Planning for the unthinkable: what's your plan to ensure people are ok, business isn't lost?

• Author: Ascierto, Jerry
• Position: Disaster Preparedness

At 11:15 a.m. on a mild Monday in December, Rusty Roy headed out of his office to get a muffin from the local bakery, a mid-day routine. But as the Paso Robles-based CPA made his way out the door, he noticed his phone's blinking message light and decided--fortuitously--to check his messages.

As Roy returned the call, a 6.5 earthquake rocked Paso Robles, burying two victims, who were along the same path Roy would've taken to the bakery, under rubble.

"It was like a giant pounding on our roof," Roy says. "It was sickening."

In the ensuing weeks, Roy and his firm, Roy & O'Conner, CPAs, Inc. received a lesson in disaster planning and recovery they will never forget.

"There were so many variables along the way that we were constantly adjusting our plan," says Roy, whose firm suffered a few broken windows, a few days of down time and a few hundred dollars worth of damage. "We're very diligent about our backup procedures and we try to keep our technology fairly current.

"But even as well-prepared as we were, there's always something you forget," says Roy, chair of the CalCPA Management of an Accounting Practice Committee.

WHO'S PREPARED?

Short of tea leaves or a crystal ball, predicting if, or when, a natural disaster will strike is impossible. Still, that doesn't mean you should just sit idly by. How long can your business afford to be out of commission? Where will you work if your office is inaccessible? How many employees can work from home? Who's in charge if something happens to your key management? Who has what data and where is it located?

These are all tough questions and no one particularly likes to think the worst. But a disaster plan for a business is as important as its financial plan. Unfortunately, many businesses don't understand the importance of a disaster plan until it's too late.

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According to a recent Robert Half survey, 37 percent of 1,400 CFOs believe their firms are most vulnerable when it comes to disaster recovery, followed by security of information systems, at 24 percent.

Additionally, a recent American Red Cross poll reveals that 62 percent of corporate employees were either "not confident," "didn't know" or were "neutral" when asked if they were prepared for a disaster at work. And the Federal Emergency Management Agency estimates that 40 percent of all businesses hit with a natural disaster fail to reopen.

But just having a plan isn't enough. An oft-overlooked aspect of disaster recovery planning is simply keeping the plan updated. "You have to practice it and you have to keep it up to date," says George Paulsen, Menlo Park-based partner with Hood and Strong and the author of the MAP Committee's Disaster Recovery Planning Guide.

"I think that's where most businesses fail in their planning," Paulsen says. "A company might say, 'OK, we've got a plan,' but will they remember where or what it is while they're running out the door?"

TAILOR MADE

No one disaster plan fits all companies. Plans must be tailored to your business' goals, management style, size, resources and location. "Just as your business is an ever-changing entity," your plan should be a dynamic document, says Larry Kalmis, chair of the Business Continuity Institute, an international organization for business...