Managing Business Disruption
STEP 2 - Plan for Variables OUTSIDE the Control of a Business
Customers - Disasters affect more than a single business. To the extent that the economy is impacted, some types of customers move away from an area and others buy different products. For example, the rebuilding process means that basic appliances that may have been destroyed in the earthquake (such as televisions) are in great demand, and that repair materials (such as sold by hardware and lumber stores) are also in demand. Contractors and builders are "winners" and many "retail" businesses are "losers." A study funded by the Public Entity Risk Institute provides examples of companies dealing with an altered customer base. "A young man, faced with bankruptcy because of lack of customers, converted his auto repair business into a thriving business working on race cars. An optometrist assessed the adverse effects on his customer base and moved to a new location. A dry cleaner without customers saw the National Guard troops helping with the disaster as a built-in market and captured it. The young man with a shop that sold sewing machines transformed his product into a recreational service requiring a capital outlay on the part of the customer." (Alesch and others, 2001).

Infrastructure - Transportation and utility systems will be disrupted. Planning for such disruptions is critical. Employees, customers, and suppliers will need to use roads to get to work, as well as to gain access to key facilities that need repair.  Everyone should anticipate transportation disruptions in areas through which they generally travel.   However, some of the transportation issues are more critical for manufacturing companies than for service or office workers. Water, sewer, and natural gas power pipelines will be broken, and utility crews will be faced with a disrupted transportation system, further delaying repairs. Communication and power systems will also be disrupted. It does not take a natural disaster, such as an earthquake, to cause power and communication problems. Again, the difference in a major disaster is that damage to these systems occurs in an environment where there is additional damage. Several ideas to plan effectively for these disruptions are provided in the form of a CHECKLIST.

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ABAG, the Association of Bay Area Governments, is the regional planning and services agency for the nine-county San Francisco Bay Area.
The writing and production of the materials and reports of this page and the others in this section of the ABAG Earthquake Program web site were funded in large part by Grant No. 01-HQGR-0214 from the U.S. Geological Survey (USGS), as well as by the Association of Bay Area Governments. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the funding agencies. Last updated 4/7/04 by jbp.