October 1, 2005
| BURNED: Are you prepared to handle a fire or other incident that would greatly damage your business? |
The infamous "finger" incident at Wendy's will be talked about for years to come, and it may take years for the restaurant's reputation to recover. Are you prepared if a similar incident happened in your place? What about the more likely threats of fire, foodborne illnesses and armed robberies? Would your restaurant's reputation withstand the crisis? Are you prepared for the business interruption and loss of income?
Through business continuity-management (BCM), you can anticipate and respond effectively to events that threaten key business activities. The first step is assessing the potential risks. Some factors to consider:
How likely is a risk to happen and what could you do to prevent it? If you are in a high-crime area, can you install a security system? Do you have backup generators in the event of a power outage?
How much could you afford to lose if a crisis prevented you from conducting business for a few days or a few months? Check your insurance policy to verify your business interruption coverage.
How will employees react? Low employee morale, reduced productivity and shortor long-term business closure impact a restaurant's most important assets, its people.
How would customers, suppliers and investors react if the restaurant received bad publicity because you were unprepared for an incident?
Do you know where the fire extinguishers are located, or how close the nearest fire/police station, utility substation or hospital is? Are your phone list and emergency contact numbers updated?
With this information, and looking at the worst-case scenario, develop a strategic response plan based on your analysis of the restaurant, other locations or facilities, operations, staff, processes and technology. The BCM plan will be different from restaurant to restaurant, but will share important elements:
Develop clear, direct instructions for the crucial first hour after an incident.
Make it clear who needs to do what, and who takes responsibility for what.
Make a second list of instructions for what must be done after the critical first hour.
Create an emergency contact list with home and cell phone numbers, including those for your insurance agent, lawyer and P.R. personnel.
Review the plan regularly with key staff members.
Get Professional Help
You're not a crisis management expert, so turn to professional experts for advice.
The internet is a great resource for crisis planning tools. Some insurance companies, for example, offer policyholders access to online disaster planning tools.
Ask your agent for advice on making sure you're adequately covered for various situations and for information about past losses that can teach you how to avoid or mitigate disaster losses.
If a lawsuit is a possibility, contact legal counsel. Your attorney is the best person to provide legal advice.
Work with a public relations firm with crisis communications experience to protect your restaurant's reputation. Some insurance companies cover this expense.
When disaster strikes
Immediately after a crisis event, your primary responsibility is to make sure your employees and customers are safe. Then, evaluate the extent of damage to the business and quickly ascertain potential ongoing threats to operations. The goal should be to transition smoothly from normal operations to crisis-mode operations for as long as necessary, with as little down time as possible.
Talk to your employees and vendors and let them know how the situation will affect them. Finally, communicate to your customers through the media. Be as forthcoming as possible, reassuring them that you are doing everything possible to rectify the situation. Engage your public relations firm to handle media relations, but you or a manager should be prepared to be the media spokesperson.
Taking the time and effort to develop a business continuity plan and employ crisis management techniques is critical. The restaurant that is prepared will be able to recover quickly and mitigate losses more effectively.
Mike Thomas is product director of commercial insurance for Fireman's Fund Insurance Company.
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