Worst Case Scenario: Make a Plan for Potential Disasters

Best practices and basic steps to help you safeguard your business

The sheer number and variety of disasters that can strike — and potentially devastate — your business is enough to keep any retailer up at night, regardless of how comfortable your mattresses might be.

Hurricanes. Fires. Earthquakes. Floods. Tsunamis. Tornadoes. Blizzards. Landslides. Volcanic eruptions, if you happen to be located near one of those. And that’s just what Mother Nature can throw at us. Add active shooters, bioterrorism, pandemics and cyberthreats.

Here are some numbers that are just as scary: According to Ready.gov, the disaster preparedness website of the Federal Emergency Management Agency, 40% of small businesses in the United States don’t reopen after a disaster and, one year later, an additional 25% will have failed.

With day-to-day operations consuming the time and attention of retailers, it’s easy to push topics like emergency prep and business continuity further down the to-do list. If you’ve failed to plan or let your plan get out of date, you’re not alone. Nearly two-thirds (62%) of businesses say they don’t have an emergency plan in place, according to Ready.gov. And that sets them up for a double disaster because, as FEMA officials note, 75% of businesses without a continuity plan will fail within three years after a major storm or other crisis.

“No one wants to experience weather emergencies or disasters — especially ones that personally affect them, their employees and their business. The simple truth is that manmade and natural disasters, be it severe weather or other disasters, such as earthquakes or wildfires, can strike anyone at any time and anywhere,” writes Lanny Floyd, an expert in electrical safety in the workplace, in an article for Cintas, a business services company based in Cincinnati.

But here’s the good news: While you may not want to spend a lot of time thinking about what would happen if a tornado whipped through one of your stores or a landslide buried a warehouse, emergency preparedness experts, insurers, risk management firms and others think obsessively about “what if” and have created a host of helpful tools to help you prepare for the day we hope never comes.

We can’t possibly cover all the details you’ll need to consider in your own disaster preparation, but we’ll share some best practices and walk you through the basic steps you’ll need to take to ensure that, if the unthinkable happens, your business will be one of the survivors.

First steps in prep

• Assess your risks. “Ask yourself what you would do if the worst happened. What if a fire broke out in your warehouse? Or a hurricane hit your building head-on? Or a train carrying hazardous waste derailed while passing your loading dock? Once you have identified potential emergencies, consider how they would affect you and your workers and how you would respond,” Floyd says.
  The Ready Business Toolkits available at FEMA.gov show the relative vulnerability to earthquakes,  hurricanes, tornadoes and other threats across the United States. You also can check with local disaster preparedness officials in your area, as well as your insurance company, to determine what threats you’re most likely to face at your stores, warehouses and distribution centers. Some risks, like active shooters and building fires, have no geographic propensity and should be included in every company’s plan.
• Review your insurance policies. Revise your policies as needed to make sure you have adequate coverage for the risks you face, advises Nationwide Mutual Insurance Co., headquartered in Columbus, Ohio. See if business interruption insurance makes sense for your company.
• Create an emergency plan. This should include preparations you’ll take before a disaster, what management and staff will do during an emergency, and how you’ll operate and rebuild afterward. (We’ll talk more about this shortly.) Note that the U.S. Occupational Safety and Health Administration mandates some employers take specific emergency preparedness steps. Your city and state may have their own requirements regarding worker safety and disaster preparation.
• Develop a crisis communications plan. It should include how you’ll stay in contact with employees (and their families), customers and vendors during and after a disaster. Designate a spokesperson to handle communications with each of these groups. You’ll also want to decide who will speak with the media and who will coordinate with emergency responders.
• Disseminate and practice your emergency plans. All your managers and employees need to be aware of your emergency plans and know their roles and responsibilities. Schedule regular reviews of your procedures and run preparedness drills, ideally at least once a year.
• Stock all of your locations with emergency supplies.

Make a plan

We’ve included links to detailed guides that can help you create your disaster plans, but there are some general topics you’ll need to consider as you prepare.

