Two business owners review their business plan to ensure they are prepared for a state of emergency.

3 Phases to Prepare Your Business for an Emergency


Unexpected events can have serious consequences for businesses. Here are three key phases to make sure your business is prepared in a state of emergency.

Companies are subject to any number of unexpected events—ranging from pandemics and natural disasters to crime, internal malfeasance, or personal tragedies – that can lead to potentially catastrophic losses. Without adequate preparedness, businesses are unlikely to bounce back from a crisis.

Emergency preparedness requires a certain level of financial and operational stability, but it goes much further than ensuring business continuity. Companies also need to think proactively about unplanned events—developing ways to adapt the business for future success in response to the potential consequences of emergencies or disasters. Applying a three-phase outlook to the emergency-planning process can help business leaders take a next-gen approach to planning for the unexpected.

Cover the Essentials Across Operations, People & Safety

Most companies need two kinds of continuity plans: One for sharing with customers and prospects, and one that addresses all internal and external protocols for managing staff and service-line needs in the event of an emergency. For the latter, adequate planning starts with addressing the top physical and operational components of the business that would be immediately affected by the impact of an unplanned event—with the safety of staff and customers being the foremost consideration.

Maintaining up-to-date evacuation plans, system tests/audits, insurance coverage, and employee and customer contact information is just the beginning. Accurate business records (with secure backups) need to be made remote-accessible for the right personnel, with appropriate credentials and monitoring in place to limit companies’ risk factors around the unauthorized exposure of critical information.

Ongoing staff training and communication are also necessary for personnel to know what’s expected of them—and what they should expect from management—in times of crisis. Ideally, all parties should be aligned on exactly which resources and communication channels are best to turn to for guidance or pertinent updates.

Business leaders should also know where to turn for financial help, in the event they should need it. In addition to holding onto enough cash reserves to provide several months (at least) of runway for the business, company executives should stay in contact with the banking partners, investors, and local or industry-related economic development groups capable of connecting them to loans, grants, lines of credit in times of crisis.

Case Study the Finances with Risk & Relationships in Mind

The depth of companies’ financial-assistance needs—and the level of detail required in their “essential” emergency plans—depends on the size and scale of the given disaster at hand. For disaster-specific guidance, business leaders are wise to review resources from the Federal Emergency Management Agency and the U.S. Small Business Administration, which address incidents like floods and wildfires as well as cybersecurity issues.

And since even widespread emergencies like the COVID-19 pandemic affect companies’ incomes and supply/demand dynamics to drastically differing degrees, no business can count on getting 100% of the financial assistance they may need to survive trying times.

That’s why, from the earliest position possible in their business lifecycle, executives should start routinely modeling various emergency scenarios as part of their strategizing, planning, and risk-assessment processes. The key is understanding what kinds of events could be uniquely disastrous for the organization, and why.

For many companies, this has less to do with the perceived “strengths and weaknesses” in the customer base or balance sheet than with the overall fabric of their industry and business makeup. Companies should consider:

  • Can services be rendered remotely, in the event physical spaces must be shuttered?
  • Could partners or clients be reached in the event of connectivity loss?
  • Could the unexpected departure of any key personnel be catastrophic to a given business function?
  • Are any major customers or supply-chain partners entering precarious financial states, thus exacerbating risk?

Executives need to ask these and many other questions in order to understand their evolving vulnerabilities (and determine whether and how financial assistance would resolve the issues likely to emerge from them in a crisis event).

Create Adaptability for the Post-Crisis Company

Effective scenario modeling and ongoing business-health assessments help companies shed light on both vulnerabilities and opportunities. Many businesses struggled with remote work in the COVID-19 crisis, for example, but others found it a productive, efficient alternative to in-office operations. For some companies, shifting to an all-virtual business model may create long-term gains in output while lowering overhead facilities costs (and/or eliminating other expenses like commuter benefits, travel, or on-site food and perks).

Adapting a business for success beyond an emergency goes beyond boosting productivity and efficiency, however. Crises tend to help companies uncover previously unaddressed issues ranging from an overly centralized customer or supplier base to fraud and corporate malfeasance to lax workplace safety to the precariousness of many of their customers’ underlying financial circumstances.

Responding to such issues—and, in the most severe crises, repositioning the business model around new economic realities—is essential to transitioning out of an emergency state with a thriving, future-ready business.

The level of agility in a company’s operations and infrastructure, however, ultimately dictates how easily they can pivot or reposition to meet changing market needs or customer preferences (such as by selling different products/services, shifting their distribution model, or otherwise). Investing in digital solutions that help improve agility and adaptability—such as new data management, analytics, or customer-engagement tools—can thus help companies put themselves on better footing to recover from a crisis.

Phase It Forward

Ultimately, emergency preparedness is about preparing a business as best as possible for worst-case situations. And in today’s fast-changing landscape, the “worst case” is impossible to predict—let alone plan around.

As a consequence, any proactive approach to emergency planning has to go beyond contingencies and continuity to consider the many factors affecting the long-term health of the business. Bouncing back from a crisis is notoriously difficult for companies of any size, but an agile approach to emergency planning can help leaders build a better foundation for their business’ next generation.

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