Business owners and executives don’t naturally see their role in a community’s disaster preparedness effort. While local government has the legal responsibility to address disaster risks and make emergency management plans, a business owner or executive’s busy schedule will dictate their minimal involvement with a business continuity plan. In the event of a disaster, local government cannot act alone in addressing all the needs of the community, particularly those of an economic nature, and will rely on the private sector’s resources. They need the business community to be involved in planning for and responding to emergencies.
- The public sector will make emergency management decisions that will have a direct consequence on local businesses - In the event of a disaster, emergency management plans, prepared far in advance of a major catastrophe, will be put into action. Those plans are likely to discuss issues such as business re-entry, access to property, etc., which impact local businesses ability to respond and recover. Changes to or awareness of these emergency response plans should occur before a disaster impacts the community.
- Most small businesses lack a business continuity plan -Many small business owners do not think their business will be impacted by a natural disaster. Yet, the National Federal of Independent Businesses (NFIB) had the the Gallup Organization poll small-business owners on disaster impacts to their business operations in 2004, and found that at least 30 percent of the surveyed businesses had been closed 24 hours or longer at least once within the last three years.
Many small businesses lack a plan which helps them think through the issues that can disrupt their business, plan steps to limit the effects from identified potential hazards, and identify critical processes or operations to remain open after disaster impact. Many small businesses fail to back-up important documents such as legal information, key customer contacts, financial records, etc. in a remote location. The U.S. Bureau of Labor Statistics reports that 93% of businesses that suffer a significant data loss are out of business within five years, so backing up and storing data off-site is very important.
Involving the business community in the preparation process at an early stage will help to ensure their specific needs are addressed in emergency plans and increase their resilience to the disaster’s impact. The following are practical suggestions to effectively engage local businesses representatives in activities that not only will protect their business assets but also expedite the recovery of the local economy in the event of a major catastrophe.
Step 1: Build an Economic Recovery Response Team
Pre-disaster planning becomes a critical element in the success of long-term economic and community recovery. A well-structured economic recovery team should be established before a disaster hits to specifically address the major post-disaster economic recovery issues that a community may face. This is necessary since most emergency management plans overlook the economic recovery piece as they are primarily concerned with health and public safety issues. This team can review emergency plans from the lens of the private sector, discuss post-disaster issues and redevelopment priorities, and take steps to pursue mitigation strategies.
Step 1a: Identify who from the community should participate
A mix of strategic representatives should be invited to participate in the economic recovery team. This should include economic development stakeholders (EDOs, chambers of commerce, business & trade association, special districts), public and elected officials (including emergency management personnel) as well as a significant representation of the business community. Otherwise decision-making on economic recovery topics is left to non-business, and potentially inexperienced, individuals. Even a well-intentioned public official may not understand the scope of economic impacts with the seemingly simple decision of closing a few streets. That one decision can slow recovery, force businesses to relocate or close, and drive residents and customers away – thereby affecting the available workforce and economy.
Private and public sector involvement on this team will ensure that communication flows between these two groups to reveal any potential conflicts and/or duplication of effort in the recovery process. The public sector is better informed of their decisions that could delay the recovery effort and is informed of the private sector’s priorities for re-investment and redevelopment. Trust is built as these stakeholders cooperate in the pre-planning phase so that these relationships can be relied on when the disaster strikes, and there is need for an expedited decision making process.
The team should select the appropriate leader who has an articulated position of authority to provide proper support to the team; someone who understands the needs of the private sector and can facilitate participation from all representatives. His or her role will be to establish agendas, facilitate discussion and information exchange within the team, delegate tasks and follow-up, and evaluate group objectives and outcomes.
Step 1b: Review comprehensive emergency management plan and/or mitigation plan for your jurisdiction for consideration of economic and business impacts
The Economic Recovery team will need to thoroughly review existing emergency management and mitigation plans that exist. The review should consider the impacts to the business community and the local economy if the plan is implemented after a disaster. These plans will also identify a potential partner or strategic player in the planning process. If possible, adjustments should be made to the plan so that it accommodates business interests.
