Business Continuity Planning Gap Analysis - Homeland Security ...

SERRI Final Report89975-1BUSINESS CONTINUITY PLANNING GAP ANALYSISFOR SMALL DISADVANTAGED BUSINESSESIN MISSISSIPPIProject Principal Investigator:Dr. William S. PiperPrivate‐Sector Partner:Janice A. Banks, MBAFebruary 2011

SERRI Report 89975‐1SERRI Project: 89975Contract Number: 4000084719Final ReportBUSINESS CONTINUITY PLANNINGGAP ANALYSIS FOR SMALL DISADVANTAGED BUSINESSESIN MISSISSIPPIProject Principal Investigator:Dr. William S. PiperAlcorn State UniversityPrivate-Sector Partner:Janice A. Banks, MBASmall Planet Works, Inc.Date Published:February 2011Prepared forU.S. Department of Homeland Securityunder Southeast Region Research Initiative

Southeast Region Research InitiativeACKNOWLEDGEMENTSThis research was funded by the Department of Homeland Security‐sponsoredSoutheast Region Research Initiative (SERRI) at the Department of Energy’s Oak RidgeNational Laboratory (ORNL). We are grateful to SERRI for its support and, particularlyto Dr. Benjamin Thomas, Jr., Operations Manager and Technical Project Officer, for hisguidance and assistance.The authors wish to thank the many small disadvantaged and women‐ownedbusinesses, the universities and agencies, and the private entities that took time fromtheir busy schedules to talk with us. We would also like to acknowledge the generoussupport of the following individuals, who helped to facilitate this process:William Anderson, Doctoral Candidate, Jackson State UniversityDr. Vivek Bhargava, Dean School of Business, Alcorn State UniversityAshara Davis, Graduate Assistant, Alcorn State UniversityWarren C. Edwards, Director, SERRIJames F. Johnson, Small Planet Works, Inc.Dr. Lynne Richardson, Dean School of Business, Mississippi State UniversityAJ Scott, Graduate Assistant, Alcorn State UniversityJillian Thomas, Graduate Assistant, Alcorn State UniversityNeil Turner, Graduate Assistant, Alcorn State UniversityDr. Samuel White, Director of Grants and Contracts, Alcorn State UniversitySERRI Report 89975-1ii

Southeast Region Research InitiativeCONTENTSLIST OF FIGURES ..................................................................................................................... viiLIST OF TABLES ........................................................................................................................ ixACRONYMS AND DEFINITIONS........................................................................................... xiSOUTHEAST REGION RESEARCH INITIATIVE ............................................ ................... xvEXECUTIVE SUMMARY..............................................................................................................11. INTRODUCTION ..................................................................................................................51.1 Background.............................................................................. ......................................51.2 Purpose ...........................................................................................................................51.2.1 Secondary Research.............................................................................................51.2.2 Primary Research.................................................................................................61.3 Methodology..................................................................................................................61.3.1 Literature Search..................................................................................................61.3.2 University/Agency Survey Pool.......................................................................71.3.3 Primary Research of SDBs..................................................................................71.3.4 Primary Research Methodology........................................................................82. BCP LITERATURE SEARCH AND ANALYSIS.................................................................92.1 Small Business BCP/Resilience Literature Database ................................................92.2 Pre-Katrina Literature Search......................................................................................92.3 Post-Katrina Literature Search ..................................................................................112.4 Literature Analysis......................................................................................................14SERRI Report 89975-1iii

Southeast Region Research Initiative3. BCP SURVEY FINDINGS ....................................................................................................173.1 Purpose .........................................................................................................................173.2 BCP Survey Findings..................................................................................................173.2.1 BCP Questionnaires ..........................................................................................173.2.2 University/Agency Survey Findings .............................................................183.2.3 SDB Survey Findings ........................................................................................183.3 Mississippi Programs that Provide Services to SDBs.............................................193.3.1 Small Business Development Centers ............................................................193.3.2 Planning and Development Districts..............................................................203.3.3 Mississippi Development Authority ..............................................................223.3.4 Other Community and Business Development Initiatives..........................234. BCP GAP ANALYSIS ...........................................................................................................254.1 Purpose .........................................................................................................................254.2 BCP Gap Analysis .......................................................................................................255. SUSTAINABLE BUSINESS PROFILE FOR SDBs.............................................................275.1 Purpose .........................................................................................................................275.2 What is Business Sustainability?...............................................................................275.3 SDB Sustainability Profile ..........................................................................................286. RECOMMENDATIONS FOR LOW-COST MITIGATION STRATEGIESFOR SDBs ...............................................................................................................................316.1 SDB Mitigation Strategies ..........................................................................................316.2 Marketing BCP to SDBs..............................................................................................33SERRI Report 89975-1iv

Southeast Region Research Initiative7. OPPORTUNITIES FOR SERVICE AND RESEARCH EXPANSION.............................357.1 Education, Training and Service Opportunities .....................................................357.2 Research Expansion Opportunities ..........................................................................378. SUMMARY ............................................................................................................................399. REFERENCES........................................................................................................................41APPENDIX A. SMALL BUSINESS BCP/RESILIENCE LITERATUREDATABASE (2000 – 2010) .............................................................................45APPENDIX B. AGGREGATED UNIVERSITY/AGENCY SURVEY RESULTS .............53APPENDIX C. AGGREGATED SDB SURVEY RESULTS...................................................61APPENDIX D. BCP QUESTIONNAIRES..............................................................................69SERRI Report 89975-1v

