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Dispensing Strategies: Murphy’s Law

Murphy’s Law


March 11, 2008
By Michelle Brisebois

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Murphy’s Law states that if anything can go wrong – it will.  Disasters can be anything from a robbery involving one of your machines to a power failure, your best supplier going belly up or even a health crisis for you.

Murphy’s Law states that if anything can go wrong – it will.  Disasters can be anything from a robbery involving one of your machines to a power failure, your best supplier going belly up or even a health crisis for you.

Smaller businesses are generally more vulnerable to the financial losses that can occur due to some kind of emergency. A strong risk management strategy does not need to be formal. It does need to have contingency plans in place for whatever “surprises” might occur.

Your plan also needs to account for employee training in how to handle these “surprises.” 

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Risk management involves five steps:

1.    Identifying the risk.
2.    Quantifying the risk – how much could it hurt your business?
3.    Identifying ways to limit the risk.
4.    Putting a plan in place should the risk occur.
5.    Continuously monitoring the plan.

This may seem like a daunting task but if you set aside a couple of hours, you can probably tackle the biggest issues. Anything is better than nothing.

Here are a few areas worth considering – to get you started:

Employee Safety
Do you have a health and safety committee to meet regularly and discuss things like fire alarms and drills as well as hazardous material handling? Have you made it clear to staff what procedure they’re to follow in case of an armed robbery? Do your delivery vehicles have a regular maintenance schedule and do you document it?

Insurance
Do you have enough coverage for fire, flood or theft? Keep an off-site list and photos of your equipment to help speed insurance claims. What about insurance coverage should someone become ill from ingesting a food product from one of your machines and sue you?

Who’s driving your company vehicles? Do you know whom you’re hiring? That employee you’ve just hired may be the salt of the earth or they may have a driving record that will shoot your insurance premiums through the roof. If they’re using their own vehicle for delivery – does your insurance protect you from any lawsuits that may arise due to serious injury?

Data Recovery
What would happen if your hard drive crashed or if someone hacked into your database? All of those addresses and credit card numbers would be lost as well as accounting information.

Store your data securely and back up your system regularly. Back up your computer data and keep the information in a different location, ideally at least 50 km away from your business. You could simply mail your backup disc each week to a contact in another city.

Consider subscribing to a backup service. Some simple backup services like “Bell Business Backup” are specifically geared to small and medium-sized business needs and are advertised starting at $4.95 per month for Bell subscribers. Keep photocopies or scanned copies of important paper documents like licences or insurance policies outside the office. It won’t be much good to you if there’s a flood and it’s under three feet of water.

Business Interruption
What will you do if your business is without power for several days? What if there is a natural disaster or vandalism?
Make a list of employees who know first aid or CPR or who have ham radios. Get 24-hour contact information for all employees. Set up a phone tree or other plan to keep employees informed. Arrange for two-way radios, pagers or text messaging if the phone system goes down.

Some business owners have made arrangements with other businesses to share facilities in the event there is some unforeseen occurrence that interrupts the business flow. 

Succession Planning
Who will run the show when you take vacation? You do take vacation, don’t you?

Are you planning to retire in the next 10 years? If so, are there children who may wish to take over the business? Is there a keen employee who may wish to buy you out? Start to identify to whom you will pass the torch and then bring them along so when the time comes the transition will be smooth.

If you will be selling the business, a strong risk management policy will enhance its value.

Supply Chain Integrity
Are your suppliers in good financial shape? What if someone goes under all of a sudden? Make sure you have already identified alternative sources for comparable products.

With all of the product safety challenges the market has dealt with this past year, it’s even more important to have a recall process in place if there is a food safety issue. If you have a vendor qualification and certification process, get that out of the way now so if push comes to shove, you won’t have to scramble to get someone approved.

Get a big binder and label dividers with each of the topics listed here. In each section, list the five steps mentioned at the beginning of this article and then systematically define a plan for each one.

Having a plan will ensure you’ll be on the offensive quickly should life pitch to you a curve ball.

Remember – the corollary to Murphy’s Law states that whatever hits the fan will not be evenly distributed.


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