How to Help Keep Disasters from Putting You Out of Business | Bloomberg

When a catastrophic event flattens part of your production facility or disrupts your supply chain, it’s easy to forget that the rest of the world is carrying on with commerce as usual—with or without you.

Just a few years ago, a U.S. supplier of ground beef ground to a halt after a devastating fire left its facility inoperable. The business owner had solid insurance coverage that helped keep the business afloat while its facilities were rebuilt, but what he didn’t plan for was the fact that his customers had to continue with their businesses. While the process of rebuilding his beef facility was underway, his customers were gravitating to other suppliers. When all was said and done, the business owner never won back his customers in sufficient numbers to reopen his doors.

As the now former beef supplier learned the hard way, the lack of a formal disaster recovery plan can prove fatal to your business. In the beef supplier’s case, such a plan could have included a pre-catastrophe arrangement with another business—perhaps even a reciprocal agreement with a competitor—to produce his products in the event his business suffered a prolonged shutdown.

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