Southeast Region Research InitiativeLIST OF FIGURES1. BCP support that would benefit SDBs...............................................................................252. BCP services provided to small businesses and SDBs.....................................................553. Respondents provide the same BCP services to small businesses and SDBs...............564. Changes in services to small businesses since Katrina....................................................565. All responding organizations were in operation before Hurricane Katrina ...............576. Pre-Katrina BCP services .....................................................................................................587. Awareness of other agencies providing BCP services.....................................................598. Gender and ethnicity of business owners .........................................................................639. Respondents’ business structure ........................................................................................6310. SDBs’ length of time in business.........................................................................................6411. Industries represented by SDBs..........................................................................................6412. Where are SDB respondents located? ................................................................................6513. SDBs experiencing delays due to weather disasters .......................................................6514. SDBs with BCPs.....................................................................................................................6615. SDBs with BCPs are in the above industries.....................................................................6616. SDBs exercise/practice of BCPs..........................................................................................6717. SDBs prepared for a natural disaster .................................................................................6718. SDB awareness of state or federal assistance with BCP ..................................................6819. Requested BCP support .......................................................................................................6820. Agency/University BCP Questionnaire ............................................................................7121. Small Disadvantaged Business Questionnaire .................................................................73SERRI Report 89975-1vii

Southeast Region Research InitiativeLIST OF TABLES1. Example of literature transition from more expensive BCP activities to lessexpensive activities (pre- and post- Hurricane Katrina) ................................................ 162. SDB Sustainability Profile....................................................................................................293. Options for Small Business Insurance................................................................................304. Marketing BCP to SDBs .......................................................................................................335. Small Business BCP/Resilience Literature Database (2000 – 2010) ...............................47SERRI Report 89975-1ix

Southeast Region Research InitiativeACRONYMS AND DEFINITIONSAcronymsA&EBCPCARRICDBGDREMAFEMAGO ZoneHBCUHVACIEEEITLLCMBEMDANAICSNGOORNLPDDPEERPERIArchitecture and EngineeringBusiness Continuity PlanningCommunity and Regional Resilience InitiativeCommunity Development Block GrantDisaster RecoveryEmergency Management AgencyFederal Emergency Management AgencyGulf Opportunity ZoneHistorically Black Colleges and UniversitiesHeating, Ventilation, and Air ConditioningInstitute of Electrical and Electronics EngineersInformation TechnologyLimited Liability CorporationMinority Business EnterpriseMississippi Development AuthorityNorth American Industry Classification SystemNon-governmental organizationOak Ridge National LaboratoryPlanning and Development DistrictPerformance Evaluation & Expenditure ReviewPublic Entity Risk InstituteSERRI Report 89975-1xi

Southeast Region Research InitiativeSBDCSDBSDB/WBESERRISMOBSmall Business Development CenterSmall Disadvantaged BusinessSmall Disadvantaged Business/Women-OwnedBusiness. For purposes of this report, theacronyms MBE, WBE and SDB are usedinterchangeably and will be collectively referredto as SDBs.Southeast Region Research InitiativeSmall Minority-Owned BusinessSERRI Report 89975-1xii

Southeast Region Research InitiativeDefinitionsFor purposes of this report, we use the following definitions that apply to thescope and intent of this study.Business Continuity Planning is the creation and validation of a practiced logisticalplan for how an organization will recover and restore partially or completelyinterrupted critical functions within a predetermined time after a disaster or extendeddisruption.Community Resilience is defined as the capability to anticipate risk, limit impact, andbounce back rapidly through survival, adaptability, evolution, and growth in the face ofturbulent change. (Plodinec 2009)An Expert System is a computer application that performs a task or providesinformation that would otherwise be performed or delivered by an expert in the field. Itcan deliver information that is customized to the needs of the user.Mitigation can be considered as any sustainable action that prevents or minimizesinjury or harm to people, prevents or minimizes damage to property, and ensurescontinuity of critical societal functions.Resilience refers to the ability of a human system to respond and recover. It includesthose inherent conditions that allow the system to absorb impacts and cope with theevent, as well as post‐event adaptive processes that facilitate the ability of the system toreorganize, change, and learn in response to the event (Cutter et al. 2008).Small Business means a concern, including its affiliates, that is independently ownedand operated, not dominant in its field, on a national basis; and is no larger than SBAʹssmall business size standard for its industry. (Up to $35.5M and up to 1,500 Employees,depending on industry.)Small Disadvantaged Business means a small business concern that meets the criteriaof social and economic disadvantage and other eligibility requirements fordisadvantaged status set forth in 13 CFR 124.1002; that meets the size standardcorresponding to the applicable four‐digit Standard Industrial Classification (SIC) code;whose management and daily business operations are controlled by one or more sociallyand economically disadvantaged individuals whose net worth must be less than$750,000 after taking into account the exclusions set forth in 124.104(c)(2); and whoseowner(s) is a citizen of the United States.SERRI Report 89975-1xiii

Southeast Region Research InitiativeSOUTHEAST REGION RESEARCH INITIATIVEIn 2006, the U.S. Department of Homeland Security commissioned UT-Battelle atthe Oak Ridge National Laboratory (ORNL) to establish and manage a program todevelop regional systems and solutions to address homeland security issues that canhave national implications. The project, called the Southeast Region Research Initiative(SERRI), is intended to combine science and technology with validated operationalapproaches to address regionally unique requirements and suggest regional solutionswith potential national implications. As a principal activity, SERRI will sponsoruniversity research directed toward important homeland security problems of regionaland national interest.SERRI’s regional approach capitalizes on the inherent power resident in thesoutheastern United States. The project partners, ORNL, the Y-12 National SecurityComplex, the Savannah River National Laboratory, and a host of regional researchuniversities and industrial partners, are all tightly linked to the full spectrum of regionaland national research universities and organizations, thus providing a gateway tocutting-edge science and technology unmatched by any other homeland securityorganization.Because of its diverse and representative infrastructure, the state of Mississippiwas chosen as a primary location for initial implementation of SERRI programs.Through the Mississippi Research Initiative, SERRI plans to address weaknesses indissemination and interpretation of data before, during, and after natural disasters andother mass-casualty events with the long-term goal of integrating approaches across theSoutheast region.As part of its mission, SERRI supports technology transfer and implementation ofinnovations based upon SERRI-sponsored research to ensure research results aretransitioned to useful products and services available to homeland security respondersand practitioners. Concomitantly, SERRI has a strong interest in supporting thecommercialization of university research results that may have a sound impact onhomeland security and encourages university principal investigators to submitunsolicited proposals to support the continuation of projects previously funded bySERRI.For more information on SERRI, go to the SERRI Web site: www.serri.org.SERRI Report 89975-1xv

