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Business Continuity: Tips for Unforeseen Interruptions
Prepare for disruptions due to employee health, departures and unforeseen cash flow or liquidity issues.

Article


Work Continuinity
Business interruptions can be unexpected, but they don't have to slow things down.
February 12, 2013 | by Chuck Wilson

This article was originally published on the Inside NSCA Blog. Click here to follow the blog.

Five years ago I learned a valuable lesson on being prepared for business interruptions.

In the summer of 2008 the entire downtown area of Cedar Rapids was flooded, the NSCA office building included. To make matters worse, our off-site storage facility located five blocks away was also flooded. Everything there was a total loss. Most downtown businesses had to scramble to relocate, just as we did. That experience changed the way I look at continuity, disaster recovery and preparedness.

That type of business interruption is rare, but what is becoming quite common is disruption to the business due to employee health issues, departures and unforeseen cash flow or liquidity issues.

Employee Health
More and more, it seems that we are all under a great deal of stress. My theory is this – we all love this industry, we love the technology and we love how exciting it is. It’s so easy to get wrapped up and work day and night burning the candle on both ends with little or no down time. A lack of sleep maybe, but no real stress there… The real stress comes from finding ways to make a profit doing what we love. That’s the real problem.

Departures
Unexpected departures of key people causes both stress and business interruption. It’s hard to plan for these departures, but having a strong bench helps immensely. Map out in your mind who would replace you and the others in case something unexpected happens and then you can relax a little more knowing you have a back-up plan.

Cash Flow
Cash flow is our lifeblood. Expect the unexpected such as multiple jobs landing at once and the bank reducing your revolving line of credit. The way to get out in front of that is by scenario planning. Speak to your banker and maybe even line up a backup plan just in case. Know all about alternative project financing models before you need to use one.

What You Can Do
Here are a few tips that can significantly help. One is getting the “back of house” in order and keeping it in good working order. The back of house is the infrastructure for your company. Activities such as accounting, order processing, contract management, HR, inventory management and service are needed to run smoothly and without your day-to-day involvement. If you get that dialed in it takes a lot of pressure off so you can focus more on leadership, strategy, sales, project management, new business development and so on. If you keep getting sucked into the back office stuff, you get frustrated and stressed out and end up working longer and harder.

The second tip is developing a team of advisors. I know what you’re thinking, “I can do this myself – things are running smoothly. I have every aspect covered and no one knows the company better than me. I can manage this by myself. If something happens, I have it covered.” Saying that would be like me saying the river that runs by the office would never go 31 feet above normal levels. Unexpected things do happen and having a go-to team of advisors when you need help is such a stress reducer.

It will take a few uncomfortable conversations and meetings, but it’s very important to plan for the unexpected. This means a discussion about what happens if you or your partners, senior staff or an entire department leaves the company. It means talking about business interruption insurance, key employee insurance and buy/sell agreements. It means having this well documented and known by your key advisors and senior management.

About the author

Chuck Wilson works with sound at his church, was a sound contractor for more than 20 years, and is now the director of the National Systems Contractors Association (NSCA). Have a business-related question for Chuck? Post it in our Ask Chuck Wilson Forum.
View all posts by Chuck Wilson
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