Small companies may need plan for harder times
By Steven E. Bryant | A Bloomington voice
March 23, 2012
By now we have all heard about and seen footage of the damage in several southern Indiana and Midwestern communities from tornados. Several communities have experienced total devastation of homes, schools, government buildings and businesses of all kinds. It will take time and resources to rebuild, and it is gratifying to see so many people giving time, money and goods to help the victims through a truly difficult time in their lives. This got me thinking of small businesses that have been impacted and how they deal with the effects of a disastrous event such as a tornado, fire or other natural disaster. Turns out, according to the Small Business Administration, somewhere between 25 percent and 45 percent of all small businesses do not reopen after a devastating event.
So, what can we learn from those who have been through these types of situations so we can better prepare small businesses for sustainability? Well, one of the first courses of action is to develop a Business Continuity Plan (BCP). You can Google many templates on the Internet, but the BCP is essentially a document that walks through the important procedures used in case of a disaster. Businesses in regulated industries are required to have a BCP, and small businesses can benefit from the types of questions entertained in the BCP.
A few examples of questions include: Do you have copies of vital company documents, do you have adequate data backup for computer systems, how quickly can we recover and serve our customers, do you have a temporary location to do business in case of disaster, is there cash flow to survive several months while the business rebuilds? These are all critical questions that all small business owners need to discuss.
The business should also have a plan for succession in case of death or disabling condition for the owner/operator. Who steps in to run it? Do they have the skills needed to keep it going? Is there a family member or business partner who can handle essential management roles? Can your insurance agent, banker and other vendors assist in key areas? These are the types of important questions for all small business owners to be asking every day. Think about the small hair salon, diner or retail shop. Can they survive when customers cannot get to them because of the blocked roads, cleanup efforts and restrictions due to possible looting? These are scary, but real, business scenarios that many communities are dealing with today due to the tornado damage a few weeks ago. Preparation and planning are key to keep your small business going through the toughest of times. Talk to your insurance agent, banker and vendors about these issues from time to time and you’ll be better off when things go wrong.
Steven E. Bryant is executive director of the Gayle and Bill Cook Center for Entrepreneurship at Ivy Tech Community College — Bloomington. Next week, Talisha Coppock with Downtown Bloomington Inc. will share her thoughts.
Copyright: HeraldTimesOnline.com 2012
About Ivy Tech Community College
Ivy Tech Community College is Indiana's largest public postsecondary institution and the nation's largest singly accredited statewide community college system, accredited by the Higher Learning Commission. Ivy Tech has campuses throughout Indiana and also serves thousands of students annually online. It serves as the state's engine of workforce development, offering associate degrees, long- and short-term certificate programs, industry certifications, and training that aligns with the needs of the community. The College provides a seamless transfer to other colleges and universities in Indiana, as well as out of state, for a more affordable route to a bachelor's degree.