FIRE GUTS IDAHO SPRINGS COMPLEX
An overnight fire gutted a main street Idaho Springs business complex Friday, displacing eight shops and sending community leaders scrambling to find ways to help.The blaze destroyed the building’s top floor and collapsed the roof. The first floor suffered heavy smoke and water damage. The fire displaced eight businesses, including a chiropractor, a dentist, the eye care center, and accountant’s office and a salon.
(Denver Post, Sunday, February 23, 2003)
As a business person, what would happen to your livelihood if you were notified at 3:00 AM that your business was in the process of being destroyed? Many questions could arise. Where will I find another office suite? How am I going to reconstruct my records? How will I know what amounts of money I am owed by my customers? Am I faced with possible legal action because of losing company and customers’ records?
This is not a dilemma to be swept aside without concern. It certainly can’t be corrected with medication or another cup of coffee. Then the reality sets in and you start to question your actions. What could I have done to alleviate some of these problems?
Protecting Your Business
Let’s take a look at some cost-effective measures that could be taken to counter some of the problems that will be encountered if you suffer a fire or other catastrophe at your business. It is a fact that large business corporations normally have a comprehensive business continuity plan, usually at a significant expense but within the capability of “big” business. The small business cannot afford a continuity plan of big business magnitude. However, other measures may be taken that are within the financial capability of smaller businesses.
When considering if it is necessary to plan for a catastrophic event, remember that unless you can return to an operational status within a short period of time, your customers must continue with their businesses and will find other suppliers of products and services. Unnecessary delay equals loss of customer sales equals failure of your business and financial disaster for you and your employees.
One of the most essential segments of recovery and return to business is having operational and business information available. While we normally think of safeguarding information by backing up the information on computers, frequently little thought is given to storing duplicate information where it can be readily obtained. Storing the duplicate information within the business is an invitation to disaster. The fire or other event that destroys the computer will destroy all data stored in the same location. Instead of placing the back-up disks in a desk, why not store them in a bank safe deposit box or even another secure location, such as the owner’s home? Computer records should be backed up daily but not less than on a weekly basis.
Some vital business records should be stored in fireproof containers, or better yet, a bank safe deposit box. These records are normally those that cannot be reproduced quickly from other sources. A fireproof safe or cabinet will protect documents for a designated period of time but for various reasons, you may not be able to access the information on a timely basis. For example: the structure is declared to be temporarily unsafe by safety officials.
Some Examples of Vital Records1
| *Accounts Receivable Audits Bank Deposit Data Capital Assets List Charters and Franchises Incorporation Certificates Insurance Policies Inventory Lists Leases Legal Documents Licenses *Manufacturing Process Data Minutes of Directors’ Meetings Notes Receivable Patent and Copyright Authorizations *Payroll and Personnel Data Pension Data |
Constitutions and Bylaws Contracts *Customer Data Debentures and Bonds *Engineering Data General Ledgers Purchase Orders Plans: Floor, Building, etc. Receipts of Payment Sales Data Stockholders’ Lists Stock Transfer Books Tax Records Service Records and Manuals Social Security Receipts Statistical and Operations Data Stock Certificates |
Your unique business structure and requirements will dictate the types of vital records to be protected. Some of these records could be reconstructed from other sources, but the amount of time required to do so could result in additional loss or even permanent dissolution of your business.Have you ever taken the time to look at your business procedures and identify the number of vital records that are stored on paper and are not part of your computerized records? Could you survive without these paper records? While it is not always necessary to have on hand duplicate copies of operational records, manuals and documents, it is wise to identify the necessary items and where they could be obtained on a timely basis. For example: if you owned an auto parts supply store, where could you quickly get copies of parts catalogs? In some cases, you may be able to get them from another of your stores, a competitor or parts supplier.Do you have an inventory of products or supplies to assist in restocking activities? Where can you obtain these items for a reasonable cost? The cost of priority shipping will increase your losses. Have you ever considered a mutual aid or assistance agreement with similar company? By agreement, there could be an inter-company loan of equipment and supplies to provide a quick return to business while waiting for shipments being delayed for various reasons. Yes, there is competition between similar businesses but sometime the business competitive spirit should be reduced or ignored for the overall benefit of each party.
Do you have an asset list to identify what you will need to return to business? An emergency is not the time to get your employees together and attempt to identify the property needed to get back in business. If you have a listing, even if it is not totally complete, you can go to a supplier with a list of needs to meet your immediate requirements. Because of volume purchasing, you may be able to negotiate a better price. Going to a supplier on a frequent basis to get one or two items needed for a current project is time consuming and not cost effective.
Videotaping each area of your business can develop a simple asset listing. It is equally important to videotape the interior of storage containers to identify contents. Fixed asset and inventory listings are vital to recover from your insurance provider. Not only does it give you quantifiable data but also the videotape proves that you in fact had certain items.
What plans have you made for your employees and staff during the recovery period? What do you expect them to do? How do you intend to pay them? Your most important asset is the employee. Not only do they accomplish specific tasks within your business operation but also they are an extremely valuable source of expertise and information. They know “how” your business actually operates, frequently better than you do. Do you want to let them get away to one of your competitors? Remember they also know your business secrets!
Summary
Prior planning is essential to business survival. The above does not include all possible planning considerations. They are provided for the purpose of inspiring the business owner to consider what could happen following a catastrophic event, whether it is caused by fire, flood, or tornado.
While you may reasonably control your business environment, Mother Nature is very hard to control. When you share a facility with other businesses, you are subject to the disasters that affect them. Fire, in particular, is capricious in nature. Even through your business may not be directly affected by a catastrophe, emergency services personnel may not allow you to enter the premises. A good example is when a multiple occupancy building is declared unsafe for entry and requires immediate and total destruction.
Remember–prior planning may possibly prevent financial disaster! A dollar spent now, either in time or money, can save that amount many times over at a later date.
1 Protection of Assets Manual, Page 10-16, POA Publishing, LLC, Los Angeles, CA