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When most contractors think about planning for disasters, they think about securing worksites for natural disasters, complying with OSHA and related guidelines to prevent or reduce jobsite injuries, and obtaining adequate insurance coverage to cover any losses.

However, one often-overlooked area of disaster preparedness is the development and implementation of a business continuity plan. With just a small investment of time, contractors can develop a solid plan and strategy for avoiding serious and costly business disruption caused by natural disasters.

What is a Business Continuity Plan?

A business continuity plan is a set of rules, information and actions that are established by a business well before any disaster actually occurs. Think of it as a fire drill that might be held in a commercial building or a fire plan that a contractor might establish in his own home so that his family knows what to do in the event of a fire.

Obviously, there is no point in developing a fire plan after the fire has started. The same holds true for a business continuity plan. Developing a plan is an action that contractors should do when they establish their business, and it should be updated every year. The purpose of the plan is to make sure that during and after a disaster the business and its employees will continue to be productive and successful.

How is a Plan Established?

The easiest way to build a business continuity plan is to write it out. Most contractors find it incredibly useful to create forms and checklists. These forms or checklists need to include the business’ essential resources.

Some contractors choose to create physical forms and binders while others opt for digital solutions. One element to consider when selecting the digital-only option is that natural disasters can often result in the loss of power and/or internet and communication systems. It is important that any digital-only disaster plans be accessible in the event of power or internet outages. Most contractors, even those who are considered “tech savvy,” usually have a hard-copy backup of their business continuity plan. When disaster strikes, it is always a good idea to not have to rely on computers or electronic devices to keep the business up and running. Old fashioned paper solutions can often be the difference between a company’s success or failure during and after a disaster.

The typical business continuity plan should be broken down into a number of critical information types.

What Elements or Assets Should Be Included in the Plan?

Human Resources

Contractors should create a list of employees, independent contractors, suppliers, vendors and critical contacts. In the event of a disaster, it is important that the team knows what to expect and how to proceed, even if communication systems are disrupted. It is important to assign roles to certain key employees so that essential business operations can continue. This includes key business factors such as equipment, interim workspaces, information, records management and backup and any other vital elements needed to sustain business operations.

For example, team members need to be prepared to secure rental equipment in the event that company equipment is destroyed or rendered inoperable following a disaster. Team members also need to be assigned to secure temporary work spaces, whether it is a commercial space or it is setting up a makeshift workspace in other team members’ homes.

Contractors also need to ensure payroll continuity for employees in the event of a disaster. It is important to establish policies for direct deposit, overtime pay during the disaster and what to expect financially if the business is not operational. It is nearly impossible for employees to focus on business matters when they are concerned about their personal finances. Payroll continuity is critical for keeping the status quo during a disaster.

Business Operations

While the operations of the business are generally tied into human resources elements, many separate factors also require additional planning. These additional critical business functions include accounts receivables, payment of debts and financial obligations, compliance with regulatory deadlines and supply and project delays.

For example, most contractors cannot survive if there is an extended interruption of payment of accounts receivable. Plans should be established to make sure that their accounts receivable remain active and that the business is actively receiving payments.

Business Continuity Plan Meetings

An essential part of any business continuity plan must include regular staff meetings to discuss the procedures. Some contractors hold meetings annually while others have them quarterly. While it might not be necessary for smaller companies to have quarterly meetings, it is critical that meetings are held at least once per year. Contractors should regard these meeting as the final key to overcoming a disaster. These meeting are essentially fire drills that need to be conducted so the staff is prepared when the potential disaster occurs.

The world is an uncertain place. Natural disasters, war and other business-threatening issues pop up out of nowhere and can be life threatening to a contracting business. In order to survive disasters, contractors need to create, implement and discuss a business continuity plan before the unexpected occurs.