Catastrophes Kill 220,000, Cost $200 Billion in 2008

More than 220,000 people lost their lives in natural catastrophes in 2008. Economic losses totaled $200 billion. Contributing factors included China's earthquake; severe winter storms in Europe and China; 1,700 tornadoes and six named storms in the US.

Asia was the hardest hit region in loss of life. Cyclone Nargis, which struck Myanmar, claimed 135,000 lives. Another 88,000 were killed in the Chinese province earthquake.

Hurricanes Ike and Gustav were the most expensive events for insurers in 2008, according to figures in a Munich Re Group report. Insurers paid out $20 billion, which is estimated to be half of the price tag in total losses. Ike accounted for $15 billion in damages while Gustav racked up $5 billion.

Stumble It!

Half of States Ill-Prepared

Half of the healthcare systems are ill-prepared for a major disaster, according to a recent report titled “Ready or Not? Protecting the Public’s Health from Diseases, Disasters, and Bioterrorism.”

The annual report examines and scores healthcare systems’ ability to effectively handle mass casualties following natural and man-made disasters. Scores are based on ten key factors on a state-by-state basis.

Best and Worst

Five states achieved a 10 of 10:

• Louisiana
• New Hampshire
• North Carolina
• Virginia, and
• Wisconsin

Six states scored five out of 10:

• Arizona
• Connecticut
• Florida
• Maryland
• Montana, and
• Nebraska

The report identifies several reasons for the lack of preparedness. Budget cuts, lack of modernization in key areas, gaps in disease detection, poor vaccine and medication distribution, and lacking surge capacity contribute to poor performance in many states.

Key Recommendations

The authors offered several recommendations to close the gaps:

• Restore funding to fiscal year 2005 levels
• Improve leadership and accountability at the federal level
• Enhance surge capacity
• Modernize equipment and technology
• Encourage community engagement
• Incorporate preparedness into healthcare reform

The report authors argue that “prevention, preparedness, and public health are vital to the well-being of families, communities, workplace productivity, U.S. competitiveness, and national security. The incoming Obama administration and the 111th Congress should make protecting the health of all Americans a priority.”

What's Your Experience

Although my state, Louisiana, earned a 10 out of 10 score, I would beg to differ on the state’s healtcare preparedness. Hurricane Gustav knocked out several of the major hospitals in Baton Rouge for at least a few days. One such institution remained closed for more than a month due to a destroyed power grid. Fortunately, it was not a mass casualty event that required a large surge capacity. But what if it had?

How did your state rank? Read the report and comment here.

Winter Virus Wreaking Havoc

A winter vomiting bug called Norovirus is sweeping through Britain at an alarming rate. According to a BBC news report, victims with diarrhea and vomiting are going to hospitals and infecting the staff and other patients with the highly contagious virus.

Hospital wards are being shut down because of the impact. With only a few exceptions, authorities are telling victims to stay away until they are symptom-free for at least 48 hours in an effort to control the spread. Schools and businesses are also being affected by the bug.

The virus has been confirmed in the United States as well. Kalamazoo, MI officials said lab tests confirmed the norovirus was responsible for closing the Washington Writer's Academy for two days this month. Cases have also been reported in Maryland, Indiana, Montana and elsewhere.

Authorities say washing hands goes a long way to prevent the disease. However, once infected, the illness runs its course in 1-2 days.


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8 Suspicious Letters Sent to Governors

The FBI is investigating suspicious letters with white powder sent to at least eight governors around the country. The substance has been field screened and preliminarily judged harmless in seven of the eight mailings. Alaska had not yet finished it's preliminary screening. Further tests are being conducted on all eight letters.

Postmarked from Dallas, Texas, the letters were mailed to governors in Rhode Island, Michigan, Mississippi, Alabama, Minnesota, Montana, Missouri, and Alaska. Apparently, the culprit does not follow politics closely. It was addressed to Sarah Palin's predecessor, Frank Murkowski. Mr. Murkowski left office two years ago.

UPDATE: As of December 12, more than 30 governor's offices around the country had received letters containing the suspicious white powder. To date, all have proven harmless. Authorities say the letters have all originated from central Texas.

