This year's killer tornadoes across the Midwest and South, and even up in Massachusetts, should remind dealers that sometimes the worst does happen.
And if the worst happens to a dealership, it should have an emergency preparedness plan to help it through the crisis and to resume business.
In creating a crisis plan for the business, dealers should consider several things. Here is what to do.
Prepare a Written Plan
This will serve as a roadmap for the employees of the dealership to undertake the tasks necessary to get the dealership back in business and selling cars, service, and parts.
Communicate to Employees
The plan should be given to staffers who should understand what they must do in the event of an emergency.
Appoint a Spokesperson/Point of Contact
In the event of an emergency, who will speak for the dealership?
Who will be in charge of carrying out the plan? How will the business stay in contact, especially with employees and customers?
If a disaster strikes, all means of contact originating from the dealership may go down. Is there a location to which calls can be forwarded? Can information be posted to the dealership's website from an off-site location?
Check Your Insurance to Protect your Investment
Are the dealership's insurance policy coverages adequate to protect your business? Is the company fully protected against all natural disasters such as hurricanes, floods, tornadoes, and earthquakes?
What about protection against man-made disasters resulting from arson and acts of terrorism?
Does the store have business-interruption insurance to take it through the time the business has to close down? Is coverage sufficient to maintain the salaries of employees whom you will not want to lose if the business is down for a time?
Are the company's building, improvements, computers (including data), and other key facilities and assets adequately insured?
Protect Computer Records
How will the computer records of the company be protected? If the company's server and/or central processing units are on site, how does the dealership protect against physical destruction? Are back-ups kept off site? Can the company arrange for server capacity off site to take over in the event of an emergency?
Protect Organic Documents
The critical records of the company such as franchise agreements, deeds and leases should be maintained onsite by the safest means possible. There should also be offsite storage of hard copies of critical documents, and copies should be converted to an electronic format (for example .pdf) and kept off site. This can be done at the company's off site storage facility.
Writing these materials to a flash drive kept by dealer executive personnel off site is also a simple answer. It is best to keep these in a virtual storehouse. Contact your computer vendor to discuss this.
Other Critical Documents. Sales and repair records will be important to the dealership's recovery. Summaries or key portions of these records are probably in the dealership's computer system. That is why back up is critical in the event of destruction of the company's system.
The hard copies of these documents should also be maintained in fireproof storage to provide the maximum possible protection.
In the event of a catastrophe that cripples or even shuts down the dealership, it will be necessary to contact your franchisor, your licensing agency, suppliers, and many others. Keep a complete list of contact information so that this can be done easily.
The government has provided advice concerning emergency planning for businesses in general at http://www.ready.gov/business/index.html. That is a good starting point that, when combined with these tips, will help you be prepared.
Michael Charapp is an attorney with Charapp & Weiss, LLP. He specializes in representing motor vehicle dealers and be reached at (703) 564-0220 or [email protected].