Hot Topic: When Disaster Strikes

What a business needs to do to be prepared for the unthinkable—natural disasters such as hurricanes, floods, earthquakes, or fires

by Erinn Morgan

In the aftermath of Hurricane Katrina in 2005, ophthalmologist Marguerite McDonald, MD, was forced to shut down her successful practice, the Southern Vision Institute, in New Orleans, La. It would, unfortunately, never reopen.

"My building was locked up and patrolled by armed men from the National Guard; no one was allowed in or out," she says. "All of our medical, research, and financial records, supplies, furniture, and equipment were left in there for 10 months." She and her staff were allowed in, finally, only when they signed a release that promised they would not sue the government for any resulting diseases or health problems.

After Hurricane Charley in 2004, Port Charlotte, Fla.-based Community Eye Center's power was out for two weeks. "That kind of put a damper on doing business," says John Bailey, optical manager. But, this optical practice stayed operational (but not doing appointments) during this time with generators. A sound structure and some luck kept the office from flooding; the surrounding area was hit extremely hard and, as a result, Bailey's home was destroyed.

The stories are heartbreaking, sad, and, unfortunately, quite true. Whether they are unleashed by Mother Nature or man, things like fire, flood, hurricane, or the like can quickly stop a business in its tracks. When disaster strikes, smart businesses with a plan in place will ultimately fare better than those without one.

The unexpected is always a possibility. Last year alone, the U.S. Small Business Administration (SBA) approved 2,200 business disaster loans for a total of $362 million. After Hurricane Katrina, the SBA doled out over $10 billion in disaster loans.

Take care of your business today by becoming prepared for what could potentially put you out of business. "If you prepare, then there is a chance you can open up afterwards," says Bailey.

What can you do to be prepared for what may come? Read on for tips from disaster experts and those who have learned from experience.

ACCEPT THE POSSIBILITY

"People don't want to think about loss of life and destruction. Most people think it's never going to happen to them. But, it can," says Carol Chastang, an SBA public affairs specialist who works with the office of disaster assistance.

This disaster expert suggests that even having a basic plan in place can save businesses from a lot of grief in the end. Community Eye Center's Bailey says his office, which is located in a hurricane-prone area, has had a disaster preparedness plan in place for many years. "Once a year, you need to think about it and make sure you have a disaster plan and preparedness kit," says Bailey.

Keeping the building intact is key, he says. "You need to keep the windows from breaking, keep the roof on, keep the rain and wind out, and keep the moisture out, or it's going to destroy the contents," he says.

A DATA DISASTER?

One of any business's most important assets is patient records and other data like inventory. For those who have not done so already, experts suggest switching all paper records over to electronic files.

Once this system is in place, making daily data backups standard operating procedure is recommended.

"We do a triple backup where we take one tape off-site, one stays here, and the server is backed up remotely to a server farm," says Travis Adlington, OD, owner of Adlington Eye Center in Reno, Nev., which was recently hit by an earthquake. "It's not that expensive and well worth the peace of mind," he says.

The SBA's Chastang urges businesses to store all data off-site, not just patient records. "Financial data, tax data, information on customers, inventory records, title records, insurance—all that stuff has to be stored off-site," she says.

INFORMING PATIENTS

One of the toughest challenges after a disaster is communicating with your patients. Bailey reached out to his customer base by announcing on the radio when Community Eye Center would reopen. Others turn to the newspaper or their own website to broadcast this message to patients.

McDonald sent a letter to patients notifying them that she was not going to return to practice. "We told them their charts were at Tulane University, and explained how they could obtain a copy," she says.

ECPs will also need to communicate with suppliers on incoming orders and replacement items. Many vendors will have detailed records of your previous orders on hand.

INCOME CHALLENGED

When an eyecare business is shut down due to a disaster, the owner—and staff—can also face serious income issues. "I did not practice medicine for 11 months," says McDonald. "All of the ophthalmologists in New Orleans were hemorrhaging money—no patients, no staff, no income."

The SBA recommends that small businesses invest in business interruption insurance for just such tough times. "It is a working capital loan, covering operational expenses if you have to shut down," says Chastang.

INSURANCE IS KING

The essential item for every business is, of course, property insurance. But oftentimes, flood or earthquake insurance is not a part of the package. "Businesses need to understand exactly what is covered," says Chastang. "Don't assume it's covered. The majority of disaster loans the SBA makes each year are for those who have suffered damage from flood."

In the end, it will be your preparedness that will determine your future if a disaster hits your business area. "In this economy, it would only take a small disaster to knock a business out. If you have a plan in place, you can be back up and running much more quickly," says Chastang. EB