Hurricanes...
Following the lessons of Hurricane Andrew, Eric Ogren considered the potential downsides of running a home-based digital and interactive publishing company.
His most obvious exposure, aside from the business' location in the evacuation zone of Fort Lauderdale, Fla.'s Victoria Park neighborhood, is loss of power and telephone service, he said. While the business has a battery back-up to power its server for up to one hour, extended power outages would require a portable generator, he said. But if telephone lines went down, the 100 or so daily hits the server receives would be lost until service was restored -- which could take days or weeks, he admitted.
"That's what would hurt us," he said.
For Ogren, Hurricane Bertha's close encounter in July 1996 meant packing up the computer server and data, which is backed up on CD-ROM. Computer hardware was moved to the traditional office of one of his partners, where a T-1 line and better protection would help preserve the company's online presence, he said.
"If it's like Andrew, where you're without power for a week or longer, we can temporarily go up on somebody else's site, and just pay a service charge," he said. "It would be higher, but at least we come through on our obligation to our customers. And the customers on the outside wouldn't see that we actually switched to a different location."
Hurricanes like Bertha and Andrew, and natural disasters like tornados and earthquakes, are warnings to many businesses, but none more so than those whose headquarters and computers are based in the small or home office (SOHO). As soon as the hurricane flags were raised, so too were the questions: Can my business survive a disaster? What contingency plans are in place to protect the business from extended downtime? And without warning, as is the case with tornados and earthquakes, preparation is a year-round exercise.
It's not only an issue of whether the business can survive. The question has as much to do with protecting a company's ability to operate as well as keep in touch with customers.
For home-based businesses, preparing for hurricane season is no different than prepping a household for the June-to-November run. Issues range from reviewing insurance coverage to protecting expensive computer hardware and data, to the logistics of battening down a business during a storm, to capitalizing on utility service in order to maintain connection with the outside world. Understanding how your business will -- or won't -- operate before, during and after a storm is essential to keeping it operational.
"The considerations aren't really any different than they are for a normal homeowner," said an executive with BellSouth overseeing consumer and small business issues. "The only difference of course is if you lose your home, you lose your livelihood."
Before a storm, such phone company services as Memory Call and call forwarding can take or transfer incoming calls to maximize business efficiency. During a hurricane or tropical storm, the same services can be used to either alert customers of the company's situation, or reroute telephone traffic to a safe location where business will continue. Since they're housed at a central station, which has its own power generator, the applications likely will continue to work during and after the storm, said Goldman. This can let a business owner inform customers how to reach the business after the storm.
"Chances are if you have Memory Call, you are going to be in pretty good shape as far as getting your messages and being able to carry on business, even if you don't have a home location to operate out of," he said.
One possible downside, of course, is if any regional bell operating company's central office locations where the software and hardware for these services are housed lose power or telephone service themselves. Homestead, Fla.'s central office was destroyed during Andrew. But the company brought in temporary central office facilities, and rerouted telephone traffic. Just remember following the storm to call your own number and check that a power outage didn't erase your message. Report problems immediately to the local RBOC customer service number.
If a company has Internet access, electronic mail or broadcast fax capabilities, it can use those services to correspond with customers, clients or vendors. Send out a broadcast fax or electronic mail to client contacts warning of the approaching storm and its possible effect on the business. Ogren's business, for example, depends heavily on email to interact with customers, and the medium would be relied upon heavily in the event of a serious storm, he said.
"Email would allow us to communicate from any location at all," he said.
Given the widespread destruction a powerful hurricane can cause, business vulnerability and insurance questions should be raised before a storm hits. Survey the office and home to discover what equipment or files may be most vulnerable. Following Andrew and a spate of other national disasters, the American Red Cross began publishing in November 1993 its "Emergency Management Guide for Business & Industry," a 76-page manual with information covering 22 areas of emergency planning and response.
"So many businesses have to have a plan now and they never did before," said the assistant executive director of the Fort Lauderdale office, which charges a small fee to mail the publication to business owners.
Though many home-based entrepreneurs have standard residential coverage for their dwellings and contents, some homeowner policies don't cover computer hardware, or caps are so low that damaged furniture and business equipment often can't both be covered, said a vice president with the Florida Insurance Council, an insurance company lobbying and public affairs trade association in Tallahassee. Further, if computer hardware is used exclusively for business, some homeowner policies won't cover it.
"You can't assume at all that your basic home owners insurance is going to come anywhere near covering your office equipment," he said. "You can be in the lurch if a hurricane not only wipes out your home and your place of business."
In Florida, where Andrew caused some $30 billion in damages, insurance companies have become wary of insuring homes -- much less home offices, said one local agent. Still, the residential policy agent is often the best first step in inquiring about expanded home office coverage, said a staffer in the Florida Insurance Commissioner’s office. Given the growth of the home office sector, some insurance companies are offering policies tailored to meet the needs of home office, he said.
"Someone who has a home-based business really needs to discuss exactly what their operation involved with their insurance agent so they can determine what is and isn't covered under home owner policy," he said. "That can help you tailor a business insurance policy."
