Disaster Preparation

Administration

You need systems to save data so that, in the event of a disaster, you have the information you need to continue running your business. Consultant Melanie Hodgdon, president of Business Systems Management, in Bristol, Maine, helps remodelers create and manage financial and business systems. Here are some of her recommendations for small companies that lack an in-house information technology person to handle computers and network safety:

1. Whether you have a stand-alone computer or one that is part of a network, use an external hard drive for all data files. Load your software (such as Microsoft Word, Excel, Act!, accounting software, etc.) on your internal (C:) drive, and store your files on the external hard drive.

2. When organizing files on the external hard drive, use folders to discriminate between critical and noncritical files. Hodgdon says she has a folder on her external hard drive labeled "Master," and inside that folder are two folders labeled "Critical Files" and "Noncritical Files." She says that since you can stipulate what you want automatically backed up, this helps streamline the backup process.

3. Every Friday afternoon, Hodgdon also copies the "Critical Files" folder to a second portable hard drive. She says that another option would be to automate this using a Web-based backup system, although for companies electing to turn off their computers every night, this doesn't work. Always retain the contents of the "Critical Files" folder on the portable drive by renaming it "Critical Files-Old" prior to copying the current week's work. Once the current week's "Critical Files" are copied, delete the "Critical Files-Old" from the prior week.

4. Back up accounting software each day. Hodgdon uses a flash drive for this and advises that you should rename each day's data so that you're not constantly overwriting the same file, which can lead to data corruption and deny access to a "historical" series of backups. If you have a major issue, a backup file from last Wednesday might be just what you need to reconstruct what happened.

5. If the backups all reside in the office and the office is vandalized, burned, or flooded, that information could be unsalvageable. Remove backups from the premises, whether by using an online system or by physically removing the flash drive from the office.

6. Fireproof safes protect paperwork, but might not prevent damage to a hard drive or flash drive. Information on those drives is laid down magnetically, so relatively small temperature fluctuations can corrupt them.

7. Create backup processes that are easy to use. If they are complicated or time-consuming, you and your employees will avoid following them.

8. Regularly test your backup systems. Many people find out too late that their system for accessing a single document from a "batch backup" wasn't working or required such digging that it was hardly worthwhile. Schools practice fire drills, boaters have man-overboard drills, so why not have a "the office burned to the ground last night so let's see what we can salvage from our backup system" drill?

9. When you have a separate external drive for file storage, if/when your computer crashes, instead of having to deal with backups, you simply unplug your external drive and plug it into a replacement computer (even a leased machine if need be). You will still have to install any software, but your data will be intact. If you're operating in a network environment and are using the external drive on a file server, all other computers should be mapped to the external drive. When you move the external drive to a new computer, unless the replacement computer is given the same identification as the old, you'll have to go back and re-map the other machines. Still, it's a lot faster than either trying to retrieve data from a dead machine or pulling in data from backup.

Staffing

During the 50 years that Hubert Whitlock Builders in Charlotte, N.C., has been in business, the company has learned to be prepared for staffing issues. Vice president Tyler Mahan says one thing they have learned is to cross-train employees. Mahan offers this perspective:

A lengthy, unscheduled leave of absence for a project manager can be a possible disaster on a large project. We want our client to view our operation as seamless by staying on schedule and providing them with great service. This helps us stay on track with projects when employees are on vacation or are ill. We have a project manager for most projects, and then we have another project manager who is working on other jobs also follow and review that project.

On larger, more detailed projects, it’s usually the assistant who is there every day and who is trained and can step up to a primary role if needed. It’s part of our training program for field staff. We also cross-train our office staff. My title is vice president of production, but I have an assistant production manager who is familiar with what I do. When I go on vacation, I feel very comfortable that he is prepared to handle situations that come up and run the department in my absence.

We were glad that we had this system in place when, seven years ago, we had a project manager who had a horse riding accident over the weekend and was in the hospital in a coma. The assistant project manager had developed a relationship with the clients and was familiar with the details of the two renovations the project manager was running. The clients were very comforted by the familiarity with the assistant and the projects went well considering the circumstances. We were able to deal with our grief and the grief of the client. It was a terrible accident that the employee never recovered from. He passed away after several weeks, but the company rallied around a very difficult situation and proved that teamwork is very important. As much positive came out of that situation as we ever could have hoped for.

