Monday, February 23, 2015

Preparing Your Modular Home Business for a Natural Disaster

A third of the US has seen extreme cold weather and lots of snow this year. Modular home factory owners serving these markets, especially the Northeast and New England states have told me that modules are still in their yards instead of being sent and set.

Snow in New England

In a couple of cases, the homes have been stuck at the factory for over 5 weeks and it looks like it will be at least another 2-3 weeks. This chokes cash flow, has carriers committed and sales reps without income.

But modular home builders are in even worse shape. While large factories may have insurance companies with consultants with disaster planning and recovery to assist them with their plans, modular home builders sitting at their office desk and watching 30-80” of snow fall must do their own planning.

Hurricane Sandy in NJ

Tornado in Oklahoma

Snow isn’t the only problems facing today’s modular home builders. Just two years ago Hurricane Sandy ripped through the East Coast destroying thousands of homes and businesses overnight while fires, floods and tornadoes devastate other areas.

Here is a list of things you should have in place to help you if a natural disaster hits your business:

  • Set up an emergency response plan and train employees to carry it out. Make sure employees know who to notify about the disaster and what measures to take to preserve life and limit property losses.
  • Write out each step of the plan and assign responsibilities to employees in clear and simple language. Practice the procedures set out in the emergency response plan with regular, scheduled drills.
  • Compile a list of important phone numbers and addresses. Make sure you can get in touch with key people after the disaster. The list should include local and state emergency management agencies, new home customers, contractors, suppliers, realtors, financial institutions, insurance agents, and insurance company claim representatives.
  • Decide on a communication strategy to prevent loss of customers. Post notices outside your premises; contact clients by phone, email, or regular mail; place a notice in the local newspapers.
  • Consider the things you may need initially during the emergency. Do you need a back-up source of power? Do you have a back-up communications system?
  • Human resources. Protect employees and customers from injury on the job site. Consider the possible impact a disaster will have on your employees' ability to return to work and how to get back to work on customer’s homes.
  • Physical resources. Inspect your business' physical plant(s) and assess the impact a disaster would have on facilities. Make sure your plans conform to local building code requirements.
  • Business continuity. Even if your business escapes a disaster, there is still a risk that the business could suffer significant losses due to the inability of suppliers to deliver goods or services to your homes under construction. You should communicate with your suppliers about their disaster preparedness and recovery plans, so that everyone is prepared.
  • Protect your building. If you own the structure that houses your business, integrate into your plan disaster protection for the building and the contents. Consider the financial impact if your business shuts down as a result of the disaster. What would be the impact for a day, a week, or an entire revenue period?
  • Keep duplicate records. Back up computerized data files regularly and store them off-premises. Keep copies of important records and documents in a safe deposit box and make sure they're up to date.
  • Identify critical business activities and the resources to support them. If you cannot afford to shut down your operations temporarily, determine what you need to run the business elsewhere.
  • Find alternative facilities, equipment and supplies, and locate qualified contractors. Consider a reciprocity agreement with another business. Try to get an advance commitment from at least a couple of subcontractors to respond to your needs.
  • Protect computer systems and data. Data storage firms offer off-site backups of computer data that can be updated regularly. Become educated on how to use the “Cloud” for data storage.

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