BE PREPARED: This is not the time to think about how you'll protect your restaurant.
BACKUP: Computer records and critical documents should be saved online if possible.
THEFT TARGET: Computers and other equipment should be safeguarded against looting.
Many of the thousands of small businesses destroyed by the catastrophic effects of Hurricane Katrina will never reopen their doors. However, many others are already back in operation and on their way to a healthy recovery.
The difference? In most cases, say the experts, the fortunate ones are those that had a disaster preparation and recovery plan to guide them through that traumatic time.
Depending on your restaurant's location and other factors, the odds of you being the victim of a catastrophic loss from wind, water, or fire may be greater or lesser than average. However, every restaurant owner faces some risk of a crippling disaster.
"Of course, not every disaster is a major catastrophe," says food industry consultant Izzy Kharasch. "Restaurant owners need to be prepared to deal with small disasters that can easily turn into major problems," he adds. "A patron could slip and fall or a windstorm could damage the building."
The key to minimizing the risk from disasters large or small is a well-thought-out plan of action. Here are a dozen steps you can take to help your business avoid or recover from a catastrophic loss:
CREATE A DISASTER PREPARATION AND RECOVERY PLAN.
"Every small business owner needs to have a disaster preparation and recovery plan, even if the business is located in a relatively low-risk area for natural disasters," says Gene Fairbrother, consultant to the National Association for the Self-Employed and an expert in disaster planning. "Even if it is not formally written down, you need to consider how you will continue operating if disaster strikes."
Your plan shouldn't be a cumbersome, complex project, Fairbrother says. "To be effective," he explains, "it should be a model of clarity, fully understood by every employee."
Whether it's in writing or not, it's important to refresh your plan periodically. "Some basics of a disaster plan seldom change," he says. "For example, your evacuation destination, or the first things you'd grab on your way out if you had to evacuate in a hurry. However, other things do change, such as contact information on vendors, income and expense records and places to find replacement equipment. Review your disaster plan at least once a year to make sure it still works for your business."
MAKE YOUR DISASTER PLAN COMPANY POLICY.
"It's important to make your disaster plan a permanent part of your business philosophy," says Fairbrother. "However, it often takes another set of eyes and ears to point out the cracks in a plan, or to spot missing components. That's why you should share it with someone else, especially your employees. They may find a flaw or an important step that you missed.
"Beyond the possibility that you might owe some employees a paycheck, a business owner has little or no legal obligation to employees if the company closes due to a disaster," he says. "Still, you need to make your employees part of your disaster plan. Failing to do so will hinder your ability to get the business back up and running if the need arises."
MAINTAIN AN OFF-SITE BACKUP OF ALL COMPUTER RECORDS.
According to one estimate, 90% of all business records are now electronic. That makes protection and recovery of vital business information easier, provided a careful system of backing up is in place.
Most restaurant owners have learned the importance of backing up business information on their computers, but not everyone does a complete job. "At the very least, says Kharasch, "a restaurant owner should make weekly backup copies and store them at home."
Stefan Dietrich, Ph.D., co-author of the book, Contingency Planning and Disaster Recovery: a Small Business Guide, stresses the importance of maintaining an up-to-date backup copy of critical data at an offsite location. "Unattended automated backups are better than using CDs," he says. "Typically, most people don't follow through with creating CD backups. For that reason, automated online backups to a remote location via the Internet are much better."
"A decade ago, I chose to protect one of the most valuable assets of my business, its data, by taking the appropriate steps to make sure that it would be safe from a hurricane," says Steven Rothberg, president of CollegeRecruiter.com. "Although the chances of a hurricane hitting Minneapolis are almost nonexistent, I believe that such a strategy is a good investment for any business that depends on information. As a result, all of our data is automatically backed up every night via an encrypted Internet feed to California." You can obtain more information on internet backups at http:// www.atbackup.com.
Regardless of the system you use, you must be sure that your backups are working properly. "You should test them regularly and be aware of typical recovery time," says Dietrich.
STORE COPIES OF IMPORTANT PAPER RECORDS OFFSITE.
Some of your most important business records may be in paper form. Scott Daugherty, of the Small Business & Technology Development Center at the University of North Carolina, suggests that you make copies of important business papers such as tax returns, financials, insurance policies, leases, and contracts and store them in a separate location from your business.
SAFEGUARD YOUR MOST PRECIOUS BUSINESS ASSET.
Put simply, the goodwill of your customers is the foundation for the continued health of your business. Of all your business assets, your customer list is among the most valuable and irreplaceable. Your plan should include specific steps designed to keep your customers informed of your situation throughout the crisis period.
