Business owners are strongly encouraged to make contingency plans for responding to and recovering from disasters that may befall them. Analysts note that disasters – whether they take the form of floods, fires, or power outage – can have a devastating impact on a business’s viability. 

Business experts also insist that the importance of a good disaster and recovery plan has never been as acute as it is today, in large part because so many businesses rely on vulnerable technology (communication networks, management information systems, process control systems, etc.) to execute fundamental business operations. It is essential that businesses take the time and effort to construct comprehensive disaster and recovery plans if they hope to weather unwelcome interruptions in business operations in good financial and market condition.

It is not easy to recognize the hundreds of hazards or perils that can lead to an unexpected loss. For example, unless you’ve experienced a fire, you may not realize how extensive fire losses can be. Damage to the building and its contents are obvious, but you should also consider: smoke and water damage, damage to employees’ personal property and to others’ property (e.g. data-processing equipment you lease or customers’ property left with you for inspection or repair) left on the premises; the amount of business you’ll lose during the time it takes to return your business to normal; the potential permanent loss of customers to competitors.

Of course, many other types of disasters can strike a business as well, ranging from those triggered by natural events such as floods, tornadoes, earthquakes, or hurricanes, to those that come about as a result of localized environmental problems, like water main breaks, work force strikes, power outages, hazardous material spills, explosions, and major transportation mishaps (aircraft crash, train derailment, etc.). In addition, damage that is the direct result of premeditated human actions such as vandalism, sabotage, and arson can also be classified as a disaster.

The first step in creating a strategy (or reviewing existing contingency plans) to protect a company from these and other events involves mustering the necessary business will to undertake the challenges associated with the task. However, business observers contend that many companies fail in this regard.

The fact is that the majority of private-sector management is still reluctant to allocate the necessary time, staff, or funds to prepare and plan for the possibility of a disaster that may cut them out of business. This tendency to give short shrift to disaster planning is a common one. When the economic climate is favorable, contingency planning is last on the list of things to do; when profits are down, contingency planning is the first item to be cut from the budget.

Business owners, then, need to make sure they devote adequate resources to disaster preparedness and recovery planning before beginning the process. The contingency efforts are ultimately doomed if they are undertaken without top  management commitment, involvement, and support; participation of front line managers and staff teams in both planning and implementation; and ongoing communication with all constituencies of the business.

Once the business leadership has decided to invest the necessary time and effort into the creation of a good disaster preparedness and recovery plan, it can proceed with the following steps.

  1. Determining Vulnerabilities 

Begin the process of identifying exposures by taking a close look at each of your business operations and asking yourself what could cause a loss. If there are dozens of exposures you may find dozens of answers. Many business owners use a risk analysis questionnaire or survey, available from insurance agents, as a check list. These questionnaires will typically address the business’s vulnerability to losses in the areas of property, business interruption, liability, and key personnel, among others.

Obviously, this component of disaster preparedness planning – often referred  to as risk management – needs to be comprehensive, covering all aspects of business operations, including telecommunications, computer systems, infrastructure, equipment, and the facility itself.

Gathering Information

The process of creating a disaster planning and recovery strategy is, in reality, the result of determining the organization’s goals and objectives for business continuation – the ability to deliver its goods and services in the as-intended manner, utilizing its as-intended process, methods, and procedures – whenever any out-of-course event might impair, impact, impede, interrupt, or halt the as-intended workings and operations.

A disaster planning and recovery strategy is not a method; it is a medium to sustain the organization. With this in mind, businesses should make an extra effort to solicit the opinions of all functional areas when putting together a disaster and recovery plan. 

Facility management areas may be most knowledgeable when it comes to the vulnerabilities of computer systems, office areas, etc., but other areas can often provide helpful information about the areas of the business that most need protection or fall-back plans so that the business can continue to operate in the case of a disaster.

Reconciling Findings with Principle Objectives 

All businesses should be concerned with meeting certain fundamental goals of disaster prevention, safety, and fiscal well-being when working on contingency plans. Analysts offer largely similar assessments of priorities in this regard, although minor differences in nuance and emphasis are inevitable, depending on the industry, the size of the business, and the viewpoint of the analyst. Most experts agree, however, that the primary objectives of a good disaster response plan should include:

  • Preventing disasters from occurring whenever possible (through use of annual reviews, disaster prevention devices such as fire detectors and alarm systems, and physical access control procedures).
  • Containment of disasters when they do occur.
  • Protecting the lives, safety, and health of employers and customers.
  • Protecting property and assets.
  • Establishing  priorities for utilization of internal resources (such as manpower, talent, and materials)
  • Providing an organized response to a disaster/incident.
  • Minimize risk exposure and financial loss (disruptions to cash flow as a result of canceled orders, etc.) through alternative procedures and practices.
  • Prevent a significant long-term loss of market share.

Disaster response strategies will vary from business to business, but in the final analysis, they should all be structured in ways that will best ensure that essential business functions can be maintained until operations can be returned to normal.

Communication of Plan

Disaster contingency plan should be widely disseminated throughout the company. All employees should be cognizant of the business basic disaster plan, but this is particularly important for managers, who are often called upon to make important operational decisions in the aftermath of crisis events.


This final stage of contingency planning is concerned with returning the business to its pre-disaster competitive position (or at least returning it as close to the position as is possible) and normal business operations in the event that a crisis event does take place. This entails restoring productivity in three primary areas: people, information, and facilities.

People are the priority. You need to account for them physically and emotionally, and enlist them in your recovery efforts. Contact each employee personally; don’t be satisfied with an answering-machine connection.  

Restoring technology is critical for two reasons. First, most companies rely on technology to conduct day-to-day business. Second, technology may represent your only means of giving your employees, customers, and the media important information as soon as they need it. Finally, while information and employees are portable, facilities are not. Central facilities – mailroom, copy center, file room – need to be restored immediately. Office space is often on the critical path to people and information; without it, nothing else can happen. 

Business owners should ensure that safe practices are followed when searching for and conducting operations in temporary locations.

The recovery stage is broken down into two elements: First is the aspect of planning concerned with providing the resources for recovery. This encompasses the resources of a workplace, equipment, facilities, power, communication capabilities, information and data, forms and other supplies, people, food, lodging, transport, and all else that enables the business processes to continue or to be re-established – within the planned time-line basis – after being impeded, impaired, interrupted, or halted.

The other aspects of the recovery phase is concerned with impact, consequence and affect mitigation, and damage restoration requisite for the return to as-intended functioning.

If you find this article useful, please share and subscribe to our newsletter.

Bernard Taiwo

I am Management strategist, Editor and Publisher.

Next Post


Tue Apr 5 , 2022
METHODS OF ACHIEVING ECONOMIES OF SCOPE Economies of scope are cost advantages that result when firms provide a variety of products rather than specializing in the production or delivery of a single product. Economies of scope also exist if a firm can produce a given level of output of each […]

You May Like

Chief Editor

Johny Watshon

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur