Crisis Management Consulting

From time to time, I’m asked to talk to groups of business folks with small operations, family owned businesses, home-based operations, and owener operated enterprises.  Here is the substance of an hour’s talk:

Think About It:

1. There IS A 9 OUT OF 10 chance that your business
   will go out of business for good if you are not prepared for a major disaster.
2. If you are injured or become unable to work as a
   result of a disaster, the chances are even higher that your doors will close.
3. If you are unable to conduct business after 2
   weeks of being closed, you probably won’t reopen.
4. Most businesses that depend upon daily cash flow
   have a permanent loss of revenue when the business is closed.
5. Most operator/owner run businesses will have
   permanent loss from any revenue or loss not covered by insurance and for the
   length of time it takes for the insurance to pay off.
6. Most owner/operators have chosen not to pay for
   L&I, unemployment and other public assistance.
7. Power and other utility services can be
   interrupted for up to 2 weeks.
8. Banks will not honor lines of credit and cash
   loans without proof of payment
   now.
9. Customers are fickle – many of them take their
   business to other providers and not come back.
10. The emotional and operational  cost of a
    lost dollar is 3 times – it takes $3 to overcome the cost of losing $1

GET READY:

1. If you have to shut down for 3 days – and you
   know it – list 5 things that you will do for your business?
2. Working SMART for your business:

• S – STRATEGIC  – STAY in business
• M – MANAGE – the MOST important things – People, Assets, Business Capability
• A – ACCOUNTS – Customers, Bank, Vendors, Payroll
• R – RESOURCES – Back ups, Extras, Credit, Funds, Alternates, Fixes
• T-TIME and TALENT - Prioritize, Authorize. Improvise, Back to Strategize

SYSTEMS THAT MUST BE IN PLACE:    

• The ability to communicate with Staff, Customers and Key Stakeholders
• The capability to continue, restore and restart the provision of  services or selling of products
• The ability operate business  process including:banking, ordering,
  etc

PLANS and HOW TO’s WHEN THINGS ARE NOT NORMAL

1. How are we going to manage ongoing business
2. How are we going to assess damage and impacts – to our people, our place of operation, our assets and our capabilities
3. How are we going to restart operations if interrupted
4. Is there a way to recovery that which has been lost?

Tips on Damage Assessment

1.    Have a list of everything that could be broken or lost – through a video capture, lists and photos.
2. Take photos and make notations of all lost, broken, damaged, and ruined assets
3. Get estimates for repair and replacement
4. Work with insurance reps to prepare reports/claims -
5. Know the policy provisions and meet any insurance requirements

BACK IN BIZ???

Advertise and announce to EVERYONE – customers will return!

SOME THINGS TO KEEP IN MIND:

• Have more than 1 cell phone and email
• Keep customer contact records backed and available
• Accounts receivable – you want to keep that backed up
• Accounts payable – pay people first
• Have back up signatures and power of attorney so
  that someone can run your business
• Have alternate suppliers and be prepared to provide temporary solutions to customers
• If you cannot provide a service, be ready to make a decision about your current jobs – either pay for a substitute or plan to recompense your customers
• Read all your insurance document NOW – make sure
  you understand it

If all is lost – spend quiet time rethinking your business – sometimes you can restart and sometimes you can start over.  Get legal advice, if needed.

Remember – a Crisis is ALWAYS an Opportunity

Jan Decker – 253 261 2704