Sba 2012 year-in-review - 1-15-13
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2012 Year In Review:Valuable Lessons & Best Practices
Bob Boyd, President & CEOAgility Recovery
Joe Loddo, Acting Director for Business DevelopmentUS Small Business Administration
For copies of the slides presented during today’s session,please visit:
http://agil.me/2012lessons
For Audio: (1) Listen through PC speakers, OR (2) Dial 702‐489‐0001 and use access code 351‐020‐432
1. SBA Disaster Assistance Summary
2. 2012 Year‐In‐Review
3. Disaster Lessons Learned
Agenda
SBA Disaster Assistance Summary
Joseph LoddoDeputy Associate Administrator
U.S. Small Business Administration’sOffice of Disaster Assistance
2012 SBA Disaster Response
• In 2012 the SBA made disaster loans to businesses and residents recovering from tornadoes, earthquakes, wildfires, drought and Hurricane Isaac, which affected Alabama, Florida, Mississippi and Louisiana.
• Last year the SBA approved 19,893 disaster loans for more than $1.1 billion.
• Of those, 1,294 disaster loans were made to businesses, for a total of $102 million.
2012 Disaster Activity
2012 SBA Disaster Response
• Hurricane Sandy accounted for the surge in disaster loan making during the last quarter of 2012.
• A total of 11,983 disaster loans have been approved in the states affected by Hurricane Sandy, for a total of $822 million. Of those, more than 1,290 business disaster loans were approved for $102 million.
• Based on the recovery costs, Hurricane Sandy is turning out to be one of the most devastating disasters in U.S. History.
• Since October 30th the SBA has approved nearly the same amount of loans it made for all of 2012.
2012 Disaster Activity
SBA Disaster Loan Assistance
2012 SBA Disaster Response
• The SBA makes disaster loans to homeowners, renters, businesses of any size and non‐profit organizations.
• Businesses can apply for up to $2 million to rebuild and replace real estate, machinery, inventory destroyed by the disaster.
• SBA also offers an Economic Injury Disaster Loan, which is a working capital loan that allows the business to cover operating expenses it would have been able to handle if the disaster had not occurred. The limit for that loan is also $2 million.
2012 Year‐In‐Review
Bob BoydPresident & CEOAgility Recovery
‐ 47 Presidentially Declared Disasters, Affecting 32 states and territories
‐ Eleven disasters causing over $1 Billion in Damages(2nd behind 2011’s 14 Billion Dollar disasters)
‐ The largest Atlantic hurricane on Record:Hurricane Sandy (winds extending 1,100 miles in diameter)
‐ Preliminary estimates of losses due to damage and business interruption are estimated at $65.6 billion, making it the 2nd costliest Atlantic hurricane, behind only Hurricane Katrina.
‐ NOAA has said that it is likely that the total cost of the disasters in 2012 will exceed 2011 even with three fewer total billion‐dollar weather events.
2012 Disasters
Data current as December 6, 2011
2012 Disasters
2012 Disasters
47 Total Disaster Declarations (FEMA.gov)
2012 Federally Declared Disasters
2012 US Natural Disaster Figures
Agility Recovery Eventsby Category including Alerts & Disaster Declarations
4,423 Reported Events
2012 Agility Recovery Event Summary
Isolated Events 3.1%
Tornado16.5%
Winter Storm 0.4%
Thunderstorms
9.4%
Other TS/Hurricane
9.1%
Wildfires 0.0%
TS/Hurricane Isaac
34.2%
Hurricane Sandy 27.2%
2012 Agility Recovery Event Summary
Agility Disaster RecoveriesCategorized by Recovery Type
180 Total Events
Technology9%
Phone/Fax Redirection
19%
Power 53%
Full Mobile7%
Internet6% Space
4%
Other2%
Lessons Learned
1. The Reality of Risk
2. Failure to Prepare Employees
3. Preparing Your Supply Chain
4. Dependence on Technology
5. Practice, Practice, Practice
6. Obtaining Proper Insurance Coverage
7. Proper Communication Saves Lives, Time & Money
Lessons Learned
The Reality of Risk
Lessons Learned…
Some Disasters Happen with little to NO Warning
West Liberty, KY
Reality of Risk
Prepare yourself, your business & your familyfor 72 Hours…or more.
Reality of RiskNew York, NY
Disasters Come in Many Forms
Top Threat Risks to Business
1. Power Loss2. Loss of Sales & Customers3. Length of Recovery4. Uninsured Loss
(for continuing operations)
5. Uninsured Loss(for destruction of physical property)
NFIB Research Foundation Rep
NFIB RESEARCH FOUNDATION REPORT
Failure to Prepare Employees
Lessons Learned…
Failure to Prepare Employees
A. Employees’ Plan Knowledge1. Do they Know the plan?2. Do they know where to find the plan?3. Do they know their primary role?4. Have you shared the plan with new hires?
