Step by Step: Stay Resilient with a Crisis Planning Checklist
- Elisabeth Ashley
Sep 21, 2023
While we can’t control whether a crisis befalls us, we do have control over how we react to it, and to some degree, how we recover from that disaster.
Natural disasters, which seem to be increasing in frequency and intensity, are just one component of the risks that businesses face. Depending on your industry, you likely face cybersecurity risks, employee fraud, theft of intellectual property, and many other risks. It can all feel so overwhelming that you just want to throw up your hands in defeat.
Don’t give in to despair. Crises can be manageable if you have a well-thought-out plan in place to maintain continuity of operations.
The items on this checklist can help you get the ball rolling:
- Assess the business’s risks. As a business owner, you’re no stranger to risk. But you might not have considered the full range of risks your business faces. Before you can plan ahead for disaster response and recovery, you need a good understanding of what types of crises you can expect to encounter. Just some of the potential impacts to consider can include increased employee absences, changes in demand, supply chain interruptions, and increased risk of theft and employee fraud. What are your plans to mitigate these risks?
- Review insurance coverage. Any risk that can be covered by business interruption insurance typically should be. It’s wise to take a good look at your insurance coverage annually to determine if it should be modified to reflect increased or decreased risk and changes in the value of property or financial exposure. Furthermore, effective risk management strategies and well-protected facilities may qualify for reduced insurance premiums, optimizing your overall insurance investment.
- Keep a cash cushion. As important as insurance is, remember that it often takes months to pay out. An essential part of emergency preparedness is building up enough cash reserves and credit lines to ride out the storm.
- Decide how you will keep people safe. In the event of a physical disaster, your employees need to know how and where to seek shelter. Build a crisis management team, identify. Keep on hand personal protective equipmentfirst aid supplies, a battery-powered radio, a NOAA weather radio with an alert function, and uninterruptible power supplies (UPS).
- Know how you will communicate. In addition to maintaining open lines of communication with employees, businesses must also establish effective channels of communication with vendors, customers, and the community. For employee communications, consider implementing "emergency call lists" as a valuable tool. Having a clear plan for reaching your employees in times of crisis is essential. Are you equipped with backup phone and internet services to ensure communication remains viable, even in the event of prolonged disruptions to your primary carriers?
- Safeguard records. Consider cloud-based storage to maintain backups of important documents (including tax and financial records). Whenever possible, set up remote access for your important financial accounts.
- Document valuables and equipment. Make a detailed, room-by-room list of your business equipment and other valuables. Be sure to include model and serial numbers, if applicable.
- Know your disaster relief There are many sources of help for small businesses following a disaster. As part of your emergency preparedness, pull together a list of small business disaster relief options, such as FEMA support.
- Enlist the help of your CPA. When it comes to disaster and business continuity planning, your CPA is an invaluable ally. For example, your CPA can offer input as you assess your business’s risks and review insurance coverage. In the event of an actual disaster, your CPA can help you maintain strong internal controls and clean financial statements. Your CPA can also help your business get back up and running by weighing the pros and cons of disaster relief programs, walking you through the application process, and keeping you apprised of evolving rules and regulations.
To learn more about disaster planning and business continuity planning, download our e-book Prepare, Recover, Emerge Stronger: A Roadmap for Financial Perseverance in Times of Crisis. If you’re ready to talk about how to plan ahead for a potential crisis, contact your CRI advisor.