e've seen the news reports of the devastation caused by Hurricane Katrina; it is overwhelming. For many of us, our first reaction was sympathy and compassion for those in its path. We probably thanked whatever higher power we believe in for sparing us a direct hit from such a catastrophe.

As you watched the coverage you probably thought, "What would I do if I had to flee my home? What would I take with me? What would I do if communication lines were down? How would I survive without transportation?"

If you are a business owner, you have even more questions: "What would I do with my business in that situation? How would my livelihood survive? How would I communicate with my clients? How would I find my employees? What would happen to my documents, contracts and files? Could I still support myself?"

As every American knows by now, being prepared for a catastrophe might save lives, as well as valuable time and resources. Not being prepared might cost lives and cause even greater anguish.

What are you doing to prepare for a disaster, natural or otherwise? When was the last time you reviewed your disaster recovery plan? Is everyone who might be affected aware of the plan?

Do you even have a plan?

Know Thy Enemy

What types of events might be harmful to your business? The risks are different depending on a number of variables including the type of business you own, where in the country the business is located and whether you conduct business in a home workspace or an office building.

Some examples of events for which we can prepare are natural disasters, such as a flood, fire, earthquake or tornado. Other risks include assaults from others, such as a terrorist attack, burglary or other malicious attack.

Events do not have to occur on a grand scale to be catastrophic to your business. Even a thunderstorm could flood a business and cause electricity outages. Perhaps something as isolated as a burst pipe could bring your business down. These seem small, especially considering the devastation often brought by a hurricane, but they can still bring your business to a standstill.

Note that a disaster does not have to directly affect your business to put your livelihood in peril. If it affects your suppliers or customer base, it might also adversely affect your bottom line. Where will you get your inventory? What if your customers go out of business and no longer need your services?

Creating a Plan

Now that we know a disaster recovery plan is vital, it's time to create a plan to protect your business should disaster strike. The Institute for Business & Home Safety and the U.S. Small Business Administration offer a wide range of guidelines to help plan for disasters. Following are a few of the guidelines:

1. Maintain a backup site at least 50 miles away from your business. Make sure those in leadership roles know the address, phone number and e-mail address for the facility, as well as any passwords or required security clearances.

2. Make backup copies of all records, boot files and software. Keep one copy onsite and another at the offsite location. Make sure these files are backed up regularly, ideally daily.

3. Develop a backup plan for your physical office space. Determine where you will go if your workplace is uninhabitable or inaccessible. Perhaps you can use a home office or lease space at another location. Designate a location to store equipment and supplies.

4. Review your insurance policies. Know what is covered and what is not covered. Determine if you will need replacement coverage for facilities or inventory. Most policies do not include coverage for flood damage, windstorms or earthquakes. Determine if you wish to add riders to the policy. Once a year review the policy and make any changes necessary to reflect changes in your business.

5. Designate a predetermined meeting place for employees should disaster strike. There should be one in the neighborhood and one out of the region. Make sure each employee has the address and phone number of the site. Also, create a telephone tree to rapidly contact employees in an emergency.

6. Purchase a generator.

7. Place surge protectors on all computer and phone equipment. Invest in a surge protector with battery backup.

8. Pre-arrange to have computer vendors quickly replace damaged computers and peripherals if needed.

9. Even if you aren't directly hit by a disaster, your partners might be. Have backup vendors and shippers in place in case your partners are unable to meet your needs.

10. Even if you aren't directly hit by a disaster, your customers might be. Work to diversify your products and sales locations so if a region is hit with a crisis it doesn't bring your business to a halt.

Simple Steps

Some steps of preparedness cost very little. They only require time and forethought. For example, prepare lists of important contact information and keep copies at your place of business and offsite facility. Following are some suggestions of the types of information to include on the list:

Employees: Have a list of each employee's name, date of birth, Social Security number and any important medical concerns. Each employee should have two emergency contacts: one in state and one out of state.

Emergency agencies: Make a list of local fire departments, police, ambulances, hospitals, etc. Include addresses and phone numbers. In a disaster, you might not always be able to rely on 911.

Utilities: Create a list of your utility companies and their phone numbers. In the event of a crisis they might need to turn off gas or power to ensure safety.

Insurance: Be sure the contact information for your insurance carrier is accessible. Include the company name, contact name, policy number and effective dates of policy.

Creditors: Make a list of all the business's creditors you will need to contact in a catastrophe. Include bank name, address, contact name, phone, fax, e-mail and account number.

Suppliers: Create a list of your suppliers and what they supply. Include their name and contact information, as well as the contact information for an alternate supplier if your main supplier is affected by disaster.

Customers: Create a list of your key customers including the business name, address, contact person and account number. Include the name of someone to whom you can refer them should you be unable to meet their needs.

Inventory: Create an inventory of your hardware, software and peripherals. Include serial and model numbers, date purchased and cost. Also include the name and number of whom to contact for repair or replacement.

Maintain the Plan

A plan is only as good as its execution and maintenance. Therefore, it is very important that everyone involved know what to do to keep the plan current. Designate employees to make sure files are being backed up, surge protectors are in use and contact information is up to date.

Meet with employees at least twice a year to review the emergency plans. Keep master copies of the plan and backup data offsite and onsite. Maintain an audit trail so the most current version of the plan is clear.

It is estimated that 43% of businesses go out of business following a local disaster. The good news is there are resources to help you prepare for disaster so that when faced with a crisis you respond in the most effective way to save your business.

A few helpful resources are:

• Institute for Business & Home Safety
• (www.ibhs.org/business_protection)

• U.S. Small Business Administration
• (www.sba.gov/library/pubs.html)

• Federal Emergency Management Agency
• (www.fema.gov/library/prepandprev.shtm).

Now is the time to act and prepare for something you hope will never happen.