Among your first tasks, FEMA advises, should be creating a site plan of every floor of every facility that can be used by emergency services. “Plans should show the layout of access roads, parking areas, buildings on the property, building entrances, the locations of emergency equipment, and the locations of controls for building utility and protection systems,” according to the Ready.gov website. “Instructions for operating all systems and equipment should be accessible to emergency responders.” Give a copy to the emergency services that would respond to a problem at each facility and invite in representatives of police, fire and medical services to a meeting where you can discuss expected response times to your facilities and ask for advice about hazard mitigation and improving your capabilities to cope with an emergency.

You also should establish the roles and responsibilities of managers and employees in the event of an emergency. Nationwide notes that you’ll need to gather (and keep up to date) contact information for all staff, establish a chain of command (including backups if people who are supposed to be in charge are unavailable) and create phone trees (or text messaging trees) for communication. Employees can be trained in first aid and key staff should know how to locate and shut off major utilities.

Should I stay or should I go now?

Another thing to consider as you plan is where it will be safest for your employees to be during various emergencies. For instance, in the case of a fire, they’ll need to evacuate. If a tornado is heading your way, sheltering in windowless interior rooms will be the safest option. Ready.gov recommends including all of these scenarios in your preparations.

• Evacuation:Create a warning system (the fire alarm, public address system or even airhorns can work) to notify everyone to evacuate and establish safe areas where employees can assemble until the incident or threat is over. Employees should know both main and alternative exit routes. “Appoint an evacuation team leader and assign employees to direct evacuation of the building. Assign at least one person to each floor to act as a ‘floor warden’ to direct employees to the nearest safe exit. … Ask employees if they would need any special assistance evacuating or moving to shelter. Assign a ‘buddy’ or aide to assist persons with disabilities during an emergency,” Ready.gov advises.
• Sheltering:In the case of severe weather like tornadoes or heavy thunderstorms, employees will be safest in windowless interior rooms on the lowest level of the building. FEMA recommends holding drills to ensure all your employees fit in designated shelter spaces. To keep up with weather watches and warnings, Ready.gov advises subscribing to free text and email warnings. They’re available from sources like Weather.com and AccuWeather.com and from your local TV stations.
• Shelter in place:“A tanker truck crashes on a nearby highway, releasing a chemical cloud. A large column of black smoke billows into the air from a fire. … If, as part of this event, an explosion or act of terrorism has occurred, public emergency officials may order people in the vicinity to ‘shelter in place,’ ” Ready.gov explains. “Have everyone remain sheltered until public officials broadcast that it is safe to evacuate the building.”
• Lockdown:Tragic as it is, in the United States schoolchildren practice lockdowns in the event of an active shooter on their campus, and businesses should, as well. In its latest guidance, the U.S. Department of Homeland Security advises three responses to such danger. First, if possible, run. Have an escape route in mind, leave your belongings behind and keep your hands visible. If you can’t escape, hide. Block or lock doors, take shelter far from entryways and silence your cellphone. Finally, “as a last resort and only when your life is in imminent danger,” fight back and attempt to incapacitate the shooter. Consider training employees in emergency first aid to help wounded employees until first responders arrive.

Your annual employee training for emergencies should include practicing for all four of these scenarios.

Getting back to business

Thus far, we’ve been talking primarily about emergency preparedness, which Christopher Britton describes as “directing people and resources away from danger, holding emergency drills and training sessions, evacuating facilities and working with first responders to ensure all stakeholders make it through a crisis safe and sound.” Britton is chief operating officer for RockDove Solutions, a company based in St. Petersburg, Florida, that developed a crisis management platform called In Case of Crisis.

But, Britton says, for businesses to rebuild and rebound after a disaster or crisis, they also need to address business continuity, which includes “protecting the business’ reputation online, establishing and maintaining redundant systems and support teams, restoring IT systems, and ensuring employees are able to return to their daily work tasks following an emergency.”

Ideally, Britton says in a December 2016 company blog post, “emergency management and business continuity personnel would be completely separate entities with their own teams.”

We’ve covered the types of issues emergency preparedness teams should tackle. He says business continuity teams should focus on avoiding “business-disrupting problems.”

“Typically, business continuity plans aren’t distributed to the entire company, but rather to key stakeholders who would be involved in business continuity efforts,” Britton says. “This might include the executive team, the IT department, PR and communications, and other related groups.”

