Your business sits on the Gulf of Mexico and provides a spectacular view of the water. A prime location until hurricane season, when you and your company are at the mercy of Mother Nature.
Business insurance will help replace property lost in a natural disaster. But does your company have a plan to help keep your business up and running in the short term?
“A continuity plan’s function is to ensure an organization continues to make money even if there’s some type of disruption to the business,” says Joel Foxworth, Senior Business Relationship Manager and vice president at Wells Fargo in Houston. “The business owner should look at the plan periodically, at least annually, and update it when necessary.”
Smart Business asked Foxworth about how a business owner should develop a plan and who to talk to for guidance.
Are employees more involved these days in the development of a business continuity plan?
I believe so, especially after we saw how much Hurricane Katrina and Hurricane Rita disrupted everything. My office is located 30 miles from the Gulf Coast, and when Hurricane Rita blew in a few years ago, we saw our continuity plan in action. We had hundreds of employees located all over Texas as well as other states and the bank had to figure out how to continue to do business. Our company had a plan in place and was able to take care of everybody. I know from this event that myself and other employees within our organization have become more involved in developing and knowing the current continuity plan.
Can natural disasters be as disruptive to businesses as terrorist attacks?
There’s some similarity between the two in that they continue to affect how business owners are changing the way they do business. I think Sept. 11 was a once-in-a-lifetime event. It was this generation’s Pearl Harbor. It was such a unique time in this country’s history that it would be hard to compare it to a hurricane. Just due to the number of lives lost and the level of tragedy, I don’t think the two could compare.
Who should a business owner talk to about setting up a business continuity plan?
Employers today should receive greater engagement from their employees to help them understand what’s critical and why their companies function the way they do. Every company is going to have a different continuity plan. One company may be heavy on the supply chain and distribution and another may be strictly IT.
Depending on the size of your business you would want to talk to your IT department. If you are a regional or national company, you probably have remote servers and multiple locations where if one went down you would have others that could easily take its place. Your mom-and-pop companies’ IT servers migh be a laptop computer. Everything depends on the scope and size of your business and its function.
Small and mid-sized companies that have an IT department as well as a human resources department need to engage both in the development of a continuity plan as well as your company leaders and executives.
How can a business continuity plan help in the time of a crisis?
When Hurricane Rita hit, it was critical that my clients had my cell phone number since I’m their banker. When power was knocked out in a 100-mile radius, a lot of people needed to be able to get cash to pay contractors. When you don’t have power, you can’t have a security system on, and the bank won’t open its doors to distribute cash unless it has a secured facility. It was critical that we be able to get generators to the banks, to get contracts to the customers and be able to find ways to make cash available to them.
Do businesses of all sizes need to develop a business continuity plan?
I really think all business owners should have some type of game plan so that they can continue to operate in case of a disruption. Three hurricanes in the past few years gave us the precedent that if we should ever have another hurricane or other natural disaster, we have planned for how it would affect our course of action. This year we had Hurricane Humberto form in just 18 hours. It happened so quickly we didn’t have time to evacuate. Overall, in the past five years, we’ve had to evacuate the area on three different occasions. That’s when you need a strong plan in place. <<
JOEL FOXWORTH is Senior Business Relationship Manager and vice president at Wells Fargo. Reach him at (409) 861-6369 or Joel.Foxworth@wellsfargo.com.