74 Declared Disasters in 2008

As 2008 draws to a close, many people might be inclined to bid the year good riddance. At the time of this writing, we have experienced 74 federally declared disasters. Since 1953, only 1996 was a busier year with 75.

Severe storms topped the list with 52 events across multiple states. Storms were usually accompanied by flooding, tornadoes, and high winds.

Hurricanes and tropical storms followed with 14 declared disasters. Winter storms prompted 7 declarations. River flooding and wildfires comprise the rest.

Sources:
FEMA Declaration Process Fact Sheet
2008 Federal Disaster Declarations

Business Continuity and Data

There seems to be a growing misconception about business continuity that is coming from the technology sector. The phrase “business continuity” is becoming synonymous with data protection.

A recent press release touts that technology company X has issued a white paper on business continuity. The firm helps companies maintain business continuity by protecting, recovering and restoring data in the event of an interruption.

Two IT-related publications also recently ran articles on the importance of data preservation. Both emphasized data. One article focused on the impact hurricanes can have on the IT department. The second article examines business continuity standards, but only from the IT perspective.

This is all well and good, but it is a very narrow view of continuity. Since the growth of IT departments throughout the 1980s and 1990s, focus has justifiably been on protecting data and the network. But, there is much more to running a business than what resides on a server.

Business Continuity should focus on all critical processes, including, but not limited to data. After all, would data be of much use if the building that housed your sales and billing department was destroyed in a fire?

Continuity planning should start with protecting your most precious asset, the workforce. Having a place for them to work would be second. Then the ability to interface with and serve customers or clients would follow.

Surely, data can be a critical component to survival, but it is not the only one. Nor is it the most important.

Time for a Culture of Preparedness

Throughout Louisiana, retired Lieutenant General Russel Honore is using his public recognition from Hurricane Katrina to push for a culture of preparedness. Along with many other disaster-related professionals, Honore is trumpeting the need for ongoing readiness because many people and businesses in the state still do not make preparedness an ongoing priority.

Since 1953, Louisiana has experienced 55 federally declared disasters or emergencies. That number includes the expected hurricanes, tornadoes, and floods, but it also includes winter and ice storms. Since 1994, five winter weather storms in the state have received federal disaster status.

Louisiana is not alone in disaster regularity. One need only look at FEMA's website to see that federally-declared disasters occur regularly across the country. In 2008, the U.S. experienced 74 major disasters or emergencies across 33 states, Puerto Rico, and the US Virgin Islands. In fact, Texas, California, Florida, Oklahoma, and New York rank above Louisiana in total number of disasters since 1953. (For comparison's sake, the states with the fewest disasters were Wyoming, Utah, Rhode Island, and the District of Columbia, all with 7 in the same time period.)

News reports also drive home the point that devastating events occur on a regular basis. At the time of this writing, wildfires rage across southern California, terrorist groups are calling for more attacks against the US, and Louisiana and Texas continue the clean-up process after two hurricanes.

The trend of disaster regularity is clear. The numbers above reflect only those events that reach federal levels of recognition and do not include smaller, local events, which can be just as devastating to a family or business. In short, ignoring preparedness is simply a perilous and risky way to go through life.

Obama's HS Plan Beginning to Emerge

Following his recent victory, President-elect Barack Obama's homeland security strategy is beginning to come to light. The strategy is significantly different from existing policy and may indicate a positive step forward in securing the country.

Obama's goals for homeland security are:

• Prevent 21st Century Attacks Against the Homeland
• Defeat Terrorism Worldwide
• Ensure Nuclear Security
• Strengthen American Biosecurity
• Protect Our Information Networks
• Improve Intelligence Capacity and Protect Civil Liberties
• Prepare for Terrorist Attacks and Natural Disasters
• Protect Critical Infrastructure
• Restore America's Aging Infrastructure

The administration's approach differs from the past in three key are

• It places more emphasis on prevention and preparation measures.
• The plan transitions to a risk-based assessment to distribute HS funding.
• It strives to create closer partnerships with local, state and private sector in prevention, mitigation, and preparedness.

The last point is an important recognition of the concept that all disasters are local. As such, local and state authorities really run the show and use federal resources to assist where needed, not the other way around.

The details of Obama's policy remain vague at the time of this writing, but by most accounts, it is off to a good start. As the particulars emerge I will report on the impact, particularly as it pertains to the private sector.