"If you are out of business for a few days—or longer— you need to let your customers know what is happening and when you expect to reopen," says Fairbrother.
One possibility is newspaper or radio announcements. If you maintain any sort of list of regular customers, you must do everything possible to make certain that you have access to that list. "As with other business records," says Fairbrother, "it's best to store copies offsite."
REVIEW YOUR INSURANCE COVERAGE.
"Carefully review your insurance policy to make certain it is appropriate for your needs," says Donna Childs, CEO of Childs Capital LLC and co-author of Contingency Planning and Disaster Recovery: a Small Business Guide. "You should have business interruption insurance to replace lost revenues if your operations are disrupted due to a disaster." According to Childs, the failure to include business interruption insurance is the most common error in disaster planning for small business.
Childs suggests that you take digital photographs of your difficult-to-value assets and preserve them online where you can access them remotely. "This will be a great help in the event you have to file an insurance claim," she says. "Also scan critical documents, such as your insurance policy, building lease and so forth and have digitized copies available online for the same reason."
IS LOOTING A POSSIBILITY?
Looting in the throes of a natural disaster is an unfortunate and often unexpected phenomenon. However, in the sometimes-dark world of reality, looting of businesses crippled by a catastrophic event is becoming a not-uncommon occurrence.
The most frequent victims of this behavior are retail stores, so your restaurant may not be a likely target of looters. Still, with critically needed food (and especially if you stock liquor), protection against looters should be a part of your plan. In addition, expensive office equipment such as computers and any equipment that thieves could carry away are potential targets.
Your ability to plan for protection against looting will depend heavily on the configuration and location of your property, so the specific details will be largely up to you.
PROVIDE FOR BACKUP POWER.
"Consider the use of a backup power generator," says Kharasch, "so that if a disaster strikes it is not made worse by not having lights and power to at least get people out to safety. Also, having a backup battery for the computers should be part of your plan. Even if it lasts for only 2-3 hours, it will give the operation time to get checks out, close out servers and shut down the system with records intact.
In the unfortunate event that your restaurant is partially or fully wiped out by a natural disaster, your plan should include guidance on how to get it up and running again as quickly as possible. These basic suggestions should be part of your plan:
• Provide physical security. In the aftermath of any natural disaster, security of business assets is almost certain to have been compromised. As soon as it is possible to do so, you should put any parts of your plan dealing with physical security of business assets into effect.
• Know who is there to help you ... and let them know you need their help. "If you are involved in a major natural disaster, you should be prepared to make early contact with any organization that may be able to offer assistance," says Ernest Vendrell, Ph.D., Assistant Professor of Emergency Planning Programs, Lynn University, Boca Raton, FL. Some of these agencies include:
- Local offices of emergency management
- The Small Business Administration
- Local police and fire services
- The Federal Emergency Management Administration (FEMA)
- Your insurance carriers
"In addition to a variety of educational and training guides," says Vendrell, "FEMA also offers a number of disaster planning courses that are typically offered free of charge."
"It's important, too, to maintain ongoing contact," says Fairbrother. "During a major disaster there is always much confusion and you don't want your business to be the one that falls between the cracks."
• Submit insurance claims on a timely basis. "Don't risk a possible denial of a valid claim for failure to give timely notice of the disaster," says Childs. Review all policies that may apply to a disaster, including expired policies and umbrella or excess coverages."
• Keep your customers and vendors updated on a frequent basis. If you have retained information on your clients and vendors as recommended above, you should use whatever means available to keep them updated on your situation.
"Remember that your vendors have businesses of their own to run, and your regular customers will want to know if you have closed down or when you will be back in business," says Fairbrother. "In most cases everyone will work with you in your time of need. However, don't lose sight of the fact that vendors and customers have needs of their own and must continue to take care of those needs. Maintaining contact with them will increase the likelihood that they will stick with you instead of straying off to a competitor."
Every year, thousands of unsuspecting business owners find themselves victimized by a natural disaster. That's why investing a little time on a disaster preparation plan now will be a wise business investment.
William J. Lynott is a former management consultant and corporate executive who writes on business and financial topics for a variety of consumer and trade publications. You can reach him at [email protected] or through his website: www.blynott.com
Weathering the Storm
By Larry Carrino
As a Miami native, I've seen my share of hurricanes. The devastation left by Hurricane Andrew and the weeks that followed not only changed the lives of many South Floridians but also served as a portent of storms to come. During the last two years, Florida has become a magnet for massive storms, with three clobbering the state's west coast in 2004 and two wreaking havoc on South Florida's east coast this past year.
