Plan B
In action movies, when the hero is thwarted by a situation, they employ Plan B to ultimately save the day. Business owners need to be able to do the same to maintain profitability and ensure sustainability of their company. Hurricane Dorian has shown some business owners the value of such a plan, and has shown others the need for one.
Unlike those in areas in the U.S. where Hurricane Dorian had significant impacts, and certainly for the Bahamas, most businesses in Florida were not affected by the storm. However, some were; those in areas that were evacuated as a precaution; those that performed work that involved the building, like installing skylights, solar pool heating, or involved alterations to the structure, and; those that performed work inside the building that was cancelled or rescheduled because the homeowners chose to leave the area to avoid the storm.
Businesses that did not have a “Plan B” as a component of their emergency operations plan (‘disaster plan’) or did not have a plan at all suffered a worse loss of profits than those with a Plan B. Business owners need to consider how their company could function during an extended period without one or more of the inputs needed to operate. These inputs include: access to the premises, functioning utilities, ability of vendors to deliver, customer willingness to use the product or service, employee’s ability to get to work, and more.
Lack of access to the premises could be due to mandatory evacuation of an area, a vehicle crashing into the business, blocked entrances due to emergency construction like a broken water main, or damage to the premises themselves by fire, weather, or structural issues. If any of the preceding happened to a key vendor’s premises, they might not be able to deliver. Customers fearing a potential storm might postpone work on their house or business structure or may leave the area and cancel any work inside the home. Any number of issues could prevent employee’s ability to get to work including the need to stay home with children due to an unplanned school closure.
The response options in Plan B will vary with the type of business and the nature and duration of the interruption. Here are some examples from businesses I have worked with:
A few years ago, when there was a fear of a bird flu pandemic potentially closing schools and limiting public access to businesses, a bank developed a plan to provide expanded ATM access and online banking to all customers in the event that they had to close premised due to an insufficient number of tellers being available.
Both a print shop and a dry cleaner made mutual arrangements with a similar business two counties away to use the other’s shop after hours to produce work for their own customers.
A local newspaper made a similar agreement with another in a different county and each used that arrangement several times a year when their presses broke down.
A retail store planned pop-up stores in the mall and at a major flea market.
A home renovation business made a mutual agreement with a distant one to perform work as a subcontractor in the event that their business was impacted by an event.
Several restaurants and caterers planned to use each other’s kitchens, and in the event only the dining area was closed, some of the restaurants had a standby delivery service ready to implement.
As you can see, the options are only limited by the ingenuity of the business owner. The other ingredients for a workable Plan B are available cash or a credit line equal to one month’s expenses and having all important information available from anywhere by being in the cloud.
When I teach emergency operations planning, I begin by having attendees imagine that they are in their place of business when a policeman or fireman comes in and tells everybody to leave immediately without going back for any records, laptops, phones, or purses. He or she says this is due to a gas leak and tells everybody to walk swiftly to the end of the street. As everybody arrives at the gathering point an explosion is heard and there is a crater where the business was. I ask:
Can you account for all the employees and customers who were in the business?
Do you know your insurance company, agent and policy number?
Can you contact your customers? How will you serve them while the premises are rebuilt?
Do you know who your vendors are? Can you tell them where to deliver in the interim?
Is your alternate location ready to use?
Will your banking transactions continue seamlessly?
How will you notify the media about what customers and vendors can expect?
If you had a Plan B, answers to above would be ready to implement.
by Dr. Phil Geist, Area Director, Florida SBDC at UNF