The economic recovery team should also consider reviewing and advising on changes to the following plans relevant that would be considered in a rebuilding/recovery phase after a disaster:
- Economic Development component of a Comprehensive Plan
- Economic Development Strategic Plan
- Community Economic Development Strategy (CEDS)
- Capital Improvement Plan
Step 2: Discuss the roles and responsibilities for EDOs and Chambers
The role of EDOs and chambers of commerce will vary based on the economic development structure of your community. Each EDO and chamber has their own network of community stakeholders that should be engaged for information dissemination purposes.
Step 3: Hold meetings to discuss post-disaster economic recovery strategies
Find the appropriate location and begin working on a bi-monthly or quarterly bases to identify possible economic redevelopment and recovery strategies in the event of a disaster. IEDC has developed a series of recommendations for conducting such a planning effort for economic preparedness.
Step 4: Information Dissemination on Disaster Preparedness for Businesses
EDOs and chambers should consider holding a workshop and/or webinars to disseminate important disaster-related information such as business interruption insurance and business continuity planning. Careful thought should be given to a convenient time, location, and format of the event as well as appropriate promotional efforts so the maximum number of small business owners will participate.
Step 4a: Provide Training on Business Continuity Planning to Local Businesses
Businesses, both large and small, need to regularly execute a comprehensive situational assessment of what organizational processes and procedures will be affected by a disaster. While large firms have the resources to hire staff to focus on the company’s business continuity plans, the small business owner is typically overworked and has limited time to devote to the subject. EDOs and Chambers should encourage business owners to plan for resiliency in the event of a large disruption through the provision of free workshops and/or webinars that provide some simple steps that small businesses can take to ensure continued operations in the event of a disaster. This training should consider the fact that small business owners have limited time to engage in such activities.
Step 4b: Approach financial institutions and/or Insurance companies to provide incentives for disaster preparedness
EDOs and chamber should consider approaching financial institutions and insurance companies about interest rate or insurance discounts for local businesses that successfully perform disaster preparedness activities so as to influence local business involvement in these efforts. These discounts provides a financial incentive for local business to engage in disaster preparedness activities (business continuity planning, employee training, mitigation, data back-up, etc.), which will speed recovery. The training should address whether businesses can afford to take out insurance in the current recessionary environment.
Step 5: Establish a Tiered System of Re-entry with Critical Businesses in Consideration
Once a disaster strikes, one of the great hindrances in the community’s ability to recover is the delay in granting individuals access safely back into to their community, including local businesses. Business owners may be restricted from returning to their property/operations depending on the nature of the incident. The longer the re-entry delay, the more devastating the effects on the community; thereby extending the recovery time. In the process, these businesses lose their inventory (if perishable), employees who move on to find alternative work, and their customer base. As an example, 60% of the businesses within the police perimeter of the 1995 Oklahoma City bombing closed permanently (even those without physical damage) due in part to limited or no access to the area following the event. These business closures translate into limited or no essential services and products (grocery, gas, daycare, health services, etc.) in the local impacted area, but also decreased employment opportunities for residents and a significant decline in the tax revenue base.
To respond to this issue, many city and county emergency management personnel have developed a tiered system of re-entry following a wide-scale evacuation. The purpose of this tiered system is to allow for the safe, orderly return of community members, such as emergency responders, critical service providers, relief workers, businesses and citizens, and to facilitate a timely response to the disaster. It essentially works as a credentialing program with ID cards or passes for individuals and businesses as well as training for local law enforcement to recognize the cards/passes and allow access when the appropriate ‘tier’ is activated. These passes don’t guarantee re-entry but are used as a tool by law officials to expedite the return of critical personnel.
Many communities have established a tiered re-entry system to give the following re-entry priority:
- Tier 1: The first tier is commonly reserved exclusively for re-entry of agencies/groups involved in emergency response and restoring normal operations following a disaster: search and rescue; emergency healthcare staff; utilities and infrastructure repair personnel; damage assessment teams; and pre-designated government staff. In the case of Jefferson Parish (near New Orleans), they also allow access to credentialed businesses and industries whose facilities pose a public safety concern, environmental threat or substantial danger.
- Tier 2: The second tier is limited re-entry for other important groups which can include: relief workers; healthcare agencies and suppliers; insurance agents; business operators such as important food and building material retailers, fuel distributors and stations, debris management, financial institutions; and select businesses with unique circumstances (fragile inventory, hazardous waste, large workforce, global distribution, etc.)
