How to prepare for disasters that might strike your fitness business.
When Donna Childs started her business, Childs Capital LLC, little did she know she would become a part of history.
“My business is located within the so-called ‘Zone 1’ of the World Trade Center, and I was in the World Trade Center on the morning of 9/11,” she recalls.
Despite being at the site of horrific devastation, Childs was able to reopen her business just a week later. “We were without essential services for some time, such as electricity, landline telephone, gas, water, pedestrian access and mail delivery,” she says. “I filed insurance claims and directed an environmental decontamination to remove soot, ash and other debris from my office.”
While 9/11 was a human tragedy of huge proportions, it “was also an economic catastrophe for small and midsized businesses . . . , with thousands ceasing operations as a consequence of the terrorist attacks. Few [business owners] were equipped to survive a disruption of this magnitude,” says Childs. While she handled the postattack period effectively, getting her business back up and running without delay, it was what she did long before the Twin Towers fell that saved her company.
If a disaster struck your fitness business tomorrow, would you be prepared? What precautions have you taken to be ready for an emergency? Discover how to create a plan that will safeguard your business if the unexpected happens.
Whether you call it a disaster plan, an emergency response plan, a crisis management plan or something entirely different, you must put in place a contingency plan for your business—with the hope that you’ll never have to use it. Unfortunately, many businesses spend more time planning their annual company picnic than they do planning for potential disaster. In fact . . .
- According to a study by the American Management Association, 36% of the corporations surveyed had no crisis management plan in place. The smaller the business, the less likely it was to be prepared for a disaster (American Management Association 2003).
- Analyst firm Gartner Inc. found that less than 10% of small and midsized businesses had plans in place to manage crises and ensure business continuity. The firm also discovered that 40% of companies hit by a disaster would go under within 5 years (Tynan 2003).
- The Advertising Council conducted a national survey of businesses with fewer than 1,000 employees. The study found that 92% of respondents said it was “very” or “somewhat” important for businesses to take steps to prepare for a catastrophic disaster such as an earthquake, a hurricane or a terrorist attack. However, only 39% said that their company had an emergency plan in place (The Advertising Council 2005).
Planning aside for a moment, you want to start by taking care of some simple foundational elements. Then, if a plan needs to be implemented, the groundwork you have laid will help the plan unfold as effectively as possible.
Facility. Begin by finding out whether your facility itself is up to code. Ask the fire department to visit to make sure the building meets fire safety codes. While you’re at it, invite the police department to check out security and offer ideas. Even if neither department has any suggestions, you’ll benefit in two ways from their walk-throughs. First, you will have peace of mind knowing you’re doing all you can to keep your employees, members and business safe. Second, fire and police—the first two departments to respond in an emergency—will now have a sense of how your facility is designed and laid out. Thus, should they need to enter the building or secure it during an emergency, they’ll be able to do their job with greater confidence and a higher level of skill.
CPR and First Aid. Are your staff’s CPR and first-aid certifications up-to-date? Has staff been properly trained in using the automated external defibrillator (AED)? Is the AED charged, ready to go and in a central location? While CPR, first-aid certifications and AED knowledge often apply to smaller crises, not keeping up-to-date with them may result in larger problems.
Data Backup. We all know we should back up our data, but how many of us actually do it? Forty-five percent of companies currently back up their data, a dramatic increase from 2004, when only 6% did, according to Gartner Inc. However, 70% of companies who back up do so only to a local device, which they keep at their place of business. This still leaves them vulnerable to losing their data if a catastrophe occurs.
Experts recommend backing up your data onto external drives at least once a week. Small flash drives are about the size of a key and can easily be taken home with you each night. Another option that’s becoming more popular is online data backup. Companies like dataVault set your business up on an automatic backup schedule, so that data is sent to a remote location and stored there without your even thinking about it.
The next step in working toward developing your plan is deciding what types of emergency are most likely to affect your business. Let’s say you live in the Northeast. Tornadoes aren’t a big threat. Depending on how far from the coast you are, neither are hurricanes. Nor’easters, earthquakes and floods might be, though. And there’s always the threat of fire. Your plan will need to cover the steps you should take in each scenario that could impact your area, so it’s important to pinpoint all potential disasters.
Your fitness insurance will cover certain catastrophic occasions. Sit down with your provider and discuss exactly what is—and isn’t—covered by your insurance. Be specific in your questioning of what’s covered. For instance, let’s say that damage caused by hurricanes is covered. But is damage caused by the ensuing hurricane-related flood covered, as well? How about payroll? You and your employees need to be paid, even during times of catastrophe. Does your insurance cover payroll and, if so, for how long and/or for how many dollars?
One reason Childs was able to get her business running again so quickly was that she had appropriate insurance. “I had comprehensive, cost-effective insurance, including business interruption insurance,” she says. “My claim was paid in full within 3 days of submission.”
You should also consider what supplies you might need on hand if a disaster happened and you were unable to leave the facility. Chances are high that you’d be left with no power, so consider what you’d require to be prepared.
Once you’ve taken care of foundational elements and are ready to craft your plan, you need to look at two main areas: people and business. The first phase of your plan should cover immediate what-needs-to-happen-now-at-the-time-of- the-emergency situations and take care of your biggest asset: people. The safety of your members, clients, customers, staff and managers is your top priority. You’ll have to decide whether it’s safer to contain people in-house or to get them out. You’ll need to make choices in split seconds. Planning ahead and role-playing hypothetical emergencies will help you make the best decisions possible in a high-pressure situation.
Experts recommend setting up a disaster response team composed of several employees—at least one from each department and, if your facility has multiple floors, at least one from each floor—to direct other staff and members in time of crisis. Practice emergency response every few months based on various potential crises—natural disaster, terrorist attack, heart attack, armed robbery. Your fire and police departments can help you with training and ensure that your plan is well constructed. Make certain that each staff member, whether he or she is on the disaster response team or not, knows his or her role, be it following the lead of someone on the team or acting as a leader.
The second phase of a disaster plan should focus on your business. Once you have brainstormed how to keep everyone safe, it’s time to ensure that your business stays intact. Owing to the nature of Child’s business, she was quickly able to get her company back on its feet. A fitness facility might be a different story. If a fire destroys your facility, for instance, business might not take place there for some time. How quickly rebuilding can occur will depend largely on how well prepared you are in the first place. Then again, let’s say only part of the building is incapacitated, and some business can continue. How will you let members and staff know? Miscommunication can happen quickly. Rumors and chaos spread even more rapidly and can damage a business struggling to get back into action.
Depending on the nature of the disaster and how widespread it is, communication via mail, e-mail and phone might be difficult, at least at first. Think about what backup methods of communication you can use in these situations. In some cases, media might be called on to report the crisis. A phone tree for staff is a good idea. Some companies set up automated services that send out a prerecorded message to employees, giving them information on the emergency, what to expect, whether or not to report to work and whom to contact with questions. You’ll also need to let members know whether your facility is still open and, if it isn’t, when they can expect to use it again.
By now, you’ll have your data backed up, so retrieving contact info will be easy. And because you’ll have proper liability insurance coverage, you’ll quickly file your claims and get the funds needed to carry on with your business.
While making the “right” decision in the face of crisis is sometimes a judgment call, you’re more likely to make a good decision when you are well prepared. Lay the foundation, put a plan in place and practice it. It might save not only your business but people’s lives as well.