Pub. 4 2015-2016 Issue 4

Spring 2016 25 your bills and keep your dealership going? How long do you have to get your dealership back in order? Speaking of getting your dealership back on its feet, how much time would that actually take? You need to also determine the value of your assets. This is done by listing your assets, calculating your expenses, and deducting the expenses from the value of your assets. Be sure to include all your assets, not just the tangible ones. You might be surprised at how costly even lesser disasters can be. For example, hail from a thunderstorm can cause $1 billion in property and crop damage, yet most thunderstorms only affect a 15-mile diameter and are done in just 30 minutes. Strategies You have at least four options when it comes to developing a strategy: • You can do nothing. This might be appropriate for a disaster that isn’t likely to occur. For example, you probably don’t need to worry about Florida’s sink holes if you live in Utah. • You can remove the risk. If you’ve got hazardous materials stored in a backroom, you can choose to dispose of them safely before they hurt someone. • You can reduce the risk. If earthquakes are a problem, maybe you can hire an engineer to help youmake your business building safer. If flooding is a problem, maybe you need to install pumps and make sure valuable documents are never stored where they could be damaged by the water. You probably have a fairly sophisticated computer system; make sure you have a way to safeguard and recover data. • You can transfer some or all of the risk. This is what insurance companies live for. Pay them a premium, and if the worst happens, they’ll give you the cash you need to replacewhat you lost. It’s better if nothing bad happens, of course — lost time and inconvenience are not something any insurance company will pay you for —but having an insurance policy might be the difference between keeping your business and losing it. That might be worth paying the necessary premiums. The Plan As a dealership owner, you should know that probably themost important part of your plan is deciding who has the authority to put the plan into motion, and who has authority to speak for your dealership while your company is dealing with the disaster. It shouldn’t just be you, although you can certainly be on the list. You may simply be unable to do what you would normally do, after all, but you still need to have someone else who could, and will, step forward to take your place until you can take charge again. The next thing to do is to actually write up a plan. Think about how to assess the extent of the disaster. Walk through what you think you, and the people who work for you, should be doing. Do you need to be part of a community effort? Is it appropriate to send people home? Remember that you want to keep people as safe as possible, keep your dealership and its assets as safe as possible, and prevent a minor emergency from becoming a major one. Consider having employees take classes from the Red Cross to teach thembasic first aid, CPR, and how to use an automated external defibrillator. Think about buying a defibrillator. The Test Testing starts with a checklist. One person, or a team, should go through your plan and make sure everything is there that ought to be there, and that everything is up to date. Other tests include sitting around a table and going through a review process with a group of people; testing the plan by running a simulation, like a fire drill or earthquake drill; conducting a test away from where your building is located to check things like data recovery; and doing a full test where you shut down all or some of the critical business processes. This last should be considered carefully, especially with respect to notifying your customers about what is happening. Make sure the benefits are worth the costs, and make sure you aren’t subjecting people to unnecessary risks. In particular, don’t scare people if there isn’t a good reason for it. Maintenance If youwill come upwith a plan andmaintain it, youwill be better prepared to handle whatever happens. That certainly beats the alternative.