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Why your fire insurance coverage is worthless
Tip of the day: Cancel your fire insurance. The money you get to replace production lines and office furniture, even operating income, won’t keep you in business anyway.
Statistics show that unless you have a watertight business contingency plan in place, your business won't survive a major fire.
43 percent of businesses suffering a disaster never recover sufficiently to resume business. Of those that do reopen, only 29 percent are still operating two years later.
Of course you do backup of vital business systems and their data. Legislation and common sense dictates this. No questions asked.
Maybe you are even ahead of most. You have a careful laid out plan for restoring your backups in case of a fire.
If you are in the elite, this includes arrangements for new facilities, ready to accommodate your staff within hours of the disaster.
All this for nothing
Coming this far, you have invested a lot in your “insurance coverage”. Too much to be let down by manual processes and paper documents. And as long as either plays any role in your business, even the best disaster recovery plan is prone to fail.
Even if everything runs like clockwork in the recovery phase, you’ll be missing those paper records badly. A resent study in London revealed that 30% of managers expected to go out of business if deprived of their paper records.
Electronic but manual
Outlook and Excel is still manual
With a new physical setup, your reliance on manual processes, will pose a major challenge. Processes do not become automated by moving them into Outlook or Excel. The more tasks people are required to perform from the top of their heads, instead of being guided by smart process applications, the bigger the challenge is.
Clean conscience
... beat the laws of physics
It’s no accident that even the most up-to-date bookkeeping legislation (e.g. the new Norwegian Accounting Law from 2014) does not require you to secure backup copies of your business documents as long as they are on paper. Not that you won’t need it in case of fire or flood. Just that it’s physically impossible. Even lawmakers wont ask you to beat the laws of physics. They’ll let you to go out of business with a clean conscience.
Pull your act together
You can do better than this. Going out of business with a spotless criminal record, cannot be your ambition. Get those paper documents digitized, and the business processes automated.
Compared to the efforts otherwise put forward, eliminating the dependency on paper documents for business is not overwhelming.
Beyond paper
In case you’re already beyond paper documents and manual routines I sincerely congratulate you. You have made yourself an important foundation for the future of your business. My next blog entry – Five ways to make your computer based business archives and processes disaster resilient – could be of interest to you.
Maybe you don’t give a rat’s ass about my business contingency advice. That’s OK, but at least save the money you waste on fire insurance coverage, and spend it on something more interesting.
Stick around.
