June 2008

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Is your business prepared for disaster?

June, 2008

Over the past several years, businesses that couldn't spare the time to prepare for emergencies have learned a tough lesson: floods, fires and other disasters strike when least expected. Some of these companies have closed their doors for good; others will take years to rebuild. Don't let your business become a statistic like one of them.

Here's a short list to help prepare your company for emergencies.

Protect your records. If your business relies on hardcopy and electronic records to run its day-to-day operations, make sure those records are protected. Prioritize files, consider their vulnerability to damage from different types of disasters (earthquake, flood, fire, hurricane), and establish a plan to protect them. This might include raising computers above flood level, storing essential documents off site, and backing up electronic records by uploading them to a secure Internet site. Purchasing a fireproof safe for important hardcopy files, such as written contracts, also makes sense.

Check your insurance coverage. Make sure your business maintains adequate disaster insurance and other types of hazard insurance. Verify with your agent that the coverage is up to date and policy information is readily accessible in case of emergency.

Establish an emergency fund. An emergency fund is commonly recommended for individuals; businesses need one too. It's prudent for companies to maintain an easily accessible account that could cover several months' worth of expenses. If disaster strikes, you may need those funds to keep payroll flowing and ongoing bills current.

Communicate your plan. Let clients, suppliers, and employees know how your company expects to respond when different types of emergencies strike. As a side benefit, apprising them of your disaster preparedness plan will likely increase their confidence in your firm's foresight and ability to manage risk.

Put it in writing. A wise business owner will document the details of his or her strategy for dealing with disasters, and will update that plan regularly. Without a written plan, the stress of immediate needs during a disaster may overwhelm even the best manager. A well-defined disaster preparedness plan can alleviate some of this stress and get the company back on its feet in a timely fashion.

You've worked long and hard to build your firm. Preparing for the possibility of disaster will help ensure that your investment is protected.


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DISCLAIMER: Compass Group and its employees or agents are not in the business of providing tax or legal advice. If legal advice or other expert assistance is required, the services of a person in those professions should be sought. Compass Group, its employees and agents do not make any factual determination as to the validity of any business deduction for tax purposes. Compass Group does not expressly or impliedly endorse, accept, or validate any business record produced by Compass Group on behalf of Client. The Completed Documents produced by Compass Group through this written request are based solely upon the information provided by the client.