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.