| Don't you wish your business had street signs that | | | | Consistently run through "what if" scenarios within |
| warned of oncoming dangers? Warning: Cash flow | | | | your company. What if your company lost its biggest |
| speed bump ahead. Check insurance soon caution | | | | customer? What if your main supplier stopped making |
| light. Computer virus crossing. Unfortunately in | | | | your key products? How would that affect your |
| business, the warning signs are not always as clear as | | | | cash flow, personnel, overhead, etc.? Preparing in the |
| those we might see on the highway. Many times it's | | | | event of a business crisis is similar to a good |
| not until you are in the midst of a crisis that you | | | | basketball team preparing for game situations during |
| realize it could have been prevented if only you | | | | practice. The coach meticulously runs the players |
| would have been prepared. There are three "P's" of | | | | through a variety of challenging situations in the |
| prevention that you should follow: | | | | controlled environment of practice, so when in real |
| Protection | | | | situations the players are not caught off guard. |
| Incorporate appropriate protection for your tangible | | | | Another bonus for using the practice model for your |
| assets and business continuation, as well as your | | | | business is that you will often discover more |
| critical data. In the event of a tornado destroying | | | | strategic ways of running your business, ultimately |
| your building, how long can your business survive? | | | | minimizing the risk of crisis. |
| Can you operate without your computer system | | | | Profits |
| data? How long will your staff stick around without | | | | Minimize debt and maintain cash reserves or an open |
| funds to cover their payroll? Although each business | | | | line of credit equal to three months operating |
| has its unique requirements, two areas of protection | | | | expenses. This means you need to leave some |
| that should be the foundation of any business are: | | | | profits in the company. Unfortunately for many |
| 1. Business insurance coverage/ The bricks and | | | | companies, one more crisis will put them out of |
| mortar are covered, but what about everything else? | | | | business because they have failed to prepare for a |
| What about your office furniture or your computers? | | | | rainy day. Even with a healthy organization, a crisis an |
| Can you afford to start your business from scratch if | | | | be devastating, as described by Dr. Patricia |
| you have to? According to insurance agent Donna | | | | Mooney-Smith, of Heartland Women's Health Care, |
| Wren, "Business property insurance is designed to | | | | "We had just paid $500,000 to a malpractice |
| meet your individual needs, including buildings, business | | | | insurance carrier that went out of business. We had |
| property, equipment and business continuation | | | | to eat these costs, and we didn't even know if we |
| coverage. It's designed to protect your property, | | | | would be able to stay in business." Fortunately for Dr. |
| including equipment and tools that are crucial to your | | | | Mooney-Smith, her practice had begun preparing for a |
| businesses day-to-day functions. It also helps by | | | | crisis years before the big one actually hit. While the |
| providing the funds to replace everything you need | | | | crisis proved to be extremely challenging, the practice |
| to continue business operations." | | | | survived and continues to apply crisis prevention |
| 2. Data backup and disaster recovery system/ | | | | management. Steps to consider in preparing for a |
| According to Ed Van Buskirk, president of We are IT | | | | potential financial crisis: |
| in Kansas City, "20 percent of small to mid-size | | | | 1. Minimize outstanding debt |
| businesses will suffer a major disaster causing loss of | | | | 2. Develop a spending plan (budget) |
| critical data. Furthermore, according to a national | | | | 3. Develop and implement a plan for building a cash |
| study by the National Archives and Records | | | | reserve |
| Administration, 93 percent of companies that lost | | | | 4. Allow room for spending flexibility when crisis hits |
| their data for 10 days or more filed bankruptcy within | | | | Even though the highway department may not be |
| one year of the disaster, and 50 percent filed for | | | | posting warning signs of business crises, implementing |
| bankruptcy immediately."A backup and recovery plan | | | | appropriate protections, practicing "what if" scenarios, |
| is crucial to your company's survival. | | | | and maintaining profit strategies can help prevent and |
| Practicing | | | | minimize the impact of financial crises. |