Southeast Region Research InitiativeEXECUTIVE SUMMARYThe key objective of this research project is to understand essential research andoperational gaps for business continuity planning (BCP) and disaster recovery amongsmall disadvantaged businesses (SDBs). Other supporting objectives of this researchproject are to: i) identify BCP best practices which can be customized or tailored forother small business communities; ii) investigate the research and operational gaps forBCP for SDBs in Mississippi over the past decade; iii) conduct a study of programsimplementing BCPs for SDBs and their effectiveness; iv) expand the awareness of BCPand its impact on community and regional resiliency; and v) develop an SDBsustainability profile with recommendations to achieve resilience. Research thatcompares, validates, and expands the findings in the current literature with practicalexperiences of SDBs furthers the understanding of community and regional resilience.To accomplish the above objectives, the study was segmented into a literaturereview and an empirical study. The literature review was divided into two researchperiods – pre‐Hurricane Katrina (2000 to 2005) and post‐Hurricane Katrina (2006 to2010). A comprehensive literature search was conducted for articles, reports andprograms that addressed BCP for SDB resilience, disaster preparedness and lessonslearned from previous disasters. The resulting database was then synthesized andanalyzed for clarity, applicability and future decision‐making. Research was alsoconducted into the Mississippi programs that provide BCP support for SDBs, includinguniversities, the private sector and government agencies.The literature review provided little information on BCP for SDBs in Mississippi orcommunity/regional resiliency for the study area or period. A highlight of this effort isthe original research performed with the SDBs and federal, state and university disasterassistance programs. The data and information derived from the businesses andprograms provide significant insight into the problems confronted by SmallDisadvantaged Businesses in the time of disaster.FindingsLiterature SearchThe literature search was designed to examine the current research, divided intotwo research periods – pre‐Hurricane Katrina (2000 to 2005) and post‐Hurricane Katrina(2006 to 2010); and extract applicable information to synthesize into a publisheddocument on BCP for SDBs in Mississippi. The pre‐Katrina literature search revealedthat there are only a few articles that focus on small businesses and their continuity. Thepost‐Katrina investigation and research discovered a larger number of articles focusingon small businesses, but only one on SDBs. However, the following recurring themesdid emerge from the review of the small business literature search:1. The majority of SDBs and women‐owned businesses do not have a BusinessContinuity Plan, but say they need assistance in designing and developing a BCP.SERRI Report 89975-1 1

Southeast Region Research Initiative2. There is very little literature or information on SDBs in Mississippi.3. Most current programs are not designed to assist small or disadvantaged businesses.4. Most SDBs in Mississippi are single‐person enterprises that need direction, incentiveand assistance in preparing a disaster plan.5. Existing disaster related programs are insufficient and designed for aftermathmitigation and disaster recovery.6. There is a lack of preemptive solutions for community resiliency, leading to theabove problems.7. Lessons learned are only valuable if they are subsequently turned into actionableplans that then become adopted and executed by the agencies responsible fordeveloping resiliency and business continuity.8. The time to gain support for BCP development and disaster mitigation for SDBs isimmediately following a disaster when public and legislative support for anorganized effort are at its zenith.9. Plans need to be coordinated at the local and regional levels to assure directedexecution and community involvement.Operational Gaps in BCP for SDBsThe following operational gaps were found in the literature and original data fromboth SDBs and agencies offering sustainability guidance and assistance.1. The awareness that a BCP was needed increased dramatically among SDBsfollowing Hurricane Katrina.Despite this awareness, thevast majority of therespondents (65%) still donot have a BCP. A largesegment of SDBs feelprepared for a naturaldisaster even though mosthave no plan forsurvival/recovery (e.g., only35% have a plan; yet 48%believe they are prepared).Experience Business Delays Due toWeather Disasters61% NO 39% YESAdditionally, most SDBs did not understand the difference in or relationshipbetween a BCP and business planning. They view their general business plan as acontinuity plan. The SDBs have a low level of awareness of value derived from aBCP or how it differs from and should be an integral part of a business plan.2. Only when there are direct repercussions from the absence of a BCP do SDBs see thevalue or possible need for a BCP. We found that SDBs with military contracts orthose located on military reservations have BCPs as a condition of the government29%5%3%2%0%NOHurricaneFloodIce StormN/ATornadoSERRI Report 89975-1 2