Insurance

Frank Nemshick, president of Accord Restoration, in Baltimore, is called on to respond to different types of emergencies for residential and commercial clients. The company’s 40 employees and trade contractors respond immediately with mitigation work to secure the building, and then estimate the cost of returning it to pre-loss condition.

"Whether it’s a homeowner or business owner, many times I find situations where people are not adequately insured," he says. "It’s hard enough to run a business with everyday operations, but a catastrophe can be fatal to the survival of your business," Nemshick says. This is especially true for small businesses that have tight cash flow under normal circumstances, let alone during a disaster.

The subject was brought home recently when a fire occurred in the office building where Nemshick rents space. Of the six tenants, he says, Accord Restoration was the only business that was properly insured. He says that business owners should speak to their insurance agents about five major areas of coverage: structure, liability, contents and equipment, additional expense, and loss of income. Nemshick says that anytime he discusses insurance changes with his agent, he sends a registered letter to the company to confirm the additional coverage he has purchased. He offers this description of the five coverage areas:

1. Structure: If you are leasing your office or renting, read your lease, don’t just sign it. Find out what is your responsibility in the event of an emergency. You might be responsible for inside building materials until you vacate the building, so you need betterments and improvements insurance. If the building owner is only responsible for the shell of the building, you need insurance coverage to pay for the interior restoration. Also check the lease to see if you have to pay rent during the remodel. If not, speak to your agent about including this in your policy.

2.Liability insurance: Most companies have this coverage. Make sure you know what the liability covers. Nemshick says you could add an umbrella to extend your existing coverage.

3.Contents and equipment coverage: Many tenants in Nemshick’s building did not have contents insurance to cover their equipment. Find out from your agent if specific items over a certain cost are covered or if you need separate insurance for that equipment. For example, any one piece of equipment worth more than $1,000 needs to be scheduled on a list and filed with your insurance company. You need money to replace that item in today’s dollars. If you bought it for $200 three years ago and it now costs $400, you need that coverage.

4.Additional expense: If you have a loss that prevents you from returning to your office, additional expense coverage pays for your move to and rental of a temporary office. It usually covers anything over and above the regular expense of running your business. This coverage should also pay for recovering and or duplicating your backup files and may cover the cost of immediate rental of an office trailer to keep on site. To figure out this coverage, provide your agent with the cost of six to 12 months of your rent and utilities.

5. Loss of income: If you have a loss and your operations cease, Nemshick says, you will lose income. If you include this type of insurance in your coverage, you’d be able to have income to keep the company going. The insurance company usually brings in an accountant to review your finances to determine the amount.

Public Relations

Another aspect of dealing with an emergency or trauma is handling the media and public relations. In her book, PR Power Public Relations for Building Pros, public relations consultant Kathy Ziprik advises companies about dealing with a crisis. She says that builders can be faced with crises such as a fire on a building site, an employee accident, product issues, weather-related damage, disgruntled employees, etc. And that all building companies should have a documented plan for these types of issues. These tips are from Chapter 9: Planning for a Crisis:

• Having a well-practiced crisis plan in place allows you and your management team to have some level of control over the results of a crisis. In the face of a tragedy, a crisis plan acts as a security blanket of knowledge, giving you the confidence to work through emotions, confusion, and an extraordinarily difficult situation.
• Designate a spokesperson. During a crisis situation, the credibility of your company may be at stake. It is extremely important that the top-ranking person at your company serve as the spokesperson during a crisis. A crisis situation is not the time to practice at being a spokesperson. Make sure to prepare, train, and rehearse the spokesperson or team.
• Distancing the company from the situation and saying "no comment" are two of the most dangerous reactions a company can have to a crisis. This is the time for builders to put a human face on their company, to express their compassion and concern over the crisis situation.

Tips for media interviews:

• Tell the reporter you will call back in 15 minutes, and use the time to get prepared for his/her questions.
• Return the reporter’s call within the timeframe you promised
• Be quotable for the reporter
• Use the interview as an opportunity to meet your agenda and put forth your important points, not just answer the reporter’s questions.
• Speak clearly and plainly. Eliminate industry jargon.
• Be honest and open. If you don’t know the answer to something, tell the reporter.
• Stay in control of the interview.
• Ask the reporter to call you back to confirm your quoted comments.

More Information

The Internal Revenue Service provides tips for small businesses on preparing for disaster. For a story on this information and a link to the IRS site, go to the story Disaster-Planning Tips