An outline of the report may be read here.

California Schedules 7.8 Earthquake

The next big earthquake is scheduled to hit southern California on November 13. Millions will be affected.

Authorities are calling the massive earthquake exercise the Great Southern California Shakeout. In an unusual move, the public is being asked to participate. According to the website, individuals and businesses can register to participate across Los Angeles county.

The effort is being led by the U.S. Geological Survey and other agencies. The exercise also coincides with a gathering of scientists, policy makers, and emergency responders from around the world to discuss quake policies.

Despite an aggressive push to get the word out to the public, only 1 business has signed up to participate in the exercise. Hopefully, that is not an indication of readiness in the area.

Earthquakes in Northern Texas

Northern Texas experienced two minor earthquakes (2.5 and 3.0 magnitude) in the Dallas-Fort Worth area today. No significant damage was reported.

According to the U.S. Geological Survey website:

Most of North America east of the Rocky Mountains has infrequent earthquakes. Here and there earthquakes are more numerous, for example in the New Madrid seismic zone centered on southeastern Missouri, in the Charlevoix-Kamouraska seismic zone of eastern Quebec, in New England, in the New York - Philadelphia - Wilmington urban corridor, and elsewhere.

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Why Are We Not Preparing?

A 2006 Time article lamented that despite a series of disastrous events over a four year period – including terrorist attacks and multiple hurricanes – that Americans still do not prepare themselves.

Granted, some amount of delusion is probably part of the human condition. In A.D. 63, Pompeii was seriously damaged by an earthquake, and the locals immediately went to work rebuilding, in the same spot--until they were buried altogether by a volcano 16 years later. But a review of the past year in disaster history suggests that modern Americans are particularly, mysteriously bad at protecting themselves from guaranteed threats. We know more than we ever did about the dangers we face. But it turns out that in times of crisis, our greatest enemy is rarely the storm, the quake or the surge itself. More often, it is ourselves.

So, what does it take to get people to prepare for disasters? Retired U.S. Army General Russel Honore recently remarked at the Louisiana Association of Nonprofit Organizations annual conference that the country needs to build a culture of preparedness. One of his suggestions included a law that would require gas stations and pharmacies to have generators.

Legislation isn't the key, however. Laws don't change cultures. Instead, our culture can be altered by affecting change in a few areas, individual perception, institutional behaviors, and political priorities. Appropriate change could occur by following a template:

Urgency – Establish a sense that a change needs to occur soon to avoid predictable consequences.

Create a guiding coalition – Every movement needs leadership. To date, the guiding coalition for preparedness has too often been government and legal authorities. This is the wrong group to lead change as they often have a tendency to dictate change that improves their ability to react to a disaster rather than prevent it.

Create a strategic direction – Preparedness must be attached to bigger goals to justify the effort to do it. For example, individuals should prepare so they and their family are able to survive. Likewise, businesses should be ready so they can continue to function and serve their customer base.

Get buy-in – Once a direction is established, others must embrace it in order for it to become effective.

Build on the gains – When some people begin to embrace it others will begin to follow.

To be sure, many are preparing. But the culture is still not prevalent.

Survey Identifies Key Planning Trends

A recent AT&T study reveals some interesting trends in preparedness. The study is published annually for the last seven years and includes approximately 500 participants.

Before we get into the findings, it is important to understand that the study has significant limitations. First, only IT executives are questioned. Other executives may view things differently and should be included.

Second, the survey is conducted in five cities or metropolitan areas: Seattle/Portland, Chicago, New York, Raleigh/Durham, and San Antonio/Houston. The geographically disperse areas are tallied and averaged to produce a “national” perspective. Participating companies had a minimum of $10 million in annual revenue.

On to some key findings.

1 in 5 do not have a plan – 80% of respondents said they have either a business continuity or disaster recovery plan. The study does not distinguish between the two, although there are significant differences in the preparedness profession. BC relates to overall business functions while DR refers specifically to digitally stored data. The lack of distinction suggests that more than twenty percent of companies surveyed do not have appropriate planning in place.

