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Here’s How to Survive a Business Disaster

Friday, November 16, 2012

Steps big and small are needed to prepare, local companies say

Everyone hopes they won’t have to use a disaster plan, but local small-business owners who have suffered a major loss urge people to develop one nonetheless.

Susan and Lawrence Crane of The Party Concierge are glad they did some disaster preparation. An Aug. 6 fire started in a neighboring business and consumed The Party Concierge’s 40,000-square-foot space, including all of the props and merchandise of the 19-year-old event decor and design business. Their damages are estimated at $5 million.

Luckily, the Cranes had sufficient insurance, including business interruption coverage. They also had an emergency plan and all their digital files backed up.

In addition to those steps, the U.S. Small Business Administration, the Federal Emergency Management Agency and experts urge small business to install a generator for emergency power and consider alternative work sites. One-fourth of businesses do not reopen after a major disaster, estimates the Institute for Business and Home Safety.

The Party Concierge is now operating its office from two trailers in front of the burned-out building and is using an 8,000-square-foot warehouse for its props. In January the company will move into a 42,000-square-foot warehouse around the block.

“You have to have some plan or there’s no way back. You business is gone,” said Chris Dudley owner of CMIT of Sacramento Reno Irvine, an information technology company. A big part of its IT support for companies is to ensure they have backup systems for computers, phones and other technology.

When a Sept. 24 fire — also originating from a neighboring business — destroyed the Carmichael office ofParisi Insurance Agency, brokerage staff members were able to keep working from home because the company had a disaster plan in place with CMIT, said Joe Hart, a Parisi vice president.

“We hosted their email within five minutes of hearing of the fire,” Dudley said. From the ashes, CMIT also grabbed a fire-proof unit that Parisi used for automatic computer backups.

Parisi was up and running at a new place in Gold River within three weeks, Hart said.

Quick responses also helped The Party Concierge deal with the immediate aftermath of their fire.

The Cranes had well-established relationships with bankers, vendors, customers and competitors who rushed to their aid. They donated props, supplies and, for an immediate job deadline, even their labor in arranging floral displays. One auto dealer supplied a van, telling them to use it as long as they needed it.

In addition, they had already been working with a business consultant and a public relations professional, both of whom immediately stepped in to help, making calls, using social media and other means to spread the word that the business was still functioning.

“It just proves if you do good business and take care of your clients … it all comes full circle,” Susan Crane said.

While Hart and the Cranes felt their companies were well prepared, there are a few things they wish they’d have done differently.

The Cranes wish they would have had even more insurance coverage for their inventory. After the fire, Susan Crane called her agent to increase her coverage for home and business. “Give me all you got,” she said. Even earthquake insurance.

The Cranes also have realized how important it is to be organized. Something as simple as a binder to hold business cards after the fire was a huge help, Lawrence Crane said. They could keep track of the adjusters, contractors and all the new people they were dealing with.

“The very day of the fire we started getting people coming in, offering their services. At the time, you’re not prepared for that,” Susan Crane said.

They also learned to be strong for their employees, who stuck with them. “You have to be brave. You can’t be crying every day.”

Also, said Lawrence Crane, “Once you make a decision, you have to move forward on that decision.” You’ll get a lot of different advice, he said, including some people who will say to just bag it. If you delay in deciding, you’ll burn through your insurance coverage time.

While all the digital information was backed up, Hart wishes he would have made copies of the photos and mementos he had displayed in his office.

There’s a huge learning curve for surviving a business disaster, the Cranes said. They wish they would have had somebody to talk to who had gone through it. In the future, they want to be that resource for others.

Lessons learned

• Create a disaster plan that includes adequate insurance, digital information backup and identifies alternative worksites

• Maintain a strong network of colleagues and clients who could support you during a disaster

• Make copies of photos and other personal items displayed at work

Link: http://www.bizjournals.com/sacramento/print-edition/2012/11/16/how-to-survive-a-business-disaster.html

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