Southeast Region Research Initiativecontract. These SDBs either adapted the military installation’s BCP or developedtheir own as part of their contract terms.3. There is no coordinated effort on either the state or federal levels to assist SDBs (orsmall businesses) to develop a BCP alone or as part of a standard business plan.Most universities or related agencies do not recognize or understand the differenceand relationship between business continuity planning and general businessplanning. Neither the Small Business Development Centers (SBDCs) nor theMississippi Development Authority (MDA) provides BCP assistance or have aformal system of tracking the effectiveness of general business assistance that isprovided to SDBs. Assistance provided by the SBDC and MDA is directed towardbusinesses in general with no assistance for SDBs for disaster planning or recovery.4. The SBDCs, MDA, and PDDs are the organizations most frequently cited byrespondents in the agency survey (later in the report) as responsible for providingBCP support to small businesses.However, neither the missionstatements nor the designedprogram goals of theseorganizations have any focus onBCP development in advising orassisting businesses. A review ofthe SBDC mission of providingbusiness planning supportsuggests that it is the mostlogical and available vehicle forBCP support.Sustainable Business Profile for SDBsAwareness of State And FederalAgencies Offering BCP AssistancePojasek (2007) describes a sustainable business as one which requires corporategovernance to follow appropriate risk management practices, including businesscontinuity and sustainability processes. These processes should, among other things: Remove impediments or interruptions that could deter the achievement oforganizational objectives and targets. Allow the organization to understand the probable outcome of controls and othermitigation strategies for dealing with impediments or interruptions. Allow the organization to understand how it can continue to achieve its criticalobjectives and targets should interruptions occur. Create criteria and/or triggers for implementing crisis and emergency response,continuity response, and recovery response procedures. Ensure that staff and management understand their roles and responsibilities bothduring normal operations and when a major disruption may occur.90%10%YesNoSERRI Report 89975-1 3

Southeast Region Research InitiativeRecommendations1. Assisting SDBs to become sustainable in the marketplace by helping them developbetter disaster recovery techniques and procedures can be greatly facilitated byexpanding the role of the Small Business Development Centers (SBDC) currentlyoperating within the university/community college systems. SBDCs appear to bethe most logical vehicle and designee for assisting SDBs develop businesscontinuity plans, since its total focus is on small business and their primary sourceof funding is from the federal government. The addition of a continuity plan to thecurrent business planning process is feasible and within the structure of theSBDC’s current mission, especially for those within the university systemframework.2. The lack of investigation and exploration into the operation and preparation ofsmall businesses, specifically SDBs, suggests additional research is needed intohow SBDCs can prepare and monitor the progress of SDBs as they incorporate BCPinto general business plans and build toward sustainability and resilience.This process should be documented and the research literature added to acentralized database to increase the knowledge of SDB resilience. A pilot trackingand monitoring system of SDBs that receive BCP training and developmentassistance can be developed and launched through the SBDCs to capturequantitative and qualitative measures of effectiveness, sustainability and economicsuccess of these companies. This will also confirm characteristics presented in theSDB Sustainability Profile developed as a result of this study.3. The initial BCP development and support activities should be targeted for theMississippi Gulf Coast counties of Hancock, Harrison and Jackson. The focusshould be the towns that lie either directly on the coastline or along one of its bays– Waveland, Bay St. Louis, Pass Christian, Long Beach, Gulfport, Biloxi,D’Iberville, Ocean Springs, Gautier, Pascagoula and Moss Point. Both smallbusinesses and SDBs should be included. The Sustainability Profile could also beutilized as a guide for resilience and capacity building.4. A 12‐month follow‐up survey should be administered to participants involved inthis study to determine whether actions have been undertaken by the SDBs andthe universities/agencies, as a result of their participation in this study.5. An entity should be designated to maintain the accuracy, currency and availabilityof the growing Small Business BCP/Resilience Literature Database to supportcontinued research of small business continuity and resilience planning.SERRI Report 89975-1 4

Southeast Region Research Initiative1. INTRODUCTION1.1 BackgroundBusiness continuity planning (BCP) is an important aspect of community andregional resilience in that it provides the strategy for business recovery from a disaster.The level of BCP development is a critical success factor, necessary for small businessesand especially Small Disadvantaged Businesses (SDBs) to become more resilient in theaftermath of an emergency or disaster. Research is provided to better understand theoperational gaps and lessons learned about BCP for SDBs in Mississippi. Socialvulnerability is one of the foremost explanations for the differential preparedness,impact, and response to Hurricane Katrina within New Orleans (Cutter 2005; Hartmanand Squires 2006; Laska and Morrow 2007), and along the Mississippi Gulf Coast (Cutteret al. 2006).1.2 PurposeThis portion of the research project provides empirical data on both the SDBs andthe agencies providing emergency services. The purpose of this empirical research is toprovide a better understanding of the impact and effectiveness of programs providingBCP training and information to SDBs in Mississippi. The study focuses on developingboth a business profile and sustainability profile of the SDBs in Mississippi which haveand have not participated in BCP programs. The study is to also include a profile ofprograms at universities, in the private sector, and in the government sector whichprovide support or focus on BCP for SDBs.1.2.1 Secondary ResearchThe Secondary research and literature review is focused on five primary objectives:1. Identify the various government agencies, universities, and private‐sectorprograms that provide assistance SDBs in Mississippi.2. Determine the impact and effectiveness of BCP services offered by theseagencies.3. Develop a business profile synopsis of SDBs in Mississippi which have andhave not participated in BCP programs.4. Develop a business sustainability profile of SMOB’s in Mississippi which haveand have not participated in BCP programs.5. Integrate the results to define areas which are likely research and operationalgaps in BCP for SDBs in Mississippi.This information will be integrated with the literature analysis which is designedto include a summary of issues, best practices, and lessons learned from the currentSERRI Report 89975-1 5

