Are You Ready for Your Next Crisis?

By Lila Casper, CPA
Senior, Audit & Assurance Services
lcasper@sponselcpagroup.com 

As business slows down a bit this summer, now is an opportune time to focus on non-financial issues. Chief among them should be crisis management.

Even when business is booming, it’s important to prepare for the unexpected. As the old saying goes, “If you fail to plan, you plan to fail.”

Every company out there — big or small — should have a Disaster Recovery Plan in place with clear procedures to mitigate major disruptions to their business.

Examples of possible crises to consider include:

  • Natural or man-made disasters that damage or completely destroy the business building and its contents (including business records)
  • Cyber attack
  • Failure of IT technology and inadequate backup of stored data
  • Product recall
  • Employee misconduct
  • Loss of a key employee

During your down time this summer, you should collaborate with your staff in determining the risks you face and developing standard protocols to ensure that your business bounces back from these obstacles. You should not hesitate to bring in an outside risk management consultant. They will see the risks you miss on a day-to-day basis, and they can also share the horrible war stories of companies that incurred a loss and didn’t have a contingency plan to protect them. You should also conduct a review of your insurance coverage to minimize the financial loss exposure. The losses may be great but the physical and mental toll they take on the business owner and managers are much worse!

Here are some of the first steps you should take in the planning process:

  • Determine worst-case scenarios.
  • Calculate the likelihood of particular crises occurring. (This will help you prioritize and determine high and low-probability crises.)
  • Identify what is essential to day-to-day business operations and put systems in place that allow the company to continue running smoothly — such as a backup server for crucial data.
  • Compile contact information for those you would have to notify in the event of an emergency situation.
  • Assign crisis roles to particular departments or individual employees. (For example, you’ll need a spokesperson to gauge media interest and issue press statements in certain crisis situations that would likely garner attention from the public.)
  • Be ready for the worst. Having multiple backup plans is prudent.
  • Your plan should project how quickly you can be up and running, allowing you to recover from various disasters that could harm your livelihood.

In the business world, you should always hope for the best and prepare for the worst. It’s better to be safe than sorry. So, take some time this summer to make sure your business is as sturdy and resilient as it can possibly be.

If we can assist you with achieving success in your business or personal affairs, please contact Lila Casper at (317) 613-7840 or email lcasper@sponselcpagroup.com.

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