- Tier 3: The third tier is more open access for re-entry of all remaining residents and business operators (not allowed under tier 2) that can prove they live, own, rent, or lease in the restricted area; licensed contractors and other repair service providers; and possibly family and friends who re-enter with an eligible resident.
This tiered re-entry system will facilitate timely re-entry of critical businesses to assist in the community’s recovery effort. Without a re-entry plan, the local economic recovery engine will be severely hampered at a time when the community needs this engine to be available. Preparing a tiered/phased re-entry system assists community stakeholders in administering recovery efforts in a more timely and organized manner.
The following are several examples of a tiered re-entry plan which accommodate business re-entry needs:
- Jefferson Parish’s Re-entry Plan
- The City of Palmetto’s Re-Entry Program
- Terrebonne Economic Development Authority’s Badge Distribution Plan
Step 5A: Review Community’s Emergency Management Plans and Incorporate Business Needs in Re-entry Plan
The local economic development organization (EDO), chamber or business association should start by reviewing the community’s emergency management plan to better understand if the process for re-entry after a major evacuation provides priority re-entry for critical businesses. As discussed above, these critical businesses include businesses needed to restore infrastructure, provide sustainable living conditions, and play a vital role in jumpstarting the local economy.
Working proactively with the business community in advance of a disaster is important for making the re-entry plan relevant to business needs. The EDO should seek to either persuade changes to the existing plan or in its absence help to create a tiered re-entry plan with business considerations. Partnering closely with emergency management and local law enforcement personnel to garner support of this plan will help to ensure its adoption by the public sector.
There should be clear procedures of securing a re-entry ID cards or passes such as requiring that only business owners, operators, and managers apply for such cards/passes for their employees. In Terrebonne Parish, Louisiana, the Terrebonne Economic Development Authority (TEDA) partners with the Terrebonne Parish Consolidated Government to coordinate re-entry pass distribution to all businesses requiring Tier 1 and Tier 2 clearance in the parish. TEDA is responsible for crafting Terrebonne parishes re-entry plan as it relates to businesses so that the plan includes the prioritizing critical businesses which will restore essential services after a disaster. Jumpstart Jefferson is a website for qualifying businesses to apply for a re-entry vehicle pass, learn about the parish’s evacuation re-entry plan and get connected into a business continuity network (a main point of contact for businesses and clients in the event of an evacuation).
Step 5B: Identify Critical Employers for the Community’s Re-entry System
The economic development organization (EDO) or chamber should pro-actively identify and recruit the appropriate local businesses to apply for priority re-entry in the community after a major evacuation. Staggering business re-entry after a disaster when conditions on the ground include damaged infrastructure (roadway, sewer, water and electricity lines) allows officials to do their response and recovery business in a safe manner. Once safety concerns are addressed, business operators with legitimate and vested interests in the community should be allowed to quickly return to secure their property and re-establish business operations. This will help to ensure the local community recovers from the disaster’s economic damage as quickly as possible.
Develop criteria for priority re-entry for critical businesses: The EDO or chamber needs to be able to assess which businesses should be considered essential to the future return of residents and the economic vitality of the community. This may include financial institutions, business anchors for key industries, employers with a large workforce, and/or a major tax revenue source for the community. The Terrebonne Parish’s EDO has developed a Badge Distribution Plan which includes clear guidelines for identifying critical employers for re-entry. The plan indicates which businesses qualify for each re-entry tier based on the type of specific service(s) they provide in disaster response and recovery).
Survey businesses to identify business disaster response capabilities: It is recommended that the EDO or Chamber conduct a business survey using the various local business networks to better understand the services that local businesses provide and the type of equipment they have on hand in the event of a disaster. On the re-entry badge application, Terrebonne Economic Development Authority (TEDA) asks each business to list their capabilities, essential services, and equipment so they have this critical info on file. Any preparation activities to obtain this information before a disaster will place the EDO or chamber in a better position of disaster response. Local government also should make sure they are working closely with these business intermediaries to effectively communicate and educate local businesses on the process for obtaining a re-entry badge or pass and other preparation activities.