Southeast Region Research Initiativeliterature. This will lead to a synopsis of what is known about BCP for SDBs inMississippi.1.2.2 Primary ResearchThe primary research was designed to identify business characteristics that may beused to construct a profile of the SDBs in Mississippi, as well as a sustainability profile ofSDBs which have and which have not participated in BCP programs. Other areas ofinterest included a better understanding of the critical success factors necessary for SDBsto become more resilient in the aftermath of an emergency or disaster. The study: i)investigated the research and operational gaps for BCP for SDBs in Mississippi over theten‐year period beginning in 2000; ii) researched programs implementing BCPs for SDBsand their effectiveness; and iii) developed a SDB sustainability profile withrecommendations to achieve resilience. Future research is needed to compare, validate,and expand the findings in the research literature with practical experiences of SDBs.1.3 MethodologyThe methodology describes specific processes that are to be followed in thecollection of data. These processes constitute a generic framework and are broken downin sub‐processes.1.3.1 Literature SearchA comprehensive bibliography of potentially relevant literature on smalldisadvantaged businesses from an online database search was compiled. A contentanalysis of the literature was conducted by searching databases, includingABI/INFORM, LexisNexis, EBSCOhost, ERIC, IEEE, Google.com and Yahoo.com. Theprimary search terms used included:♦ Business continuity;♦ Business continuity planning;♦ Business resiliency;♦ Business continuity planning andresiliency;♦ Disaster recovery;♦ BCP and disaster recovery;♦ Small business disaster recovery/business continuity planning;♦ Small business continuity planning;♦ BCP for small businesses;♦ Small, minority‐owned businessdisaster recovery/businesscontinuity planning;♦ Small, minority‐owned businessdisaster recovery/BCPVariations of these terms were used but generally to no avail. The search dateswere limited to the last 10 years (2000 – present inclusive). The combined search locatedmore than 100 articles and other information, many of which were informative as to thestate of business disaster planning and recovery, though not solely focused inMississippi. In fact, there were very few articles that focused on small disadvantagedSERRI Report 89975-1 6

Southeast Region Research Initiativebusinesses and none with any mention of Mississippi. (See Appendix A, Small BusinessBCP/Resilience Literature Database, 2000 – 2010.)1.3.2 University/Agency Survey PoolA contact list of state and federal agencies, universities and private entities withsmall disadvantaged business and/or disaster planning and recovery involvement wasdeveloped by a graduate student, using federal, state and local databases of disastercontrol agencies. The lists were reviewed by the researchers to assure viability andcontinuity of the source. The targeted survey population of programs that provideservices to implement BCPs for SDBs in Mississippi included eight Mississippiuniversities and colleges, nine agencies, the ten non‐profit Planning and DevelopmentDistricts (PDDs), 11 federal agencies, and two private entities. After researching themissions and programs of the above organizations, 27 out of the initial 40 agreed toparticipate in a telephone survey, which represents a 67.5% response rate:Universities/Colleges Alcorn State University Copiah‐Lincoln Community College* Jackson State University* Mississippi State University* Pearl River Community College Southwest Mississippi CommunityCollege University of Mississippi* University of Southern MississippiMS Agencies Mississippi Development Authority Mississippi Economic Council Mississippi Emergency ManagementAgency Mississippi Management ReportingSystemPDDs Central East Central Golden Triangle North Central North Delta Northeast South Delta Southern Southwest Three RiversFederal Agencies Dept. of Agriculture, Risk ManagementAgency Dept. of Agriculture, Rural BusinessCooperative Dept. of Commerce, Minority BusinessDevelopment National ArchivesPrivate Entity Mississippi Business Journal*These universities/colleges house Small Business Development Centers (SBDCs).1.3.3 Primary Research of SDBsSmall Disadvantaged Business Sample FrameAs of May 2010, 565 minority‐owned businesses had been certified by theMississippi Development Authority (MDA) as minority business enterprises (MBEs).SERRI Report 89975-1 7

Southeast Region Research InitiativeThe terms “MBE” and “SDB” are often used synonymously throughout this exploration.Of this number, companies with four or more employees (188) were selected for thesample frame, with another 87 randomly selected state‐wide without employee size as aparameter. When the list was normalized (duplicates removed, balance of industrysegments across the counties, representative distribution among the 10 PDDs, accuratecategorization into NAICS codes), 200 SDBs remained in the survey population. Thesurvey population was further impacted by availability of business owners, erroneoustelephone numbers, and the company’s subsequent departure from the state. The 158businesses represented 21 counties in all 10 of the PDDs. There were 50 (32%) that wereno longer in business. Of the remainder, 58 SDBs owners or 37% agreed to participate ina telephone survey.1.3.4 Primary Research MethodologyTelephone SurveysTwo questionnaires were designed and developed from a list of objectivesprovided by the statement of work specifications. The questions for each were designedfor use during telephone interviews to elicit information on SDB characteristics andresiliency. One questionnaire was designed for the Mississippi SDBs and one for state,federal, university, and private entity interviews. The data collection process began bycontacting pre‐arranged agency respondents who had been designated points of contactby the universities/agencies or SDBs for disaster problems. The surveys were conductedover a 30‐day period in June – July 2010 by the research group.The survey results are included in Appendices B and C, and the survey questionnairesin Appendix D.SERRI Report 89975-1 8

