With hurricane season officially underway, officials and industry groups are urging small business owners to start planning ahead for a potential disaster. "If you don't have a plan, you're sunk," said Deano Bonano, Homeland Security Chief for Jefferson Parish, in a workshop for small business owners this week.
Bonano and others, such as Karen Mills, a regional administrator for the U.S. Small Business Association, urge business owners to do a thorough risk assessment of their property and facilities and create a Continuity of Operations Plan (COOP) so they can get back up and running as soon as possible. This plan should be assembled with input from all the employees and should account for every facet of the business' operation.
As part of that plan, Mills says "communication is absolutely vital." Owners should have a plan worked out far in advance for staying in touch with employees, including a phone number those employees should contact - one outside the 504 area code, which may be inoperable during hurricanes.
Additionally, Mills says small business owners should have all their vital documentation on hand in case an evacuation is necessary, including payroll, account information, contacts, and tax records.
A business' COOP should have plans for relocation, Bonano advises, in case there is a protracted period before it is safe to return to the area. Owners should develop contacts in advance with real estate agents who will understand the business' needs in case a relocation is necessary. Owners should also scout the potential temporary location to ensure the infrastructure there can support the business and provide the necessary materials, storage space, maintenance facilities, etc.
Bonano urges business owners to set up an order of succession, should important personnel be killed, lost, or incapacitated. "I know it's unpleasant," he said. "But something very well could happen to you."
Bonano says it's essential that employees are educated about and trained in implementing the COOP, and that the plan is practiced routinely. "A plan that isn't tested is as bad as no plan at all," he cautions.
Re-entry plan crucial
Small business owners also should be aware of their role in the region's re-entry plan that will be implemented if a mandatory evacuation is ordered and a storm causes large-scale damage to infrastructure. Businesses are divided into three tiers based on their importance to recovery efforts - the first tiers are allowed into affected areas more quickly than the rest.
Tier One businesses are those that are essential to the immediate response - they are allowed to enter the city immediately after a damage assessment is conducted a few days after the storm. Tier One businesses include those contracted by the state to help with cleaning up and securing affected areas before the return of the general public. It also includes businesses that handle hazardous materials, so that those materials can be safely contained. Banks and other financial institutions can get Tier One status to secure their buildings and ensure the safety of the assets contained therein.
Tier Two businesses are those necessary to sustain the city as citizens filter in. These include grocery stores, gas stations, "big-box" retailers such as Wal-Mart and Target, hardware stores such as Lowe's and Home Depot, banks and financial institutions returning to operation, health care providers, and construction companies. Tier Two businesses are allowed to return once the Parish President deems it safe.
Tier Three organizations are those not included in Tiers One and Two. They return later than the rest, and resume operations once the immediate relief effort is concluded.
In order to get proper early access, businesses need placards designating their tier. The application for these placards can be found on the web sites of various parishes.
Business owners will only be allowed to enter before the streets are opened if they have the placard and a photo ID. Employees can use their boss's placard, but only with an original copy of a signed letter giving them permission.
The placards allow entry at any point in the region, although only as a route into the registered parish; Placard-holders caught sight-seeing or conducting other unnecessary business in a different parish risk arrest. Business owners with locations in more than one parish can apply for placards allowing access to the entire region.
The placards require a new sticker every two years.
In addition to these precautions, small business owners should be aware of ways to mitigate storm damage to their finances. Mills says the SBA provides low-interest disaster recovery loans to small businesses, to prevent expenses and loss of business during the aftermath from forcing companies to go under. Mills also urges business owners to make sure their operations are properly insured, including flood insurance and "business interruption insurance," which covers expenses during the recovery efforts. She says business owners should carefully review their policies to make sure there are no gaping liabilities.
Finally, business owners should be prepared to take care of themselves in addition to their business interests. "When a storm hits, you may be able to stay at home - or you may have to evacuate and find yourself spending a night or several nights in a car, a shelter or somewhere else," says Pat Skinner, disaster recovery and mitigation specialist with the LSU AgCenter. "It's important to make your plans accordingly."
Skinner says it's important to keep a "stash" of food, water and other living essentials tucked away in case the area has to go without power for an extended period of time. If a business owner needs his or her employees to work in the immediate aftermath, it's essential that they have supplies set aside in advance as well.