One of the sectors most affected by these storms was the restaurant industry. Weeks without power meant massive spoilage and the gas crisis that ensued after Hurricane Wilma—which ravaged Dade, Broward and Palm Beach counties—meant that even those restaurants that sustained or quickly regained power found customers in short supply. Though Florida has always been a beacon on Hurricane Alley, and restaurateurs have always had to prepare for the worst, it was after Wilma that many diehard local chefs took some unusual and common-sense steps to do business when it seemed there was no business to do.
One of those hardest hit was Dewey LoSasso, who opened North One 10 in the heart of North Miami in 2004. Like many, his restaurant was left powerless for over a week. Many regulars came calling post-Wilma, looking for a much-needed reprieve.
"It's very difficult to turn down business when you know you're not going to do the numbers you're accustomed to," LoSasso says. But without power, traditional lunch and dinner service was not an option. "We had gas but no lights." His solution? Three-course dinners to go, priced at $20 per person.
"With so much pricegouging going on, our goal was to price-please," LoSasso adds. "The dinners helped make a truly bad situation less unbearable for us and helped lift neighborhood morale." Not only did LoSasso's approach to poststorm recovery help raise his local profile as a goodwill ambassador, it also helped minimize waste and let him do a bit of business.
Though the smell of gas-powered generators and wood chippers filled the air in South Florida, there was also a savory breeze. With smaller establishments completely shut down, some restaurateurs took to the streets, setting up portable grills and dishing out grilled chicken,
burgers and hot dogs. With coolers full of sodas, beer and wine, it wasn't hard to draw crowds hungry for a hot meal and a little social interaction. One wood-burning oven pizza restaurant even hosted a "dark dinner," where guests dined by the glow of emergency lights. After four days without power, stark lighting and fresh pizza sounded like a pretty sweet deal.
For lighting of a different kind, Jan Jorgenson, chef/owner of Two Chefs, a landmark South Florida restaurant, hosted three nights of candlelight dinners immediately following Wilma. "I'm not located on South Beach or fed by a lot of walk-in traffic," says Jorgenson, who opened the restaurant in a south Miami strip mall a decade ago. "My regulars come from nearby neighborhoods. This is their place and after the hurricane they needed a night out." So Jorgenson opened his doors, lit candles and dusted off the manual credit card imprinter he keeps for emergencies. "No power means no POS," Jorgenson quips. "I've been around long enough to remember when we ran credit cards manually, so it wasn't such a shock to the system." Like LoSasso, the dinners allowed Jorgenson to empty his freezers safely and practically and cut down on spoilage. Jorgenson also picked up the phone and called some of his regulars.
Those phone calls proved pivotal to building poststorm numbers. In addition to personally contacting regular diners, PR-savvy restaurateurs contacted their publicists, so they, in turn, could get the word out that doors were open and grills were going. Once the dust cleared after Wilma, our phones rang off the hook with clients calling in with status reports. Projected reopening dates and hours of operation, limited due to governmentimposed curfews, were then communicated to the local newspapers and radio stations. Ironically, though many had no power, thus no TV, contacting TV assignment desks was important as local affiliates were simulcasting on radio, which, with newspaper routes compromised, was the primary source for information. Many lessons were learned in South Florida this past hurricane season. Restaurateurs learned that with a little innovation, zero business can turn into some business and that promotion takes on a distinctly hands-on quality after a storm. And with progressively more intense storms projected over the coming years, investing in a generator might not be a bad idea.—
Larry Carrino is vice president of Susan Brustman & Associates public relations in Miami. Contact him at [email protected]
Contingency Planning and Disaster Recovery: A Small Business Guide, by Donna Childs and Stefan Dietrich (John Wiley & Sons 2002, $55.00). The authors take small business owners through every stage of disaster planning from preparation to recovery.
Emergency Management Guide for Business & Industry. Published by FEMA, this step-by-step approach to emergency planning, response and recovery for companies of all sizes is available at no charge, online at: http://www.fema.gov/library/bizindex.shtm
Business Continuity Guideline: A Practical Approach for Emergency Preparedness, Crisis Management, and Disaster Recovery. Available free online at: http://www.asisonline.org/guidelines/guidelinesbc.pdf
Simply Essential Disaster Preparation Kit , by Catherine Stuart (Simply Essential Series, $9.95).
Get Your Claim Paid: A Pro-Active Guide for Handling the Most Difficult Part of Insurance (The Silver Lake Editors, $19.95).