News & Features

Gustav Makes My Point

Commentary: Business is Personal

It’s unlikely that we’ll ever have a hurricane here in Montana, but we have plenty of other things to keep our attention, disaster-wise.

A friend who lives in a small town in central Louisiana has been texting details about his community’s situation post-Gustav. His most recent message:More people with no way to store food or water today than after hurricane Katrina. The southern most point in Louisiana … no power. The northern most point in Louisiana at the Mississippi/Arkansas border … no power. 95% of the residents of his parish (what they call a county) have no electricity and have been told to expect it to be down for a week or more. Worst case estimates for restoring all power are FOUR weeks, despite being over 100 miles inland.

I suspect it isn’t obvious just how critical that four week period could be. It goes well beyond having the battery on your laptop die after a couple hours.

Store point of sale systems don’t work. Employees are evacuated and have no electricity at home even if they didn’t evacuate. Every sale provokes security concerns.

Even if employees can get to work, power lines and trees are strewn all over the roads. They don’t bury power lines in most of Louisiana because the water table is so high (same reason why you won’t find many traditional cemeteries there).

If stores do open, all credit cards have to be run by using old-fashioned paper slips (remember – there’s no power). That’s fine as long as the buyers actually have a valid card, room on their credit limit, etc. That doesn’t account for the fact that you’ll have to mail those slips in, wait far more than the typical 48 hours for your money, etc.

You might think generators are the answer, except that generators require fuel. Without electricity, gas stations can’t pump gasoline.

Of course, that assumes they actually *have* gas left. Most of stations in the southern half of Louisiana were pumped dry before the storm because the locals all know that they’ll be unable to get gas for a week or more after the storm clears.

Beyond the operational issues are the financial ones. Obviously, all of these issues are going to do their best to hammer your cash flow.

They affect your payroll. They affect your clientele and their cash flow, much less their needs. And you need to figure out how you will survive something like that. Here in the Flathead, a forest fire, a busted Hungry Horse Dam, earthquake, mudslide or similar things could trigger the kind of anarchy seen after Katrina and Rita.

When making the plan we discussed last week, keep in mind how serious the disaster could be. Pick the low-hanging fruit, but don’t be lazy. I don’t mean to suggest that you get Y2K-esque and stock six months of food and water and enough ammo to defend from a Russian attack.

What I mean is to take it very seriously, being pragmatic about the scenarios and specific threats to your business that you’re planning for. It’s safe to say that a number of the small businesses in my friend’s parish will never open again, despite the obviousness of the need to prepare when you live in a hurricane zone.

Maybe your disaster won’t be quite as serious as a Gustav, but a disaster that happens to you is always serious to you compared to those poor folks on TV.

Think about what changes have to occur for you to keep things moving if your three most valuable staffers disappear for two weeks. Maybe they’re stranded and can’t physically get to your place of business, or maybe they don’t have power. Or perhaps they are living in the gym at the high school on the other side of a busted bridge with 100 families whose homes are uninhabitable.

Consider what happens if your most critical piece of equipment is damaged and parts / repairs / replacement is delayed by several weeks. What happens if you need to do business from a temporary location? Be very careful to think through the entire process of “recovering temporarily”.

The more prepared you are, the better your business’ chance of survival. Don’t go off the deep end, but please, take your plan very seriously.

Want to learn more about Mark or ask him to write about a business, operations or marketing problem? See Mark’s site or contact him at mriffey@flatheadbeacon.com.