30% do not consider planning a priority - The study finds 30 percent of those surveyed don't consider disaster planning a priority. This is a remarkable figure when one considers the responding audience. IT executives are generally more diligent in backing up data and protecting their systems than business owners are about planning to protect processes. If 30% of IT executives don't see the urgency, polling other executives on the same question is likely to produce an even higher percentage.

Disaster-stricken areas plan more - Companies in areas where disasters have struck recently appear to be more planning-oriented. Hurricane-prone Texas firms were more likely to test their plans than Chicago-based businesses. A similar trend can be seen when comparing New York to Seattle/Portland.

Larger companies plan more - Larger companies (500+ employees) are more likely to plan than smaller businesses (fewer than 100 employees).

Although the survey may have shortcomings that fail to reveal accurate numbers, it does signify some important trends that make it worth a read. I just hope that next year they will offer a little more clarity to separate business continuity from disaster recovery. Read the full report.

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Insurers Drop Man-made Floods from Policies

According to a recent report by the Times-Picayune, insurers plan to specifically exclude flooding caused by man, such as levee and dam breaches. Insurers opted to change their policies as a result of Hurricane Katrina related litigation over engineering failures in the levee system.

The change will begin taking effect for homeowners and businesses across the country and extend to Guam, Puerto Rico, and the Virgin Islands in January 2009.

The impact of the policy change remains to be seen. Just as an example, much of southern Louisiana's wetlands are controlled by some form of man-made systems. Does that effectively rule out flood insurance for half of the state?

If levees send rising water downstream and cause a flood in a community with no levee system further down a river or on a tributary, does that constitute man-made flooding?

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Are You Included in Government Disaster Planning?

Following the terrorist attacks of 2001, most people agreed that we needed to replace our “need-to-know” information sharing model – what I like to call the Cold War information flow model. A more open, multi-directional model was needed then and remains so now.

Sadly, we're still not there. In his 2007 book, The Edge of Disaster, Stephen Flynn suggested that the government does a poor job of including the private sector and needs to improve information flow about the planning process. Flynn focused specifically on the role of large companies who own roughly 95% of the country's critical infrastructure and want to play a role in strengthening it against terrorist attacks and natural disasters. However, their assistance is often turned away for a variety of reasons.

My own personal experience has been similar, but on a smaller scale. Here is just one example. While working on a disaster plan for my daughter's school, I recently went to the local police department to learn about their plans for schools in a disaster or attack. Unfortunately, it was a fruitless endeavor that ended up being an interrogation of my credentials to write such a plan rather than offering any help whatsoever.

As the police officer summarily dismissed my abilities and completely disregarded my questions, I couldn't help but think that either he still embraced the old, “need-to-know” information-sharing model or his department did not have a plan. That is a shame in either case. It leaves everyone in an awkward position. The school cannot anticipate what to expect from the “authorities” in a crisis situation until they are in the midst of one, which will diminish the effectiveness of a response.

Having spent the last seven years teaching law enforcement officers about terrorism prevention and catastrophe preparedness, I understand that the Cold War mindset is still well entrenched. For the safety of the community, it is well beyond time to move past that line of thinking.

I will conclude this entry with two thoughts:

First, I challenge anyone to give a valid reason for law enforcement to keep disaster planning a secret. Some might argue that they are trying to keep criminals from knowing how to take advantage of a given situation. True, but that is at the cost of preparedness for the broader community. Which is the greater need?

Second, as a member of the community, it is your responsibility to insist you be involved in the planning process. There are many organizations out there that promote broader participation. So get involved because leaving preparedness in the hands of first responders is a reactive measure that offers recovery assistance at their discretion. Honestly, is that how you want to plan for your survival?

Disaster Planning Helps in a Down Economy

As the economy gets worse, many business owners are understandably worried about cutting costs, dealing with a shrinking revenue stream and getting access to loans. One oft-overlooked way of addressing these fears and building resiliency is to have a disaster plan. The ultimate effect of a plan is to either prevent or mitigate the effects of a disaster. And if you think about it, a sinking economy is, in some ways, a disaster.

Below are some advantages to planning that could help recession-proof your business.

Identifies key operations that need protection – The planning process requires that a business' operations be identified and prioritized. Some may be absolutely necessary, which would dictate that protective measures are taken to ensure survival. You may not want or be able to invest as much to protect the lower priority functions. With a plan, you will have an objective way of determining where to put your resources.

