As a Northwest Florida business, you are certainly aware of the threats of hurricanes. If you experienced any of the hurricanes that affected our region in the past few years, you may still be recovering. At the least, you are well aware of the difficulty of coping with and maintaining a profit during such a terrible experience. But did you realize there are many more business disasters that are actually more common and are much more likely to affect your business in some way? That doesn’t discount the importance of planning for hurricanes; it just reiterates the importance of disaster planning as a whole!

• When Carl and Kate started their mortgage business in 2003, they never imagined that two hurricanes and an economic downturn would trump 30 years experience in the mortgage industry, devouring 30 years of hard‐earned equity during the struggle.

• When Bobby hired Laurel in 1988, he never imagined that by 2008, Laurel would have embezzled more than $200,000 of company deposits that should have been sent to the IRS for employee tax payments. But as Bobby’s automotive repair business became more and more successful, he got caught up in the urgent demands of running his business. Bobby relied more on Laurel’s financial expertise, as well as the trust that comes from 20 years of working with an employee day after day. Unfortunately for Bobby, it also meant nearly losing his business.

• When John planned to turn over his successful high‐end furniture manufacturing firm to his only child, he never imagined that his son would die at age 39 in a tragic sporting accident, leaving no other family members who were prepared to replace the aging executive.

Each of these situations can be described as a business disaster: any occurrence that causes a potential financial loss or closing of your business. For example, the most commonly occurring natural disaster is a power outage. Sound ridiculous? Well, in fact, a power outage can necessitate the temporary closing of your business; obviously computerized point‐of‐sale equipment can’t be used during a power outage. A power outage can even cause permanent damage to computer or electrical equipment and the possible loss of important records, data, and files. However, it is also one event that you can easily plan for.

Other disasters are just as common and result in the closing of thousands of businesses a year. In fact, according to the Small Business Administration, 42% of businesses who close for any reason never reopen. Disasters can include those that affect your physical place of business, such as fires, broken pipes, or even something as simple as road construction that cuts off the entrance to your business. Many business owners, like Carl and Kate, are reeling from the effects of the current economic downturn, whether from a decrease in profit or the inability to access emergency financing. Even more common disasters are the illness or injury of a key employee or partner, such as John experienced, or unethical behavior by a trusted employee or associate, which almost cost Bobby his business. No business owner ever expects to be sued or forced to take a client to court, but court battles can be costly, time consuming, and distracting at the very least, and, at the worst, can force a business to close.

The purpose of this article isn’t to discourage you or cause you to wonder whether your business has any chance of succeeding. The purpose is to encourage you to look at the value of continuity planning along with your overall business planning to create a sustainable business. What is business continuity planning? It is an important aspect of business planning that enables a business to continue operating through any type of disaster. The good news is that several organizations have created free planning tools to help you better face every possible scenario in an uncertain environment. As I’ve heard one of our local SBDC business counselors say, “Any business that fails to plan, plans to fail!”

Articles and links on the BIC website look at a number of issues related to business continuity. These articles and links, related to disaster planning, may give you valuable insight on planning your business future:

Business Disaster Planning

Business Succession

Financial Protection

Insurance

Legal Assistance