Business interruption: It’s not a matter of if, but when

Ten years ago, on August 14, 2003, a single outage in the electric grid cascaded across eight northeastern states, putting 55 million people in the dark for days.

The Great Blackout of ’03, which also temporarily shut down thousands of small businesses, was a catastrophic reminder that we’re all one squirrel-in-a-transformer, fire, flood, tornado, hard drive crash or computer virus away from being out of business. One survey revealed that three out of four small business owners believe they will have a business interruption event in any given year. Alas, in that same survey, only 20% said they were prepared.

Are you prepared to deal with a business interruption event? Here are a few ideas.

Operational recovery
What would you do if your building became unavailable to you or your customers?

1. Instead of desktop computers, purchase laptops with docking stations that allow key employees to work and connect remotely, both internally and with customers. Make sure the laptops have Wi-Fi and a mobile router (4G) in case your broadband connection goes down. This costs a little more, but it’s good connectivity insurance.

2. Identify and become proficient with cloud computing applications that serve as alternatives for any installed programs that may be lost.

Financial recovery
A significant part of the working capital of most small businesses is from cash flow. What would happen if your cash flow was interrupted?

1. Consider purchasing a business interruption rider on your business’s property and casualty insurance policy that will pay you cash upon the acceptance of a claim. Be sure to read the fine print, all policies are not created equal.

2. Maintain a close working relationship with your banker so you won’t have to introduce yourself to the person you’re asking for a disaster loan.


Data recovery
Small businesses are using digital assets more and physical assets less in the execution of their business model. Are you prepared to protect your data as comprehensively as you protect your building, equipment and inventory?

1. Assign one person to be in charge of keeping all computers enabled with a proven malware program and keep them current on all units.

2. Regularly copy critical data from your hard drives and store it offsite, plus backup your data with a cloud-based data backup and recovery firm.

The only people who never experience a business interruption event are those who don’t have a business.

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