rishi Patel, president and CEO of Keeran Systems, on simulating the loss of your computer server

Whether – and how quickly – you can recover your company’s digital information is likely to be the make-or-break issue for your business. Rishi Patel, the president and CEO of IT consultancy Keeran Systems, says today’s best practices dictate that you head for the cloud. “Far too often, companies rely on an ad hoc proliferation of solutions that don’t solve the key problem,” he says. “You have a variety of providers who say, ‘Use our product and we’ll back up your information.’ But backup doesn’t really matter. Recovery is everything.”

For effective recovery – meaning getting access to key data within days – you might not want to go with the cheapest options out there. There are lots of companies that will offer to back up your data, but how quickly can you recover it, and what will it look like when you do? “It could take a week, a week and a half to pull down a few gigs,” Patel says. Most companies would have far more info than that, and not that much time to spare to recover it.

If you really want to be able to recover your information in a quick and accurate manner – to essentially have your files and emails looking like they did in the moments before the disaster struck – you need to ensure that whoever is providing your backup is using fast hard drives, robust servers and fast Internet connections. To test your backup, Patel suggests that, just like your company might practice a fire drill, you should simulate a disaster. “Don’t wait for one to happen,” he says. “Disconnect your server and see how long it is until you’re back up.”

Oh yes, and, at the very least – this is setting the bar very low, but still some companies are failing to reach it – do not have your backup server in your office.

Insurance

Right now is a good time to take another look at your insurance coverage.

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Be forewarned: liability insurance is not enough. You need business interruption insurance, which helps to replace the income your business would have generated if it had not been shut down. To make this claim, you’ll need historical sales records and income and expense records.

And almost without exception when talking about insurance claims, you will need patience. Commercial damage claims tend to be slower and more complicated than homeowner claims because many of them will involve multiple insurers.

One bit of good news for commercial property owners is that they can, unlike homeowners, opt for overland flooding insurance coverage as well as sewage-water backup.

Supply Chain

The effects of a disaster might well be felt upstream and downstream from your specific business. If your suppliers or your customers were hit, and if they didn’t have an effective plan in place (or if transportation corridors were affected, as they were when the TransCanada Highway through Canmore was washed out), you could still be out of business. The key here is to identify alternate suppliers ahead of time.

What to do after a Disaster

Flood
Flooding is the most frequent natural disaster in Canada. Before re-entering a flooded building, ensure the power to the property is turned off.

Fire
Do not leave the site unsecured. Protect it from further damage from weather, theft or vandalism.

Extended Power Outage
Turn your breakers off and unplug everything in your business, including computers and televisions, to prevent damage from an electrical overload when power is restored.

Further resources
The fields of crisis management, business continuity and business recovery are vast and complex. Here are a few places to go for further information:

The Institute for Catastrophic Loss Reduction has a suite of tools for businesses to use to prepare for and recover from disasters at www.iclr.org.

The federal government has a guide to business continuity planning at www.publicsafety.gc.ca.

Other resources can be found through the Canadian Red Cross (www.redcross.ca), the Disaster Recovery Information Exchange (www.drie.org) and the Disaster Recovery Institute Canada (www.dri.ca).

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