Amanda Gonzalez Article

Floods, Hail and Heat waves are everywhere:

What can I do today to protect my business?

Natural hazards (often sinisterly referred to as perils) present a unique challenge to businesses of all sizes.  Even though you cannot control when or where they will occur or how severe they will be, it does not mean you are powerless to affect the potential impact such events can have on your business.  As a business owner, it can be overwhelming to have yet another thing to think about and plan for, but you don’t have to throw up your hands and wait and accept defeat.

Here are a few key things you can do today to be better aware of and prepared for natural hazards (and a lot of other potential risks to your business, as well):

Understand what is important to your business – You may be asking how this is relevant, but it is easy to get sidetracked by the many types of risks you hear about on the news, on social media, from your peers, etc. By being clear and staying focused on things that are important to your business, you can spend your valuable time, energy, and money on the things that have the most positive impact.

    • What do you need to keep these things going….
      • People with specific skills or abilities?
      • Electrical Power and Alternative Sources?
      • Raw materials?
      • IT systems and data?
      • Trucks/Transportation?
      • Shipping lanes/ports?
      • Cash?
    • Where are all these things located?
    • How long can you tolerate being without one or more of these things?
  • What operations, activities, products, and customers are critical to achieving your business goals?
  • Understand your current status – You may find that you are already more prepared than you are aware. You may simply need to connect a few dots.  But until you understand what you have, you cannot decide what else you might need.
    • What do you already have in place for any of the above scenarios?
    • Have you used/tested these procedures?
    • Have you been through something in the past that you can review and learn from?
    • Develop an “early warning” system – This can be physical or virtual, but having means of being notified when there is potential for severe weather, flooding, high winds, cold snaps, etc., to impact your operations, employees, suppliers or customer can give you the precious days, hours or minutes to enact the response procedures that may significantly reduce or eliminate the impact to your business.  There are many services available (NOAA, NWS, FEMA, etc.) that can provide warning notices free of charge.  There are also services available that do this on your behalf for a fee (this is more appropriate if you have a large, complex supply chain).
    • Know your insurance – While insurance doesn’t prevent a natural disaster from occurring, having [the right] insurance can be the difference between surviving one and closing your business.  You do not want to learn how your coverage works during or after a disaster.
      • Ask your agent or broker what types of natural hazards you (and your suppliers) are exposed to.
      • Ask them how your insurance will respond if any of those scenarios occur.
      • If they can’t answer these questions; find an agent or broker who can.
      • Document and communicate what you learn.
      • This doesn’t need to be fancy or detailed (in fact, I recommend keeping it simple and aligned with your internal style of documentation).
      • Find a way to memorialize what you learned through the above activities so that all the right people know, understand, and can act on whatever plan you have in place.
    • Practice – Don’t overthink this, “Just do it!”
      • Documentation is great, but people forget.  Get your leadership team together for an hour once a month or quarter and set the stage:
        • “A big storm came through, the power is out, the internet is down, roads are icy, people can’t get to work, etc.”
      • Then, start asking hard questions, such as:
        • Do our employees/contractors/customers know what to do?  How will we communicate with them? Who will communicate with them?
        • When did we last test the emergency generators?  How much fuel do we have, how long can they run?  What do they power?
        • Do we have contracts in place with the suppliers/vendors we say we will rely on in this emergency/crisis?
        • Do we have an inventory backup?  How much?  Where is it? Who knows this?
    • Leverage your team – As a business leader, you are likely accustomed to wearing many hats and making many (maybe all) of the decisions.
      • Your business is successful because of the amazing people working for you.
      • Dive down into your organization.  Ask others these questions.
      • Ask them what they would do if any of these critical things were interrupted.
        • “I have seen shocking – and amazing – insights and actions come about by asking different leaders the questions posed above.”
    • Rinse and repeat – While doing this once is valuable, to remain prepared, you must make this an ongoing process of understanding and managing your business.

You will find that as you do the above more and more, it will become easier, less time-consuming, and make your decision-making processes more streamlined with your strategic objectives.

BONUS:  We focused the above context on preparing for natural disasters, but…. surprise…by doing these things, you will find yourself better prepared for many other potential impacts onw your business.