Planning for the train wreck before it happens

Step one after the fire is out or the flood waters have receded (or both) – if you haven’t already done so – is implementing your comeback plan.

Notice that I said implementing the comeback plan, not making it. When times are hectic and the ceiling is dripping with smoky water, your mind isn’t going to be in a place where you can make a solid plan for recovery.

You need to have it roughed out and thought through BEFORE the bad stuff occurs.

Some things, like the references to the tragedy and how you’ll use it specifically in your ads and press releases, will change – but if the plan is in place before your worst nightmare happens you’ll be that much farther ahead and you’ll have a plan made by someone who isn’t fried, tired, ticked off and trying to figure out where next week’s payroll cash will come from.

So what should be in that plan? Here’s a partial list of things to consider…

Important elements of your comeback plan

Get a reward program in place NOW.

This is important to have in place and working well before your disaster so that you know how to contact your BEST customers. The occasional ones might not even notice you were closed for 3 months, but the regulars will and you must be ready to keep them as regulars.

Have a serious conversation about this with yourself, your banker, your insurance agent, your accountant and your attorney.

Now is not the time to find out you would’ve been OK if it wasn’t for that $100,000 deductible and flood exclusion. Pin these folks down. Make them talk about and help you arrange for the ideal recovery (if there is such a thing) in the same location.

Figure out how you’re going to keep your staff.

The *last* thing you need with all this turmoil is to lose your trained people. Make sure that you find a way to involve them in the comeback and do as much as you can to keep paying them, or at least the core players that you’d never want to work for a competitor. Be inventive. Talk to your insurance agent. Do whatever it takes.

Make sure your customer and financial databases are backed up offsite

Backups that sit on a CD or thumb drive that’s sitting on top of your melted computer are pretty worthless. Take a thumb drive home at least weekly, if not daily. Make sure it has your customer and financial databases on it, such as your QuickBooks database.

You can tell QuickBooks to automatically backup your data daily to a certain location. Put your flash drive on your keyring or attached to something else you take home every night. Note: if it’s on your keyring, it might not hurt to use one of those detachable security rings so you don’t lose your keys AND give out your financial data.

One of the biggest reasons that you see businesses fail after a disaster like this is that they don’t have customer records, order records, service records or financial information anymore. If on the day after the disaster you don’t know who owes you money, who has appointments next week and so on – you’ve got a big problem.

Many programs can automatically backup your data, and even send it to a secure backup location.

Communicate with the media and your clients regularly about the progress of your recovery

This is no time to keep secrets. If you will get power tomorrow, let everyone know. Use a blog, press releases and if it merits it, postcards and phone calls (etc) to get the word out.  If you have a problem during the recovery, talk about it. Get people interested in the process so that it becomes “water cooler talk” during the week. Make sure people know that you’re blogging about the experience.

Here’s a great example: http://digmypics.com/recovery/default.aspx

Make it a special event

Dining room closed? Sure, maybe it is, but your parking lot probably isn’t. Throw a block party. Roast hot dogs. Roast a pig. Do whatever it takes to get people to your place of business, even if they have to sit in rented chairs in the parking lot. Just be sure and do it right. Keep them in the habit of coming back, even if the building is a smoldering pile. If they liked you before, give them as many chances to show it as you can.

Go a little crazy

Now is not the time to be boring. The media likes a little eccentricity, so give them what they want…a LITTLE. Funny, silly crazy is fine. Insane asylum crazy is not fine.

If you cook, manufacture, warehouse or store stuff, figure out how that’s going to happen in the weeks immediately after the disaster.

The guy we talked about yesterday managed to arrange for competitors and friends with kitchens so he could continue fulfilling his catering obligations. But what about retail? Don’t make the excuses everyone else would make. Find a way and make it work.

Remember, quitting is the easy thing to do.

Preparing for business disaster: Replacing You.

You may find it uncomfortable to think about this one, and you might even be lazy when it comes to implementing things related to it, but it’s important to do so.

