iStock 539207989 fire lgWhat if there were an extreme weather event that closed you down for weeks? Would you be able to keep information secure if you were targeted by a small-time cybercriminal or part of a large terror-related cyber-attack?

What if a fire damaged your building and the water used to suppress the fire-damaged your equipment so badly that you couldn’t operate? What if thieves stole your computers and servers or vandalized them beyond repair?

These events – which can be quite common – are why crisis management is important for every business, whether it’s a multi-national corporation or a small family business.

With these sobering facts in mind, we're going to teach you a little bit about the importance of crisis management for businesses, and help you start to make a plan of your own.

What is Crisis Management?

A crisis management plan is a set of carefully thought out processes and plans that are designed to manage a specific problem.

A crisis could mean a variety of different things for your business.

You may need to prepare for an extreme weather event that disrupts your business for days or weeks. A physical problem like a flooded server room or a big power surge could take out important equipment. [quotesright]A fire and its damage could take weeks to repair, even if it didn’t happen in your office. [/quotesright]

There could be a large data breach due to employee error or because of a targeted cyber-attack. You could even have a major health and safety incident that requires lengthy remediation or evacuation.

The right kind of crisis management plan doesn't just deal with the emergency response phase. There should be details on communication plans for the public and employees.

In cases of a catastrophe, you may need a contingency plan on how to continue to grow your business during a crisis and find new customers quickly.

A lot of crisis management planning will fall on key people in your IT department, C-level employees, and managers, but ultimately everyone in your business will have a role to play. This is especially true for small businesses.

The staff that isn't involved in the actual recovery work will need to be kept up to date on everything happening so they can effectively continue to work. The staff that's intimately involved in the plan will need to be trained to execute it as well.

Three Important Reasons to Have a Crisis Management Plan

You always want to be prepared but going through the hassle of making a crisis management plan may seem like too much for busy business owners.

After all, things have been fine for your business. You don't live in an area with a lot of extreme weather, your building maintenance is top-notch, and you don't see the need to cause any alarm.

After you read these three compelling reasons why you need a crisis management plan, you'll wonder how your business has gone so long without having one.

1. Predict Potential Threats

Before you can start preparing for a crisis, you'll need to spend time predicting potential threats to your business.

Taking the time to explore threats to your business can help you work to improve certain vulnerabilities before problems even occur.

If you find that you're particularly vulnerable to cyber threats, you can start training your IT team on the best way to secure your servers and data. Have them identify where your greatest threats lie and have them brainstorm ways to fix them.

You may find that your roof leaks and your walls take on water damage during periods of heavy rain or the inadvertent discharge of a fire suppression system. Discovering this can help you devise plans for how to make important repairs to your facility and identify other vulnerabilities or problem areas.

2. Minimize Damage

There's nothing more stressful or less effective than trying to stop a major problem without having any sort of plan.

When you're in damage and survival mode, you're not going to be at your best. You and your employees will be stressed, worried, and unable to think about the high-level strategy you need to fix things.

You're going to be looking for quick fixes that can stop problems in the present but may set you up for more problems in the future. Consider these possible scenarios:

The security patch you put through did protect your data, but you didn't think about how it would interact with your software. You found a way to pump the water out of your main area, but you don't know how to dry the carpets or salvage furniture. Smoke and moisture damage has made all your electronics and computers malfunction.

This is why it's always a good idea to have a plan in place before things go wrong. You'll have plenty of time to think about the best way to comprehensively fix everything that's wrong.

Giving yourself ample time to plan before a disaster can help you think about the best solutions to your problems. [quotesright]You'll avoid making careless mistakes and be taking positive action instead of frantically reacting. [/quotesright]

3. Protect the Future of Your Business

You never know what can go wrong after a true crisis affects your business.

It's possible that your revenue could take a hit for several months. Important employees may choose to quit or be unable to perform their duties. You may even need to find a new location for your company.

That is why you will need adequate cash reserves or borrowing capacity to deal with the substantial costs of a catastrophe. You may wish to look into special insurance policies to deal with a disaster.

A true crisis can have unforeseen problems that could jeopardize the future of your business. If you don't plan for emergencies, you'll put yourself and your employees in a bad place.

When you take the time to put together a crisis management plan, you secure the future of your business.

Beginner Tips for Creating Your Own Crisis Management Plan

Now that you know about the true importance of crisis management for businesses, we're going to give you some advice on how to create a plan of your own.

A true crisis management plan should be in-depth, easy for your employees to understand, and comprehensive enough to cover the most important facets of your business.

If you're ready to create a plan of your own, be sure to remember these important tips.

Do a Business Impact Analysis

A business impact analysis (BIA) is a helpful way to identify the impact an emergency disruption to your business can have.

There are a lot of problems that can occur because of an emergency. When you're going through your BIA for each crisis scenario you plan, be sure to think about factors like:

  • Potential reputation damage in the eyes of the public or employees,
  • Customer dissatisfaction or loss,
  • Delayed or lost sales and income,
  • Regulatory fines, and
  • Increased expenses (overtime labor, expedited shipping, etc.).

A BIA can help businesses see if they've truly considered every potential problem that can occur during an emergency. When you make a BIA part of your crisis management plan, you'll ensure that you're prepared for everything.

If you need help creating a BIA, has helpful paperwork that can get you started.

Divide and Conquer

[quotes]Don't leave crisis management up to one person or team at your company.[/quotes] Everyone should be able to contribute to the planning and execution of a large- or small-scale crisis management plan.

When you divide up responsibilities, you get plenty of perspectives and experience from employees across different departments. This can help ensure that your plan is comprehensive and hits on every important part of your business.

It also helps ensure that you'll be better prepared in case you ever need to put your plan in action.

If you leave everything up to one person or department, you leave yourself vulnerable for things to go wrong. A key-person may be out when an actual emergency happens, or a department may be stretched too thin to properly act.

Consider Outside Communication

Communication and awareness won't just be important for your employees, it's also critical for people outside of your organization.

[quotes]The last thing you want is for any of your customers or suppliers to find out about a problem through the media.[/quotes] This is why your plan should include information on the right way to communicate with key people outside of your organization.

Assign certain people in your company tasks that involve calling, emailing, or visiting people as soon as it's clear that you have an emergency on your hands.

Also, be sure to include helpful language to get your point across clearly and ensure that the message stays consistent for each person.

Practice Your Plans

Your plan may involve evacuating people or moving important equipment and paperwork to a new location. Doing all of this for the first time during an emergency can open you up to mistakes.

That's why it's a good idea to set aside time for practice drills.

Taking the time to run drills makes it easier for key personnel to clearly understand their roles. It also allows you to evaluate the effectiveness of your plan, fix problems, and find ways to improve it. You could find a new strategy that works best for your department or assign different responsibilities to people.

Get Advice from the Experts

Crisis management is important for businesses of all sizes. Predicting potential threats allows you to minimize damage during an emergency and helps you ensure the safety and security of your business. [quotesright]We recommend you consult with a disaster recovery consultant to make sure you’ve covered the bases and are protected. [/quotesright]

Now that you've spent some time on crisis management, it's time to think about other business matters.

Do you have questions about business growth? Are you curious about the best way to bring on new employees? Do you have questions you want to be answered by a professional?

All you have to do is ask! Send your questions using the links at the top of the page; it’s anonymous unless you want to include your contact information.