After the unfortunate string of hurricanes that recently hit key parts of the U.S., thousands have been left affected, including hundreds of businesses in Houston, Southern Florida, and Puerto Rico.
Although acts like these are rare, preparing your business for such disasters could help avoid long-term closures or worse. Should such an event occur again in the future, implementing a corporate disaster plan could be crucial for your company’s recovery.
Creating, documenting, and testing a disaster recovery plan is critical in today’s business world, especially if you want to look for buyers/investors for your firm. More and more professional buyers are adding questions about disaster preparedness to their due diligence checklists. If you come up short on this, or have no plan at all, buyers will be concerned.
The great news is that with some simple planning and organizing, you can create a fairly robust disaster recovery program that will give buyers confidence should a catastrophe strike and, most importantly, protect the company from financial upheaval. Here are some basic guidelines (of course the larger the company, the more sophisticated these steps will become).
First, most importantly, set up a system where your key data from all departments is backed up regularly (daily if possible), and then at least once a week, that back-up data is transferred to an offsite location for safe storage. It is a good idea to use a third-party location for this and ensure that it is several miles (or more) away from your office to safeguard that the back-up facility is far enough away to be protected from what may impact your office.
Secondly, it is a good idea to create a corporate “calling tree” in case disaster is imminent. Again, this can be very basic. Key managers should have home phone numbers and cell numbers for all of their direct reports. In case of an emergency, for example, when the office will be closed, the person at the top of the tree contacts the department heads, who then reach out to all their employees with key information about the pending disaster and steps to take (i.e., staying out of the office). This is a great way to communicate quickly with employees.
If you want to really protect yourself and your business, you can actually contract with companies that specialize in creating back-up locations where employees can gather if the office is shut down for an extended period of time. Although this can be expensive, having a separate facility some miles away can be a great way to ensure that your business has continuity.
Since most businesses cannot afford to maintain a backup location, another great idea is to allow associates to work from home (assuming that their homes are safe) during and after a disaster occurs. This is a great idea to pursue because today the technology exists where you can have nearly 100% of your workforce “virtual” for a short period of time in case the office is shutdown or impossible to reach.
Most importantly, no matter how simple or sophisticated your plan is, it is vital to TEST it. Just because it looks great on paper does not mean it will actually work. The only way to be ready for a disaster is to prepare and work the plan in advance. Not only will this allow your associates to understand how the strategy is supposed to work, it will also allow you to determine where your gaps are in the plan. Odds are good that when you test it, you will find that you completely forgot something in your disaster recovery.
Again, these are just some simple ideas that you can implement in advance of any catastrophe occurring in your area. Granted, no plan is perfect and as we have seen, Mother Nature can be quite powerful and damaging. However, when it comes to talking to buyers, having a plan in place to discuss during due diligence can make a huge difference in how they view your company (and how they structure your deal).
Keep in mind that the one common issue that all buyers share is this: a fear of risk and uncertainty. If both are present in a transaction, they will factor it into their pricing model either by reducing what they will pay or requiring you to stay on for a number of years under an earn-out so some of these details can be addressed. It’s far better to create something in advance than be required to as part of the transaction.
If you would like some sources to give you more ideas on creating a disaster plan, use these links:
And if you are interested in learning more about how buyers view risk & uncertainty and how you can better position your company for due diligence, attend one of our complimentary exit planning conferences. An investment of a few hours of your time could pay off handsomely down the road, as you will learn how to prep your company to be “buyer ready.” To learn more call us at 972-232-1121 or visit our website and provide us with your contact information.
No matter what, be sure to take the time in advance to better prepare your company and your staff for any emergency that might arise. Doing so will ensure that your business can better survive whatever nature throws at you.
Carl Doerksen is the Director of Corporate Development at Generational Equity.
© 2017 Generational Equity, LLC. All Rights Reserved.
it all started with a conference.
start your story today,
speak directly with one of our senior advisors +1-972-232-1121
The information we learn from customers helps us personalize and continually improve your experience. Here are the types of information we gather.
We receive and store any information you enter on our Web site or give us in any other way. We do not sell or rent your personal information to others without your consent. We use the information we collect only for the purposes sending promotional information, enhancing the operation of our site, serving advertisements, for statistical purposes and to administer our systems. We DO NOT use third parties to provide customer service, to serve site content, to serve the advertisements you see on our site, to conduct surveys, to help administer promotional emails, or to administer drawings or contests, but reserve the right to do so in the future without advance notice.
Generational Group’s affiliates are all part of one corporate family, they work with one another and may work together to provide services to you. The sharing of your information among affiliates enables Generational Group to serve you more efficiently and makes it more convenient for you to do business with Generational Group. Generational Group is permitted by law to share information with its affiliates. All of our affiliates follow similar privacy policies.
For reasons such as improving personalization of our service, we might receive information about you from other sources and add it to our account information.
Generational Group may license the use of its intellectual property including but not limited to its name, likeness, and logo for the use of affiliated offices. Such affiliated offices may not be owned, controlled, managed, supervised or staffed by employees, officers, or agents of Generational Group. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Group at its office in Dallas, Texas.
This page may contain other proprietary notices and copyright information, the terms of which must be observed and followed.
Information on this web site may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Group may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Group does not want to receive confidential or proprietary information from you through our web site. Please note that any information or material sent to Generational Group will be deemed NOT to be confidential. By sending Generational Group any information or material, you grant Generational Group an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Group is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Our computer system protects personal information using advanced firewall technology.
Information Generational Group publishes on the World Wide Web may contain references or cross references to other products, programs and services that are not announced or available in your country. Such references do not imply that Generational Group intends to announce such products, programs or services in your country. Consult a Generational Group representative for information regarding the products, programs and services which may be available to you.
Generational Group makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Group web site, please understand that it is independent from Generational Group, and that Generational Group has no control over the content on that web site. In addition, a link to a non-Generational Group web site does not mean that Generational Group endorses or accepts any responsibility for the content, or the use, of such web site. It is up to you to take precautions to ensure that whatever you select for your use is free of such items as viruses, worms, Trojan horses and other items of a destructive nature.
IN NO EVENT WILL Generational Group BE LIABLE TO ANY PARTY OR ANY DIRECT, INDIRECT, SPECIAL OR OTHER CONSEQUENTIAL DAMAGES FOR ANY USE OF THIS WEBSITE, OR ON ANY OTHER HYPERLINKED WEBSITE, INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF PROGRAMS OR OTHER DATA ON YOUR INFORMATION HANDLING SYSTEM OR OTHERWISE, EVEN IF WE ARE EXPRESSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Furthermore, all information contained within this website is the property of Generational Group.
Success, you have been added to our list.