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November 2004                                                                            Volume 7 - Number 2

Business Update...

The Small Business Disaster Toolkit
 by Michael Pariser

The Institute for Business & Home Safety (IBHS) is a nonprofit association that engages in communication, education, engineering and research. Its members are insurers and re-insurers that conduct business in the United States or reinsure risks located in the United States.

Insurance industry groups estimate that many businesses go bankrupt believing crises only happen to others and that their size or some other feature makes them immune. Some firms believe that insurance alone will cover the cost and will enable them to recover effectively from a loss or incident. Insurance is a key component, but it does not provide the method to recover and rebuild the organization or win back customer confidence.

According to Diana McClure, the director of public safety strategies at the Institute for Business and Home Safety: Open for Business: A Disaster Planning Toolkit for the Small Business Owner was developed by the Institute for Business and Home Safety and the U.S. Small Business Administration. The toolkit, available at http://www.ibhs.org/docs/openforbusiness.pdf , helps small business owners assess risk for a variety of natural disasters. The toolkit contains information on how to protect your building and contents, and what to consider so that you can resume key business operations. It includes some forms to record essential information to help with that recovery. IBHS is currently developing an updated version of this toolkit, which will be available by February 2005 in both hard copy and CD formats, in addition to a downloadable PDF.

The ‘Disaster Toolkit’ is a convenient way to organize information that is critical, but often hard to locate during or after a crisis, and it is a real opportunity for a self assessment and a valuable learning opportunity. Businesses do not necessarily need to hire a full time risk manager or retain a consulting firm to analyze potential hazards, but the simplicity of the ‘Disaster Toolkit’ makes it easy for the layperson to at least understand terms like critical infrastructure, key personnel and continuity and put them in perspective of their own business.

Bombs, fires and floods capture the headlines almost 90% of crises are ‘quiet catastrophes’. It is these quiet catastrophes that also have the potential to damage a firm’s most valuable assets; its brand and reputation. These can be destroyed very quickly unless vigorously defended at times when the speed and scale of events can overwhelm the normal operational and management systems. Effective business continuity management demonstrates this capability and will enable your organization to return to normal.