Southeast Region Research Initiative2. BCP LITERATURE SEARCH AND ANALYSIS2.1 Small Business BCP/Resilience Literature DatabasePossibly the most valuable result of this research is the creation of a searchablebibliographical database of studies, reports and articles, which for the first time,specifically addresses small and disadvantaged business disaster preparedness andrecovery. The database, included as Appendix A in this report, may serve as thefoundation upon which to build a growing knowledge base of data, information andtools for small business continuity and resilience planning.This database may serve as the foundation for future study by scholars, researchersand as a source of topical information for businesses desiring to create, maintain orexpand a business continuity plan and to enhance the business’ resiliency. Researcherswill find a wealth of topical in‐depth original and secondary research to supportadditional studies in business continuity and resiliency planning. Generalists will beable to review past studies to learn more about BCP and resiliency issues, accounts andprocedures. Practitioners will have a source of practical guidance for strategic andtactical decision‐making or simply understanding the need for a resiliency and/ordisaster mitigation plan.The database is valuable to federal, state and local government agencies forplanning and development of products to assist local and regional disaster groups. Ifthis database is maintained, it will be a primary reservoir of information to assistgovernment agencies in designing resiliency programs.The database contains all of the current references used in this study and those thatare very pertinent to the topic but not expressly employed in this study. The articles,studies and reports span the 10‐year period between 2000 and 2010, inclusive to framethe Katrina period. The articles, studies and reports range from in‐depth research – bothsecondary and empirical – to newspaper accounts and published reports.It is evident in both the pre‐ and post‐ Katrina literature searches that there are nospecific articles that focused on small disadvantaged businesses in Mississippi.However, Runyan’s 2006 research did provide information on how small businesses inMississippi reacted after Katrina. Although SDBs were not specifically mentioned in theRunyan research, some of the small business owners could have been SDBs fromMississippi.The literature search shows that there is an enormous difference in the number ofpublished documents and amount of research produced on large businesses comparedto small businesses. There is an even greater void for research on small disadvantagedbusinesses, creating a significant void in information for decision‐making.2.2 Pre‐Katrina Literature SearchThis section of the report focuses on the pre‐Katrina (years 2000 through August2005) business continuity planning literature for small disadvantaged businesses inSERRI Report 89975-1 9

Southeast Region Research InitiativeMississippi (MS). The research only extends to Business Continuity Planning butprimarily to disaster recovery, as the researchers have been unable to locate literaturewithin the timeframe that focuses on SDBs. The analysis does provide a discussion ofthe fundamental issues, best practices and lessons learned about business continuityplanning from the pre‐Katrina database.A review of pre‐Katrina literature shows that Business Continuity Planning hasbeen primarily focused on disaster recovery for information technology and was defineddifferently by numerous authors. Continuity or contingency planning is essentially aplan of action that an organization employs in the event of a disaster. The plan outlinesworkplace requirements, steps and procedures for a continued operation of the business(Scarinci, 2002, p. 65). Savage (2002) states that BCP “…will ensure that the businessrecovers from a “disaster” effectively and quickly, and that business disruption anddamages are minimized and managed (p. 261). Another definition by Cerullo andCerullo (2004) states that a “BCP is designed to avoid or mitigate risks; to reduce theimpact of a crisis (i.e., disaster condition); and to reduce the time to restore conditions toa state of “business as usual” (p. 71). Depending on individual business needs, the BCPshould be developed based on each business’ unique situation (Cerullo and Cerullo,2004).According to Kubitscheck (2001), business continuity has come a long way sincethe days when contingency planning was narrowly focused on the recovery of computersystems and data, generally referred to as “disaster recovery.” “Business continuity,” asa term, grew out of the recognition that “disaster recovery” would be ineffective withoutcomplementary arrangements for the necessary human resources and infrastructure tobe in place (p. 33). Rike (2003) and Simpson (2001) state that the events that can lead tosuch disasters fall into three broad categories. These three categories are naturaldisasters, man‐made disasters and technical disasters. September 11 th changed the waythat businesses viewed business continuity planning. After this man‐made disaster,BCP moved from a “nice to have” to a “should have” plan of action and some businessesmoved to a “must have” situation (Savage, 2002).Webb et al. (2000), emphasized the lack of research on small businesses in thefollowing statement: “Although educational programs and other strategies are beingundertaken to enhance business preparedness, these programs appear to be mainlyreaching the largest businesses in particular sectors of the economy, suggesting thatmore emphasis needs to be placed on targeting smaller firms and less well‐preparedsectors” (p. 89).Webb, Tierney and Dahlhamer (2000) found that the size of the organization is themain predictor of recovery. In most situations, smaller businesses are less likely torecover than larger businesses. This may be the result of small businesses’ lack of a BCP,where larger businesses usually have employees that are focused only on BCP ordisaster recovery. In addition, larger businesses have more access to financial resources(Webb et al. 2000). They found that small businesses are more likely to depend primarilyon neighborhood customers, lack the financial resources needed for recovery and lackaccess to governmental recovery programs. In addition, “businesses in highlySERRI Report 89975-1 10

Southeast Region Research Initiativecompetitive, relatively undercapitalized economic niches, and crowded locations appearto have the most serious problems in the aftermath of a disaster” (Webb, Tierney &Dahlhamer 2002, p.56). This may be due in part to the lack of a developed continuityplan.Businesses usually have three common concerns in developing contingencyplanning (Scarinci, 2002). The three concerns are staffing, time and money. Thequestions that a business owner should consider are: Staffing: Who will implement thecontingency plan? Time: How long will it take to design and develop a plan? Money:How much will it cost to develop the plan?Scarinci (2002) suggest that to help identify potential exposure, businesses shouldconduct what‐if analysis. Some of the questions that a business owner should addressare: What if the building burns down? What if our region is devastated by a flood ortornado? What if a virus attacks our computers or networks? What if a disgruntledemployee destroys data or hardware? What if the system simply fails?In the planning process for a disaster, some authors agreed on the steps in theprocess (Scarinci, 2002; Neil, 2005; & Rike, 2003). The first step in the process is tounderstand and accept the need for a BCP. The second in the process is to design andtest the plan, and finally a business should keep the plan up to date by periodicallyreviewing the plan and making updates and improvements as needed.Additional parameters should be considered in this process to ensure an optimumresult from a BCP. McCarthy (2004) discusses that businesses should prioritizefunctions, “ranking their importance from highest to lowest and determining theresources the firm must have to restore operations within the desired time frame” (p.48).2.3 Post‐Katrina Literature SearchThis section of the report focuses on the post‐Katrina (September 2005 to present)business continuity planning literature for SDBs in the State of Mississippi (MS).Business Continuity PlanningIn a report, following the BP Gulf Coast oil spill, sponsored by the Center forNational Policy, (Flynn, Burke 2010) recommends that, “The Administration needs touse the SBA to immediately reach out to the small business community to help themwith disaster contingency planning. In addition, the SBA should work with state andlocal response and relief agencies and the U.S. Chamber of Commerce to create a smallbusinessbuddy system.”Prior to Katrina, many small businesses did not prepare for disasters. Researchshows that even after Katrina a large percent of small businesses are still not preparedfor a disaster (Aker, 2008). Although there were many warnings from the media aboutHurricane Katrina, many business owners and residents did not expect the degree ofdevastation that occurred. How did small businesses in MS react to the devastation ofthe largest natural disaster in US history (Insurance Information Institute, 2010)?SERRI Report 89975-1 11