Step 6: Educate Business Community on Contracting and Procurement Opportunities for Disaster Recovery Services
As mentioned above, the local EDO or chamber of commerce should be surveying businesses to identify which local businesses have disaster services capabilities and equipment to be used in cleanup, debris removal, emergency response, as well as long-term rebuilding efforts. There may be subcontracting opportunities with FEMA’s primary contractors in the disaster response process. The local EDO or chamber should educate local businesses on governmental bidding and procurement rules and procedures so that they can pursue an opportunity. This not helps to preserve jobs in the local community during a difficult time but allows local businesses to participate in their own community’s cleanup and response process.
In the event of a disaster, local governmental officials working directly with FEMA officials should seek to identify disaster response subcontracting opportunities, which could possibly be made available to local businesses. The local EDO and/or chamber should disseminate this information to appropriate businesses, as well as assist businesses in becoming pre-qualified for lines of credit to expedite their ability to take on contracts quickly.
- The Institute for Business and Home Safety’s DisasterSafety.org has free resources and information on business continuity planning for the small to mid-sized business with 13 forms and a property protection checklist.
- The Florida Business Disaster Survival Kit was created by the Tampa Bay Regional Planning Commission to assist local business community in business continuity planning, hazards analysis and response, recovery and mitigation, and other preparedness resources.
- Ready Business was created to educate and empower individuals, small businesses and interested parties to prepare for and respond to emergencies. This resource is focused specifically on business preparedness.
- Sungard provides a number of free publications and case studies at their Knowledge Center on disaster preparation subjects such as business continuity planning, cloud computing, and data management.
- State Ready Business Programs:Alabama, Be Ready Alabama; Florida Disaster; Ready Georgia; Kansas Ready; Be Ready Utah: Ready Your Business
- SBA & Nationwide Insurance’s Small Business Preparedness Guide helps business leaders better handle a disaster situation. This guide provides common-sense solutions to protect assets.
- Prepare My Business is an SBA website that provides small business resources for disaster and business continuity planning and testing, as well as to provide free educational resources on key topics to reduce your business’s risk and quickly recover following a disaster situation.
- Community Resilience and Rapid Recovery of the Business Sector by Mary Graham at Charleston Metro Chamber of Commerce provides practical ideas for how business stakeholders should play a more active role in disaster recovery planning, business continuity planning, and response at the community’s emergency operations center after a disaster.
- Business Continuity Information Network is a web‐based service where local businesses, county emergency management, and organizations that assist businesses can gather to share critical information and support continuity efforts before, during, and after a disaster.
- Disaster Preparation and Business Continuity Planning is a resource developed by the Central Florida Development Council that provides business continuity planning assistance, including resources on planning before, during and after a disaster.
- The State of Florida’s Business Disaster Planning website will better prepare a business for future disasters by assisting them in creating a Business Disaster Plan.
- The Association of Business Contingency is the national association for business continuity professionals providing networking opportunities and a learning environment of programs, workshops and symposiums in the field of business continuity, disaster recovery, and emergency response.
- New York University’s International Center for Enterprise Preparedness White Paper on business preparedness and insurance incentives.
- The Preparing a Businesses for a Pandemic course will assist small and medium-sized businesses in surviving a potential pandemic including the importance of business planning, communicating regularly with employees, and helping employees deal with a severe pandemic.
- Business USA provides information on a wide variety of opportunities for small business to compete for government contracts, including a list of state and federal procurement agencies, information on how to register as a contractor and bid on opportunities as well as the rules and regulations that state and federal contractors need to follow.
- Florida Atlantic University’s Public Procurement Research Center provides online classes in public procurement while earning college credits at either the undergraduate or graduate level.
- Agility Recovery Solutions provides business continuity and recovery strategies, consulting services and testing options to businesses across the United States and Canada.
- National Federal of Independent Businesses (NFIB) hired the Gallup Organization in 2004 to poll small-business owners about whether specified types of natural disasters impacted their business operations in the last few years. The findings concluded that at least 30 percent of the 750 surveyed businesses had been closed 24 hours or longer at least once within the last three years. Almost 25 percent of those that had closed their doors were due to tornadoes, hurricanes, wind storms or floods, while 20 percent were due to blizzard or extreme cold conditions. Click here for more details on the survey results.