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Does your business have a disaster recovery plan for a natural disaster?

Monsoon floods and landslides have a catastrophic impact on Nepal every year. Unfortunately, as of August 20, over 75,000 families have been affected by the flooding this year. Thousands of humanitarian projects and volunteers are actively working to provide supplies and implement rescue operations. The Initial Rapid Assessment (IRA) is being conducted in all affected districts. Although such natural disasters get a lot of immediate attention and emergency relief in our country, longer term support to the affected regions is often lacking. There are many businesses that are severely affected by these calamities to the point where they fail to recover. For instance, over 500 industries have already been shut down due to the flooding this year. The industrial region in the Tarai belt is the backbone of the Nepalese economy and the economic repercussions of these affected industries failing to recover can be severe for the national economy. This slows down the overall progress of the region because community resilience and business resilience are interdependent. Though natural disasters have catastrophic impact on businesses of all sizes, trends suggest that usually the impact on small businesses is most severe.

Whether you have a Disaster Recovery Plan or not, assessing a disaster’s impact on your business is a good starting point. Here are some critical factors to consider while assessing the impact of a natural disaster on your business:

Disaster’s impact on your company’s clientele, stakeholders and employees

For a thorough assessment of the impact of a natural disaster on your business, you can conduct a post-disaster SWOT analysis. You can communicate with your customers about reopening the company and taking new clients and orders. You can also explore options to provide financial or psychological assistance to your employees if needed and consult with them about strategies for speedy recovery of the business.

The extent of financial resources

For the evaluation of the financial resources that are lost due to the disaster, you can start by assessing the level of physical damage and destruction of property. You can estimate the value of total and partial destruction of infrastructure, inventory, assets and the value of changes on service delivery.

Elephants being used to rescue tourists stranded by the floods in the tourist resort town of Sauraha, Chitwan.

Assessment of data and information loss

A company’s survival is not necessarily dependent on the level of physical damage suffered. Thus it is crucial to assess the of loss data, bills, receipts, and official documents. Even though monetary value is not assigned to the data, loss of it can severely hinder your business.  There might be data that are recoverable but would require considerable time to restore so it is recommended to start the data recovery process as soon as possible.

Availability of substitute services and alternative resources

You can talk to suppliers and distributors as you might need to source new suppliers or develop new relationships with alternative suppliers. You can use social media to reach out to potential clients and update your website regarding the current status of your business to seek alternative resources and services. To re-establish premises, you can consider working from home or if you are relocating, you can use your negotiation skills to have flexible terms and reduced rates for leasing a new premise.

Company’s ability to adapt to new business environment

Companies that try to reopen and conduct business as usual have a higher risk of failure due to their unwillingness to adapt. Disaster resilience patterns show that small businesses that readily adapt to changed environments are more likely to succeed in their business recovery process. Therefore be flexible and open to adjusting and making changes as per the need.

Need for professional guidance

If you are having difficulty assessing the impact and rebuilding the business on your own, you can explore available funding and financial resources to engage mentors, coaches and business consultants to assist in the business recovery.

The best way for your business to cope with a natural disaster is to have a plan before the disaster strikes. One of the biggest reasons for the vulnerability of small businesses is that the owners often do not have a disaster recovery plan, which makes it harder for businesses to survive and strengthen resilience.

Following are some factors to consider if you are preparing to create a disaster recovery plan for your business:

Review Operations

A natural disaster’s impact might make it difficult to measure company operations. Therefore it is recommended that you review your operations regularly by consulting with business advisers to make improvements on the way your business is being run.

Evaluate Risk

Many operators of small businesses are not aware of the risks that they are exposed to. Risk is associated not only with hard assets, such as building or machinery, but also with revenue, customer loyalty, and investments in projects. It is a measure of potential economic loss, lack of return on an investment or asset, or material injury. It is important to evaluate and understand potential risks in order to plan effective strategies to protect one’s company and minimize damage from natural disaster.

Digitize Information

Loss of data and official documents is a huge business risk to companies because often times extreme data loss can cause organizations and businesses to fail.  Make sure to keep all the data and information digitized for efficient processing, transmission and storage. Ensure that you use cloud backup for data protection. The goal of data protection is to create an environment that shields against all types of disasters.

Consult with your bank

Consult with your bank regarding arrangements in case of natural disaster and discuss alternative solutions in case you are unable to make repayments.

Insure your business

It is difficult for many small businesses to recover after a disaster because they do not have an insurance. You can explore available options for insurances which cover the loss of income that a business suffers after a disaster and insurances that cover property, infrastructure, and other physical damage to the business.

In our country, natural disasters like flood and landslide have been recurring and they have massive impact on communities and their businesses every year. On top of this ongoing struggle, Nepal faced enormous loss due the earthquake in 2015, which has made it particularly difficult for several businesses to build and strengthen resilience. Biruwa itself suffered severe consequences of the disaster and is still trying to cope with the impacts. Although it has been a lesson learnt the hard way, Biruwa today is stronger, more resilient and more prepared than ever. Natural disasters are an unfortunate part of life and though one cannot control the occurrence and the severity of these calamities, today is always a good day to engage in recovery processes and start being better prepared for the future.


1 Comment

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