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What if your customers went away for a month – or more?


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The storm surge is the most devastating element of a hurricane. Everybody knows that.

But that maxim was compromised when Hurricane Harvey’s surge onto the Houston area lowlands became just an opening act. For days, Harvey hovered over almost a dozen counties in the region, causing decisions by local watershed officials to transmogrify more than 50 inches of falling water into a rising-water flood that dwarfed the storm surge. Millions of homes, cars and jobs were lost.  

Of course, that last stat – when customers are displaced – partially explains the disruption of more than 3,000 businesses. And the lost opportunity cost is incalculable if for no other reason than that hundreds of small businesses will never reopen. Of course, since this wasn’t Houston’s first hurricane, it must be said that for people who live in coastal areas, being prepared for the next storm – or not – is a choice made in advance.  

As promised, this is a companion piece to the one that marked a 15-year anniversary, the Great Blackout of 2003. In the earlier article, I revealed how small businesses are reporting that they’re much more prepared today for a business disruption event than ever before.

Unlike a hurricane, the Great Blackout proved that even if you don’t live in a coastal region, a fire-prone area, tornado alley, flood zone, on top of the San Andreas Fault, or other natural calamity waiting to happen, every small business should operate as if you do. Because whether it’s a flood, a phishing breach, a hurricane, ransomware, or a lightning strike (what happened to me), it’s not a matter of if your business will be interrupted, it’s a matter of when and how badly. Consequently, your level of preparedness is a choice you make in advance.  

In order to help you develop a business interruption strategy, here are some suggestions for where to start:

Operational: What if your building became unavailable to you or your customers?

  1. Purchase laptop PCs with docking stations that allow key employees to work and connect remotely, both internally and with customers. Make sure they have both Wi-Fi and mobile modems for redundancy. This costs a little more, but it’s good connectivity insurance.
  1. Adopt applications in the cloud, in case installed programs become unavailable.

Financial: Most small business working capital is tied up in operating cash flow. What would happen if your cash flow was interrupted?

  1. Purchase a business interruption rider on your property and casualty policy that will pay you cash upon acceptance of a claim. Be sure to read the fine print – all policies are not created equal.  
  1. Maintain a close working relationship with your banker so you won’t have to introduce yourself to the person you’re asking for a disaster loan.

Data: More of your assets are now in digital form and less physical. Are you prepared to protect your data as comprehensively as your building, equipment, and inventory?

  1. Assign one person to be in charge of keeping all computers enabled with proven digital security and keep it current on all units.
  1. Regularly copy critical data from your hard drives and store it offsite, plus protect your data with a cloud-based backup and recovery firm.  

The only people who never experience a business interruption event are those who don’t have a business. As the CEO of your business, it’s your job to be prepared for the inevitable.

Write this on a rock … You operate your business in a dangerous world and it’s getting dangerous-er. 

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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