Being positive about the unthinkable

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Firms that fail to plan ahead for disasters are leading themselves down the path of planned failure, says Adam Bernstein – because the unexpected always happens

Planning for disasters isn’t much fun. After all, the unthinkable never happens – right? Well, sadly that isn’t always the case, and taking time out from the business could be the best break you’ll ever take.

Now, while we don’t suffer from earthquakes and tsunamis in the UK, we are not immune from other threats. Cast your mind back to 2005 for the Buncefield oil depot explosion and the terrorist attacks in London; the flash floods in Kent this last May; and more recently, the TSB customers who found themselves dealing with the bank’s failed systems and weeks of financial disruption. [wlm_nonmember][…]

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Back in March 2018, the BBC reported that six coaches were destroyed in a large chemical fire at a bus depot run by Fairbrothers Coaches in Cheshire. With six fire engines in attendance there were no suspicious circumstances. While nobody was hurt, neighbouring buildings suffered some fire damage. A spokesman for the firm said other bus operators had ‘rallied together’ to fill in on routes that the destroyed vehicles would have covered.

This fire is a classic example of why you need to plan for disruption. Done correctly, you could put yourself in a position that will strengthen your business compared to your rivals who fail to plan ahead. As the City of York notes on its website: “Disasters have no boundaries, and whether you are a small or large business you may be affected. The main purpose of business continuity is to ensure that the organisation has a response to major disruptions that threaten its survival.”

Understand the business
The first step is to understand your business in terms of the potential threats to its normal operation. With your staff, look at every aspect of the business and think about the people you employ, what you need to operate and how you serve your customers.

Assess the risks
The threats to your business are many and while some of them seem improbable, you should consider them all:

• Natural disasters – flood or wind damage;
• Theft or vandalism – either could prove costly and pose health and safety risks;
• Fire – could physically destroy a business;
• Power cut – computers and other equipment can’t operate;
• Fuel shortages – affects staff and deliveries;
• IT or telecoms system failure – technical issues or malicious activities;
• Restricted access to premises – no access to your depot;
• Loss or illness of key staff – staff resign or are incapacitated;
• Outbreak of disease or infection – staff too unwell to work;
• Crises affecting suppliers – restricted supplies;
• Crises affecting your business’ reputation – poor social media activity leading to public retribution; or a
• Terrorist attack – destroyed premises.
They all sound very improbable, but they have happened.

Develop your strategy and plan
You’ll find that some risks you ignore, others you accept, but you set up a mutual arrangement with a neighbouring firm to help each other out. Alternatively, you may choose to become self-sufficient.

However, when you approach it, ensure the plan is written in plain English so that all can understand it. Guidance on planning is available via free software called Robust, available at:

Build in protection

Contemplate where you can build redundancy into your business without adding too much extra cost. Whilst there’s no point renting a spare building or equipment just in case, knowing where you can rent certain pieces of equipment may save the day.

Equipment – especially IT – can fail. The hard drive in your computer, for example, has a ‘mean time before failure’ rating; in other words, how long it’s expected to operate before it fails. But that doesn’t mean that it won’t fail much sooner. Similarly, an (often automatic) update to the operating system on your computer may cause more problems that it cures. The key to both of these scenarios is to back up your data regularly, at least once a day, and keep the backup offsite and accessible.

Communication is critical to business. This is especially acute if your telephone system is based on VoiP (internet) rather than a traditional line. Plan to use alternatives. Is there someone with a wireless connection with whom you can agree a reciprocal piggyback arrangement if your broadband fails? Consider a 4G dongle or a mobile phone plan that comes with plenty of data. Maybe have phones on two different networks in case one fails.

And if you rely upon key equipment, do you know where you can get repairs or replacements from should they too fail?
Look at scanning and filing documents electronically. Fast double-sided automatic scanners will turn paper into PDF files that can be backed up and placed in a searchable archive on your computer. You’ll also be able to store the originals elsewhere at a less expensive location to further spread the risk of loss.

Despite rising costs, never skip on your insurances. Indeed, make a point of recording when they are due and ensure that you check that they have been paid for even if you are responsible for buying. Don’t forget to note down the policy details and keep them offsite. Apart from the obvious insurance – premises, stock, vehicles, public liability and employers liability – also look at buying:

• Directors and Officers insurance that covers negligence when running a firm;
• Business Interruption insurance that will pay to keep a business alive following a catastrophe (unlike premises and contents which just pays to replace the physical);
• Keyman insurance that provides money following the death of a key person to the surviving business partner(s) to keep the business afloat or to buy out the estate of the deceased;
• Critical Illness Cover that pays out following the diagnosis of defined serious illness that is terminal or life threatening; and
• Permanent Health insurance that pays an income where the insured can no longer work.

It would be a mistake not to mention the regulatory threat through changing legislation, case law and tax policy, any combination of which could impact the business. The forever changing ground of employment law is great case in point. Employees have become more litigious and as discrimination awards have no limit, a good case proven against you could cost thousands. Similarly, ignoring a tax demand from HMRC – even though you consider it pure fantasy – could lead to bankruptcy. You need to keep abreast of all legal changes that may affect the business.

Write policies and risk assess

Having good policies and also risk assessing threats to business will mean not only will you be able to forestall any obvious threats such as simple fire risks or more complex terrorist activity, but they may help you lower your insurance premiums on the basis that you, as a business, present a lower risk to the insurer. For example, by writing a bad weather policy both you and your staff know the effort that is expected when trying to get into work and the pay/leave arrangements for when they fail to get in.

You may consider employee issues such as discrimination, bullying and sickness absence a threat, in which case you should develop policies for those too. The same applies to health and safety issues. A good policy will not necessarily get you out of trouble if an incident occurs, but it will help mitigate any penalties heading your way following an investigation. Of course, do seek legal advice before you put your thoughts into policies that are available for all to read.

Emergency contacts
Draw up a list of emergency contacts that includes key staff, the utilities (water, gas, electricity, telephone and broadband), employment agencies and key suppliers. Work out how you can divert your calls if you cannot access the building to do so. Remember also details of your accountant, solicitor and the tax/VAT office (with your references). Don’t leave out neighbouring businesses in case they need to be informed. Also ensure that you are still able to contact your customers.

Finally, having spent time, effort and money in creating a disaster recovery plan, you need to both test it and keep it up-to-date. Carry out a test without telling anyone that it’s a test. See where – if – the plan falls over.

Ultimately, the threats affecting one business might be quite different for another. But the threats are real and statistically your business runs a one in five chance of something serious going wrong. Make sure it doesn’t happen to you.

The Business Continuity Institute’s Good Practice Guidelines are available at