Southeast Region Research InitiativeThe occurrence of Katrina was not preventable but the effects of the hurricane onbusiness resources were, to an extent, preventable for some business owners. In manylocations on the coast of MS, nothing short of removing all equipment and inventorywould have helped (Runyan, 2006). The lack of preparedness and planning created agap in the decision‐making process, resulting in unnecessary losses.Additional StudiesHewlett Packard conducted a study in 2007 in which it observed that 31% of smallbusinesses exist without a business continuity plan in place. One year later, a nationalsurvey of 5,000 small businesses reported that an alarming number of business ownersremain unprepared to face disasters such as hurricanes, tornados, wildfires, andcomputer viruses (Aker, 2008). In a statistical study by Office Depot in 2008, it wasfound that 40% of small businesses surveyed admitted that they were not prepared for adisaster with one‐third (27%) indicating that they have no plan of becoming prepared.Among those businesses with plans, programs range from basic emergency responseoperations (e.g., drills, equipment shutdown procedures) to fully functional and testedprograms (e.g., emergency procedures, redundant operational hot and cold sites, fullscaleexercises). Of the businesses indicating that they were not prepared for a naturaldisaster, 37% had not taken the time to prepare; 17% indicated it was too expensive; and11% don’t know what to do in terms of preparation.The situation does not appear to be improving much, when in 2010 a studyconducted in Tennessee (Banks et al.) found that at least 70% of SDB respondents didnot have BCPs in place and about 61% had not conducted a risk assessment. SDBsreported that the lack of funding, know‐how, staff and guidance were the mostsignificant impediments to their disaster preparedness efforts. SDBs considered trainingto develop a BCP critical; however, most training is conducted during their mostproductive business hours. The Tennessee study found that only 24% of SDBs had anevacuation plan in place but 73% did have business insurance to cover a disaster. Butthen at least 52% did not have an alternate site for operations in the event of anemergency or disaster.This same Tennessee study, (Banks 2010) concluded that the business owners whobecame viable in the new post‐disaster context do so because they take precautionsahead of time and respond quickly and appropriately to changes in the community,suppliers, and their markets. Although the benefits of mitigation are clearly proven andsupported by research and experience, more effective communication and articulation ofthese values is necessary to convince policy makers and the public that mitigation effortsare worth the effort and investment.A disaster recovery and business continuity study conducted in 2008 by DMGConsulting revealed that contact centers are ill‐prepared for disasters. The reportdocumented contact centers’ readiness to adapt to disruptions caused by internal systemand process changes, and benchmarked how contact centers handle disasterrecovery/business continuity, strategies, plans, and testing. Their findings indicate thatSERRI Report 89975-1 12

Southeast Region Research Initiativeless than 37% of companies are confident that their operations can withstand a disaster;60.2% of businesses are not testing their contact center infrastructure with anyregularity; only 4.7% of businesses test their disaster recovery/business continuity plansmonthly; and finally 20% of contact centers are without a written disaster recovery plan.Small businesses in Mississippi are smaller than the national average making themeven more vulnerable to a disaster. According to the 2002 U.S. Census report, therewere an estimated 30,000 minority‐owned businesses in Mississippi. Only 3% (893)made $500,000 or more per year. Whereas small businesses nationally have an averageannual income of $167,000.00, the average revenue for Mississippi small disadvantagedbusinesses is $37,831.00, significantly below average.Suggestions for ChangeThere are some obvious actions a business could undertake to improve the disasterrecovery process? One suggestion by Tom Serio, Director of Global Business Continuityfor Office Depot is to use ʺA $1 piece of media, like a CD‐R, to store data such as contactinformation and important presentations, could make a big difference in being able tokeep your business running. And it only takes minutes to back up your data on aregular basis.” (Business Wire, 2008).Olshansky, Johnson, Horne and Nee (2008) state that “the success of a recoveryprocess can be measured by its quality (the degree to which it returns the area to a stateequal to or better than before the disaster), and the speed with which this occurs” (p.275).The Runyan (2006) research provides some details on how small businessesreacted after Katrina in MS. Although SDBs were not mentioned specifically in theresearch, some of the business owners could have been SDBs. There were five majorproblems that inhibited small business from recovering after Katrina in MS., (Runyan,2006). The five problems for small business include:1. Lack of planning.2. Vulnerability to cash flow interruption.3. Lack of access to capital for recovery.4. Problems caused by federal assistance.5. Serious infrastructure problems impeding recovery.Note that the lack of planning for recovery was the number one problem for smallbusinesses after Katrina.Disaster RecoveryInventory and Equipment: Runyan (2006) found that damaged and lost inventoryand equipment represented the largest cost incurred by small business owners afterKatrina. For those businesses that were completely destroyed, the main concern forowners was to rebuild and survive financially.SERRI Report 89975-1 13