Can identify duplicate or unnecessary costs – It is not uncommon during the identification of key operations to find unnecessary or repetitive costs. Perhaps it has been a while since you've looked at your supply sources, which could reveal two different departments are buying the same product from two different suppliers at significantly different prices. The planning requires you to look at processes and, consequently, associated costs.

Can identify ways to streamline key functions – As with identifying key operation priorities and costs, disaster preparedness planning may reveal ways to streamline key functions. Examining your processes often times gives a “bird's eye” view of the business that suggests improvements.

Provides a competitive edge in a tougher environment – One thing every business owner looks for is an advantage over the competition. Disaster planning offers the benefits mentioned above, but it also gives that extra edge of readiness in the face of adversity. Many businesses still do not plan for crises, so being prepared is certainly a step above the rest.

Ensures proper insurance – Last, but not least, a plan helps to ensure you have insurance specific to your business. Unfortunately, some learned the hard way from Hurricane Gustav that business interruption insurance does not cover loss of electricity. While many companies were undamaged, they remained close due to loss of power and filed an insurance claim. Insurance is not a one-size-fits-all solution. A plan helps to identify your specific needs and match coverage to them.

All of the above measures provide advantages in a down economy that no business can afford to be without. Those who opt not to have a plan are playing a risky game, one in which they are gambling against unknown odds.

5 Disasters That Could Hit Any Business

Around my hometown on the Gulf Coast, people tend to think of disasters as products of mother nature, particularly hurricanes. But there are many more that could strike at any given moment. The same is true for any part of the country. Below are five basic disasters that should be part of any preparedness plan.


1) Data Revelation – It's no secret that hacking occurs every day. No matter how safe you think your data is, there are any number of ways for it to get lost, stolen, or revealed to the wrong people. For instance, Blue Cross/Blue Shield recently made the news for unintentionally disclosing personal data on 1,700 of its agents, including social security numbers, addresses, birth dates and other sensitive information. Your data is never more than one mistake away from landing in the wrong hands.

2) Natural Disaster – Let's face it, no matter where you are natural disasters can and will occur. Some appear out of nowhere with no warning while others are known for days before they strike. Any natural disaster has the potential to wreak havoc from simply keeping customers away with severe weather to knocking whole buildings down.

3) Theft – Another fact of life is theft. Stolen equipment or inventory can have devastating effects on a business. The effects can range from a mess to clean up to severe damage to critical business operations.

4) Public Relations Crisis – Most businesses overlook the possibility of a public relations problem, but all it takes is one incident that can take away a whole product line or, worse still, damage your reputation. Let's say one of your major suppliers recalls a product line for safety reasons. The product constitutes a significant percentage of your shelf inventory, but suddenly, you are losing sales during the busiest season. In another example, perhaps a customer or former employee has filed a lawsuit against you following an accident on your property. To make matters worse, the media has sided with them and is making you out to be an uncaring person.

5) Terrorism – The potential for attacks by radical groups are a fact of life these days, they can take many forms ranging from small, harmless events to full-scale devastation. We're not talking just about Al Qaida, but any group that wants to capture public attention. That could include SUV-burning environmentalists to the D.C sniper shootings of 2002. Think of the businesses that suffered, such as gas stations, as people stayed off the streets. A 2007 FBI report on the sniper threat in the U.S. stated: “[S]nipers could possibly target many components of the civilian infrastructure, such as schools, churches, post offices, retail stores, gas stations, movie theaters, and so forth. Although appearing random, the engagement of a range of these types of targets over time may give the impression that nowhere is safe from a potential attack.”

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GAO: Businesses Key to Community Recovery

In a recent report, the Government Accountability Office is calling on state and local governments to include business recovery planning. The goal is to reduce business relocations and help them adjust to changing market conditions so they can play a role in reviving an afflicted area.

The report identifies businesses as a key element in rebuilding a community after a major disaster, such as a hurricane or tornado. “Widespread failure of individual businesses may hinder a community's recovery,” according to the GAO report. Homestead, Florida is cited as an example of how a hurricane can alter a community. Following Hurricane Andrew, the Air Force base permanently closed and retirees and winter residents opted to move elsewhere. As a result, the city and the market fundamentally changed.

