How a business continuity plan helped one company recover from disaster

culled from:bdc.ca

Fire threatens strong growth

The fire struck the company at a time of rapid expansion. Its 115 employees manufacture equipment for sale in 30 countries. Sales had climbed to $24 million from $15 million in just three years, thanks to the hard work of Desrochers and his partners, Luc D’Amours and Frédéric Lavoie.
Last September’s fire threatened that growth, destroying 75% of the factory and causing losses totalling $11 million.
Desrochers, D’Amours and Lavoie had all worked for the company for a long time before taking it over from its founders. They were not ready to let the catastrophe halt their expansion plans.

An action plan to handle crises

Unforeseeable events such as fires, technology system failures and natural disasters can have serious repercussions for businesses and even lead to bankruptcy. Entrepreneurs should have an action plan in place to handle crises and maintain business continuity, says Martin Allard, BDC’s Vice president, Financing and Consulting, for the Centre-du-Québec region. “A plan can keep you from overlooking critical steps in the heat of the moment.”
Upon arriving in Chesterville, a village midway between Montreal and Quebec City, Desrochers sized up the damage: $3 million in lost inventory, $5 million in lost equipment and $3 million in lost facilities.
“The fire started on a Wednesday night and Thursday we called our financial partners and reassured our employees. By Monday, we started implementing our action plan.”

Acting with determination

Allard believes the speed and determination with which the three partners reacted are what saved Anderson Group, a BDC client. “They made good decisions without hesitation.”
The young entrepreneurs decided to rebuild an expanded 65,000-square-foot factory in Chesterville.
Rebuilding had to happen at the same time as production resumed at a temporary location to ensure operational continuity.

Starting from scratch

Desrochers’ role was to get the company’s administration, accounting and computer network back on track. D’Amours, the Operations Manager, took on the task of securing temporary facilities until the new factory was built. Ten days after the fire, he found a warehouse in Victoriaville that was suited to the installation of production equipment.
Lavoie, the R&D and Technical Services Manager, had the challenge of making sure that research and development activities were not compromised.
Instead of hiring subcontractors, the partners decided to ask their own employees to help install the production lines in the temporary facilities.
Five weeks after the disaster, all employees were back to work and production was at 95% of its pre-disaster level.
“Soon we will get back to our acquisition and expansion plans, and we are targeting sales of $40 million in three years,” Desrochers says. “We will work hard and we will succeed.”