Failure to Prepare Employees
B. Work from Home Strategy1. Productivity suffers2. Inability to login to networks
‐ Phone/Internet Outages‐ Power Outages
3. Unwillingness to report to duty‐ Family or Property in peril
4. Distractions5. Child Care Issues
●●●●●●●●●●
●●●●●●●●
Failure to Prepare Employees
C. Cross‐Training Employees1. Critical Functions must continue2. Certain areas/departments may experience greater
demand3. Longer/Odd Hours may
require additional staffing
For this checklist and others,please visit:
http://www.PrepareMyBusiness.org
Failure to Prepare Employees
D. Transportation Issues1. Mass Public Transportation Shut Down
a) Car Poolingb) Overnight accommodations nearby
2. Fuel Shortagesa) Storage of Fuel for Critical vehicles/staffb) Fuel vendor for deliveries
3. Restricted Access to non‐Residents4. Damaged/Destroyed Vehicles
Failure to Prepare Employees
E. Family Preparedness1. Do they have a plan?2. How can your organization help?
a) Workshopsb) Checklistsc) Emergency Kits
3. Suggested Sites:a) Ready.govb) RedCross.orgc) Do1Thing.com
Preparing Your Supply Chain
Lessons Learned…
Preparing Your Supply Chain
A. 3rd Party IT: BOTTLENECKB. Power/Communication Vendors: BOTTLENECKC. Payroll Companies
‐ Do you know their Recovery Plan?‐ What is the process for an interruption during Pay Cycle?‐ Are they integrated into your Exercise?
D. Attorney/CPA Firm‐ Can you reach them following in interruption?‐ Are they involved in your planning process?
E. Delivery/Shipping Partners‐ What is the protocol for an interruption?‐ How will any delay from these partners affect your business?
Over‐Dependence on Technology
Lessons Learned…
• Cell networks can be compromised by physical interruptions caused by weather events, or simple network congestioncaused by a flood of users
• Must maintain alternative means of communication with customers, partners, suppliers and employees
• Utilize multiple carriers within your organization
• Have at least one land‐line in your facilities
• Establish a communication hub/partner outside your immediate area who can communicate on your behalf
Over‐dependence on Cellphones
Dependence on Outside IT Staff
A. Limitations of Outsourced IT1. Staff/Time Limitations2. Responsiveness During Disaster3. Communications Gaps
Narrow Focus on DATA
B. Lack of Focus on Physical Recovery ElementsData Shouldn’t be the Only Recoverable Asset1. Office Space2. Work spaces (desks, chairs, etc.)3. Hardware (Servers, desktops, copy, fax)4. Power (Know demand ahead of time)
Practice, Practice, Practice
Lessons Learned…
Failure to TEST Your Plan
A. Test Data Restoration‐ Can you restore with the information at hand?‐ How long will it take?‐ Can you recover to new/different hardware?‐ Do you have access to the necessary software?
B. Test Alert Notification‐ Can you activate the system remotely?‐ Can more than one person access the system?‐ If you utilize a phone tree, is it updated?
Failure to TEST Your Plan
C. Test Employees’ Knowledge of the Plan‐ What happens if YOU aren’t there?‐ If the office burns tonight, what is their first step?‐ Can they access email/text messages/voicemail remotely?
D. Test Vendors’ Resilience‐ Involve vendors/partners/suppliers in your exercises‐ Know their recovery plan and be able to integrate it into
your own plan
E. Know Your Power Needs‐ No other takeaway MORE IMPORTANT from the aftermath
of Sandy‐ Caused multiple, complicated, costly delays‐ A SIMPLE test would have shown this shortcoming for all
entities
Obtaining Proper Insurance
Lessons Learned…
Failure to Properly Insure
A. Mitigating Physical Losses1. Asset Management Program2. Accurate Inventories3. Safeguarding Assets prior to storm/event4. Turn off utilities ahead of time5. Postpone Deliveries6. Move assets to secure locations7. Ensure your locations are secured properly and all
necessary repairs made ahead of time (roof, support structures, hurricane/storm shutters)
8. Ensure battery and/or generator backup for sewer/storm water pumps are operable
Failure to Properly Insure
B. Coverage Limits/Exclusions1. Power Loss2. Type of Interruption3. Type / Cause of Damage
C. Operational Downtime Cost‐ Do the Exercise, establish a cost estimate
D. Lost Revenue‐ Do you have enough coverage?
E. Added Expenses1. Recovery Costs2. Temporary accommodations3. Travel Expenses
Proper Communications
Single Point of Failure ‐ Communications
Communications Failures1. Network Interruption2. Mobile Devices
‐ Single Carrier for entire company?‐ Chargers for mobile devices?
3. Single Means of Communication‐ One email server‐ Unfamiliarity with texting‐ Single phone system, with no backup
or means for simple transfer/forwarding‐ No land lines in the office or at
leadership teams’ homes
Single Point of Failure – Generator/Spokesperson
Single Communicator/Spokesperson1. Often the CEO or President2. Single person inhibits:
a. Leadership to employee communicationsb. Decision‐making abilityc. Organization to stakeholder communicationsd. Media Relations
• Create a Crisis Communication Plan• Have multiple redundant means of reaching employees and key contacts independent of terrestrial phone lines and a single cellular network as much as possible
• Keep Emergency Contact Lists Updated• Utilize Online Message Boards• Maintain Access to Your Website• Keep Those Outside your OrganizationInformed
• Have a Media Relations Strategy andPlan
Proper Communications
For a Crisis Communications Checklist, Visit: http://agil.me/crisis‐comms
QUESTIONS?
Today’s session has been recorded.Links to the archived recording will be emailed
to all registrants automatically tomorrow.
For copies of the slides presented during today’s session,please visit http://agil.me/2012lessons
Bob Boyd, President & CEOAgility Recovery
[email protected]‐927‐7922
Future Webinars
Register for any upcoming webinars at:
http://www.PrepareMyBusiness.org
Future Educational Webinars from the SBA & Agility:
February 12th: “Crisis Communications Planning ‐ The Keystone of Disaster Recovery Response”
March 13th: “Five Things You May Not Know About SBA Disaster Assistance”