Some of the planning measures call on local and state government to maintain programs that help with recovery. Measures include low-interest loan programs, establishing outreach programs to help businesses understand changing market conditions, and taking steps to encourage businesses to stay in the area following a disaster.

Read the full report.

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Many Would Ignore Evacuation Orders

A recent study uncovers what many have suspected, but authorities often deny. Roughly 63% of parents said they would defy orders to evacuate and instead try to reach their children in the event of a major disaster or terrorist attack. The finding comes from Columbia University's National Center for Disaster Preparedness.

Additionally, 45% of parents also reported that they did not know where they would be able to meet their children if they had to be evacuated. School disaster plans often include a meeting place for this event, but the study clearly reveals that parents have not been sufficiently informed on the plan.

For more details, read the full report

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$2.5M Grant for Business Recovery

As the title suggests, a $2.5 million grant is being provided to the Louisiana Economic Development Department “for business assistance and recovery” in the wake of Hurricanes Gustav and Ike. What is this money intended to do? According to the LED press release:

“LED plans to use the $2.5 million investment to fund hurricane recovery projects, including six business counseling centers currently located in affected communities, a 24-7 business recovery information center available at 1.877.610.3533, technical assistance for small businesses impacted by the hurricane and long-term economic recovery strategic planning.”

Let me see if I have this straight, the federal government is giving money to the state government so the latter can operate counseling centers? Meanwhile, small businesses in the affected areas can come to one of the six centers to apply for recovery loans that will take weeks, possibly months, to get.

I suppose I am a little surprised that it took three full weeks for the state to get a grant from the feds even though everyone knew the hurricanes were coming well in advance.

The lesson for all small businesses is, at the very least, to have a readily accessible cash reserver that can last at least a month, preferably two. Clearly, the government is a last resort as a means to recovery. For all their anticipation, planning, preparing, etc. -- which I know Louisiana authorities took very seriously this year -- they are still quite slow to act.

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5 Reasons People Fail to Plan for Disasters

Planning is not a difficult thing to do, particularly when you're trying to preserve or grow something containing value. Nonetheless, people often fail to do it. Below are some common reasons for this:

• Positive Thinking – People have a tendency to think about the positive aspects as a mechanism of avoiding or denying potentially bad things. It's the “it can't happen to me” syndrome.
• Shifting the Blame – Blame for negative events and consequences is often shifted to someone else. This is a way for people to protect themselves and avoid responsibility. Perhaps the most popular target is the government and its perceived failure to “rescue” a business who failed to prepare themselves for a predictable disaster.
• Maintaining the State Quo – The old adage “if it ain't broke, don't fix it” often gives people an excuse to avoid planning for potential disasters. However, nothing could be further from the truth. Crises can happen, regardless of what anyone thinks.
• Procrastination – Believing that disaster is always a long way off encourages people to delay planning. However, many can occur with little or no notice.
• A Waste of Effort - Spending time and effort to address potential problems can be seen as a wasted investment. After all, you don't really need preparedness unless a crisis occurs, right? Wrong, waiting until a disaster is underway will increase the time and cost of recovery.

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Is Recovery Assistance Better than Planning?

According to the Louisiana Economic Development Department approximately 100,000 businesses in the state were impacted by recent hurricanes. That doesn't even include what happened in other states, such as Texas and Mississippi.

Louisiana and the federal government have responded to this tremendous impact by setting up a number of centers to help with recovery resources. Let's take a quick look at that list:

• Free Counseling and Technical Assistance
• Disaster Loans for Physical Damage
• Disaster Loans for Working Capital
• Workforce Assistance
• Disaster Unemployment Assistance
• Extension of Federal and State Tax Filing Deadlines
• Temporary Housing
• State and Federal Contracting Opportunities

To be sure, those resources have potential to be helpful. But, they are not conduits to free money as many believe. In most cases, those in need are simply postponing the cost of recovery, which may or may not have interest tacked on to it. In other words, the government is willing to loan you the money to recover, but you will have to pay it back. Moreover, the loan process will be sped up, but that's by government standards, it still takes a minimum of 6-8 weeks before any cash starts to flow.

The lesson here is to prepare for disaster ahead of time. A little planning goes a long way to reduce recovery cost, time, and effort.