What steps have you taken to deal with something happening to you, or a key employee?

Insurance companies have “Key man coverage” (and yes, I fully realize it is available for women, surely by now you realize that all of the women in my life are key<g>).

Do your key people have key man coverage?

What have you done to prepare your company for the worst?

Would they know where everything is? Are there instructions to help find it?

If it’s a family-owned business, have you talked with your family and put plans in writing for succession?

Are you cross-training other family members, or other employees?

We’ve talked at length about documenting employee processes, but are YOURS documented?

Is there a checklist of things that must be done weekly, monthly, quarterly? For example, are you the only one who knows what EFTPS is? Certainly anyone can pick that up and do it, but if they don’t know they need to…big problem.

Coming in this discussion: technology, marketing to clients who think your biz is toast, what others have experienced and what you can learn from it.

What’s your story regarding business fire or flood disasters?

People are coming out of the woodwork on this one, so I thought I should launch a formal request to contact me with your disaster story and the lessons learned.

Feel free to use the contact page, or comment below. If you want to keep the details anonymous, please say so in your comment and I will read/compile your story but leave the comment unapproved so no one sees it.

As for your story…

  • What happened?
  • What was the impact on your business?
  • How did you recover?
  • What was the most difficult part of the recovery process?
  • What blindsided you (other than the disaster itself)?
  • What did you learn about business insurance coverage that you’d never want anyone else to learn the hard way?
  • What did you learn about your agent, their company and the claims process that you wish you knew before the disaster?
  • How long did it take you to get your business back to where it was before the disaster? (Assuming you have)
  • Did your marketing or promotions take advantage of the disaster?
  • How did your clients react to the disaster and to your recovery process?
  • Did you use public relations or the news media to get the word out, or were you able to contact each customer about the disaster and your recovery plans?
  • Did your competition help you recover, do nothing, or take advantage of your loss? How?
  • What was the key – for your personally – to facing it, brushing yourself off and turning things around?

Thank you:)

What can you learn from a business disaster?

Last week, while I was being a slacker (I was canoeing 50 miles or so around Hungry Horse Reservoir with the troop’s older guys), a friend’s restaurant was struck by lightning.

His business wasn’t physically destroyed, but it did take a pretty serious punch from smoke and water damage. Amazingly, the water damage came from a melted pipe that actually put out the fire and prevented the entire facility from burning to the ground.

Since that Sunday, his restaurant has been closed. Imagine having to close your business with zero notice for 10 days to 2 weeks during the summer – despite having a pile of catering work already scheduled.

Not ideal by anyone’s standards.

I spoke with him yesterday to ask what lessons he would take away from this.

The #1 thing that he felt he would do differently, knowing what he knows now, is to raise the value of his business interruption/overhead coverage so that he could make payroll despite being (mostly) closed and restock all perishable foods (think about what it would cost to restock an empty pantry or fridge…).

He felt confident that his facilities insurance and other coverages were in good shape and would probably take care of cleanup and build out of the damaged areas.

Because he does a lot of catering, he’s had to scramble around to friends who own restaurants or have certified kitchens, and has managed to keep that part of the business alive.

We also brainstormed a little about what to do to move forward and prevent the loss of retail, walk-in customers.

A traditional approach would require cleanup (already in progress), build-out, kitchen recertification and so on.  That could take months. In months, all those retail customers are going to already be in the habit of going somewhere else.

So how do you save them?

We’ll talk about that in coming posts, and lessons business owners have learned from other business disasters as well as strategies for keeping those customers and making sure everyone knows you aren’t going down with one punch.

One thing you should expect right off the bat – if you aren’t collecting the names and contact info for your customers – how will you tell them that you’re still open?

Could you contact your customers tomorrow and tell them that the fire wasn’t that bad and you’ll be back in the saddle in no time?

His loyalty/reward program is one way that will help him do just that. Do you have one in place?