Nationwide recommends a number of practical steps your company can take to ensure your business returns to normal operations as soon as possible after a natural disaster or other interruption to your business. These include keeping a copy of all your customer records and vendor contacts off-site or in the cloud, and maintaining a list of vendors in case of disaster at one of your vendors’ facilities.

Having all business processes documented can help you get back to work more quickly. Again, store duplicate information off-site or in the cloud and have a regular backup system for all computers. A lot of this stuff sounds basic, like it doesn’t even need to be said, but think back to those stats we mentioned earlier. Few businesses do the work of preparing — and suffer for it.

Such business continuity plans are especially important in light of an interesting finding into how businesses are impacted by disaster, says Kathleen Tierney, emerita director of the Natural Hazards Center at the University of Colorado, in a July 2018 Government Technology article by Jim McKay.

“We found during the extensive research we did on businesses was that in disasters,” Tierney says, “the key source of disruption isn’t necessarily damage at the site of the business but offsite, such as loss of electrical power, loss of water and natural gas, so a business can come out unscathed but not be able to operate.”

In Case of Emergency: Break Open the Kit

Many of us heed the advice to have emergency kits stashed in our cars and homes, but businesses also should keep basic supplies on hand in case employees have to shelter in place for a day or two.

The items you need to stock are similar to those you’d keep at home, just in larger quantities. Remember, each of your company’s locations needs to be equipped with these items. You’ll have some of these items, like trash bags, in the building already, but set plenty aside in emergency kits: After a disaster isn’t the time to find out someone used all the paper plates and cups to celebrate Javier’s birthday the week before.

The American Red Cross recommends your kit include:

• • Flashlights
  • Battery-powered radios, including at least one hand-crank or battery-powered weather radio
  • Extra batteries
  • Disposable plates, cups and utensils
  • Nonelectric can opener
  • Nonperishable food items to sustain each person for one day. (We’d advise two- or three-days’ worth of provisions to be safe.) Items should include ready-to-eat meals; canned meats, fruits and vegetables; juices; and energy bars. Refresh the stash twice a year, tossing expired items and donating items nearing expiration to a charity.
  • 1 gallon of water per person, per day
  • First aid kit
  • Plastic garbage bags
  • Mylar blankets
  • Personal hygiene items (toothbrushes, toothpaste, combs, brushes, contact lens solution, feminine products, etc.)

We’ll add to this list investing in cellphone chargers — for both Androids and iPhones — that don’t require electricity, plus a variety of charging cords. Employees will be less anxious if they can communicate with loved ones and keep tabs on the outside world.

More Resources

• “How to Plan for Workplace Emergencies and Evacuations,”a 25-page downloadable guide from the U.S. Occupational Safety and Health Administration. It includes important discussions of OSHA requirements for how businesses prepare for and handle emergencies.
• Ready Business Toolkits. These detailed guides from the Federal Emergency Management Agency are available in several disaster-specific versions, including QuakeSmart, Hurricane, Inland Flooding, Power Outage and Severe Wind Tornado. Roughly 50 to 60 pages each, they include risk assessments, planning guides, risk mitigation strategies and checklists to help businesses prepare for emergencies. The website also includes guidance for dealing with active shooters and a litany of other potential emergencies.
• “General Business Preparedness for General, Construction and Maritime Industries,”an OSHA webpage that provides an overview of OSHA requirements for emergency preparedness with links to more detailed information. It also explains the basics of establishing emergency action plans (required of some employers) and provides links to other government resources.
• “Prepare Your Business for an Emergency,” a U.S. Department of Homeland Security webpage with detailed information about planning for emergencies, as well as advice for testing and improving safety programs.
• “Prepare for Emergencies.” This U.S. Small Business Administration webpage provides information on post-disaster loans for small businesses, as well as short checklists and safety tips for natural disasters, including wildfires, earthquakes and floods.
• “Business Casualty, Disaster and Theft Loss Workbook.” Publication 584-B from the IRS is an informational workbook, with schedules, to help you determine your losses on a business in the event of disaster, casualty or theft.
• “Hacked! How Vulnerable Is Your Store to Cyberattacks?” an April 2018 Sleep Savvy article shows you how to protect your business from cyberthreats, and some of the guidance can be applied to coping with power outages and other disasters.