Do You Have the CVS Edge?

Hurricanes Gustav and Ike devastated many towns along the Gulf Coast. Power was knocked out, roads were closed due to debris, businesses remained closed. But one consistency can be found in almost all locations stretching from south Texas to central Louisiana: CVS/pharmacy opened its doors for business within 24-48 hours.

You might ask why that's a big deal, after all, they're a major chain and should be able to get back to business quickly. That has nothing to do with it. Many large stores take several days to open. Nor is it eager store managers (okay, maybe that plays some role).

The clear answer is CVS has an effective disaster preparedness plan. They're so sure their plan works well that they issue a press release during the immediate aftermath to make sure the media knows their stores are open for business. And on top of all that, sometimes they do a little extra like give away ice and water to residents.

Business owners, imagine if you were in such a position. Think about that competitive advantage! Wouldn't it be nice to come through a disaster that has devastated your town and be able to loudly announce that you're operational and ready to help the community?

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Simple Tips to Overcome Disaster

For the last 36 hours, tropical storm-force winds and outer rain bands from Hurricane Ike swept through Baton Rouge. By early morning, the power was knocked out for more than 15,000 people, including many businesses.

The local energy companies responded quickly and had most of it restored within hours. However, that did not stop rumors that the mayor was set to reimpose the Gustav curfew and force businesses to close for the day. The police department held a mid-day news conference to refute the rumors, but harm had already been done.

As if the weeks-long power outage had damaged the local economy enough, the last thing businesses needed was an unsubstantiated rumor that they were closed for the day. Savvy owners might have figured out ways to bring in the customers, but most probably suffered one more day (12 total) of lost revenue.

Business owners would do well to draw a few simple lessons from this series of disasters:

1. Have a plan to deal with the unexpected so you can resume critical functions as soon as possible.
2. Keep a cash supply easily accessible in case of emergency. This may be necessary to cover expenses, especially to pay employees to keep them around.
3. Invest in your own power source, even a modest one
4. Be creative in attracting customers in the aftermath of a crisis. In many cases, they need you to be available, even if they're not sure how to reach you.
5. Don't count on the government to rescue you, especially not in a timely manner. Sure, you can get a loan relatively quickly, but that's not the same as resuming business.

It is truly sad to know that a number of businesses will not survive this hurricane season simply because they weren't ready to meet this predictable scenario.

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Gustav Observations: 10 Days that Shook Commerce

It's been ten days since Hurricane Gustav ripped across Louisiana. Power has been restored to roughly 70 percent of the Baton Rouge area, yet many businesses remain closed.

The economic impact on the region is mounting. According to some reports, losses are expected to reach $10 billion in both private property and lost business. Sadly, almost all of the businesses are losing money because they have no power. A small percentage were damaged by winds, water, or falling trees, but most simply are without electricity.

It's unfortunate that these businesses will suffer a huge loss over this time, even more so because they could have taken steps to mitigate. Many did handle the problem well and reopened within a 4-7 day window by using generators. Sure, there was no air conditioner for the customers, but at least they had customers.

Business owners (and their employees) need to ask themselves whether they can really afford to let circumstances close them for 10 days.

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Gustav Observations: Missed Opportunity

Over Labor Day Weekend my family and I evacuated our home in southern Louisiana for a safer place farther north some 200 miles inland. We thought we would be out of hurricane Gustav's immediate danger zone and would have little to worry about other than some strong winds and heavy rain. What we found was something different. Clearly, many others were surprised as well.

The town where we stayed was packed with evacuees. Many more had passed through as they traveled north as well. The morning of the storm we decided to get breakfast at a local fast-food chain. As we perused the menu, the girl behind the counter politely mentioned they were out of everything except biscuits, salad, coffee, and water.

Naturally, I had to wonder if they considered how the coming storm would impact them. Obviously, the news had been talking about Gustav for days, the restaurant was located on a major evacuation route, and they could have made a significant jump in revenue had they planned ahead. Instead, they sat idle for most of that day, the next, and possibly a third day while they waited for the storm to pass and new shipments to reach them.

I'm sure this particular restaurant was not alone. Many failed to plan ahead. As a result, they lost revenue not only after the storm, but before it ever struck.