Southeast Region Research InitiativeInsurance: Unless a business purchased insurance, most business owners did nothave the funds to purchase new inventory and/or equipment. For those that did nothave insurance, the other options were the Small Business Administration (SBA) andbanks. Business owners faced difficulties in acquiring funds with SBA approval, as mostbanks require three years of financial statements and income tax returns as part of theapplication process (Runyan, 2006) and SBA guarantee. Most small businesses lost theirdata during the disaster and did not have back‐up information. This caused majorissues, since most small businesses are dependent on cash flow for day‐to‐dayoperations.Business Resumption: After Katrina, businesses had to make many major decisionswithin a short period of time. According to Runyan (2006), “These decisions includedwhether to stay or evacuate, when to return, if they left the possibility that returningimmediately would be controlled by the National Guard or FEMA, whether to rebuildor reopen, how to finance operations/inventory, when to resume, etc. Many of thesedecisions were made without the normal information for decision‐making of thismagnitude” (p. 20). There were business owners who had been through Camille, andthey reacted no differently than those who had never been through a hurricane. Out ofall the small business owners interviewed by Runyan, only two had formal disasterplans.Runyan (2006) asked the small business owners, Mainstreet Directors, andeconomic development committees about the main barriers to recovery. The answerswere that businesses lacked access to capital, cash flow, communication and employees.The lack of financial and tax documentation required by FEMA, the SBA and the lenderbanks had all been destroyed in the disaster. Many businesses subsequently failed orvoluntarily dissolved for the lack of capital. The small businesses believed thatexpedited processes from the federal agencies and corresponding lending institutionswould have prevented some of the closures.2.4 Literature AnalysisThere were no articles that focused on SDBs in MS found in either the pre‐ orpost‐ Katrina literature searches. However, Runyan’s 2006 research providedinformation on small businesses’ reactions after Katrina in MS. Although SDBs were notmentioned specifically in Runyan’s research, some of the business owners could havebeen and may have been SDBs.The literature review shows that there is an enormous gap in the amount ofresearch on large businesses compared to small businesses, and even a greater gap forresearch on SDBs. Due to the lack of research in the area of small business, specificallySDBs, additional research is needed as a foundation of information to increase theknowledge base in this area. As Runyan (2006) states, “But while large corporationssuffer from these disasters, small business owners are often hit twice – as local citizensand business owners” (p. 24). “Disasters are income neutral and color‐blind. TheirSERRI Report 89975-1 14

Southeast Region Research Initiativeimpacts, however, are not” (Susan Cutter, 2006). There were five recurring themesresulting from an analysis of the current literature:1. There is a lack of preemptive solutions for community resiliency.2. Existing programs are insufficient prevention of extreme impact or facilitation of riskanalysis, but rather designed for aftermath mitigation and recovery from theimpending disaster.3. Most current programs are not designed to assist small or disadvantaged businesses,but rather skewed for larger businesses.4. Most SDBs in Mississippi are single‐person enterprises that need direction, incentiveand assistance in preparing for disaster.5. There is very little literature or information on SDBs in Mississippi.Pre‐Katrina, best practices literature spoke primarily to larger corporations/entities.However, in a post‐Katrina environment, best practices literature begins a subtletransition to recognition of the needs of smaller organizational structures with fewerpersonnel, assets and organizational layers.Table 1 below suggests how the disaster recovery discussion is expanding toinclude business continuity activities that are less expensive to implement, less complex,and more within the fiscal and personnel capabilities of small businesses post‐Katrina.Examples are presented from studies and best practices from the following sources:• The Disaster Recovery Journal – Founded in 1987, the journal focused on disasterrecovery of information technology systems for large corporations.• Barb Rike – Is a records management and information technology consultant, whosestudies on disaster recovery were published in the Information Management Journaland are often cited in studies.• Service Corps of Retired Executives (SCORE) – Is a non‐profit organization of activeand retired executives that provides free business mentoring services toentrepreneurs and small businesses.• Agility Recovery Solutions – Is a former division of General Electric that wasfounded in 1989 to provide disaster recovery services to Fortune 5000 companies.However, in 2001 the company started a small‐medium business division.SERRI Report 89975-1 15

Southeast Region Research InitiativeTable 1. Example of literature transition from more expensive BCP activities to less expensive activities (pre- and post- Hurricane Katrina).Pre‐Katrina:Disaster Recovery Journal19991. Realistic testing of therecovery plan is required byregulatory agencies.2. Test authenticity variesdepending on the number oflocations involved.3. Perform the following tests:walk‐through, checklist,simulation, parallel, and fullinterruption.Pre‐Katrina:Barb Rike20031. Obtain top managementsupport and commitment.2. Establish a planningcommittee.3. Perform a risk assessment.4. Establish processing andoperating priorities.4. A quarterly or semi‐annual 6. Prepare the written plan.test may be prudent for thefirst year.7. Test the plan.5. The recovery team should8. Assess the damage.assess test results and analyze 9. Stabilize the environment.recommendations from teamleaders.10. Activate the in‐houserecovery team.Post‐Katrina:SCORE,20091. Review business insurancecoverage; contact insurancecarrier for appraisal.2. Prepare a disaster recovery plan.3. Keep the lines of communicationopen.4. Learn about funding availablefor disaster recoveryPost‐Katrina:Agility Recovery Solutions,20101. Assess your risk – bothinternally and externally.2. Assess your critical businessfunctions.3. Prepare your supply chain.4. Create an emergencymanagement plan.5. Perform data collection. 5. Put a back‐up computer in place. 5. Back‐up your data.11. Restore the area.6. Create a crisis communicationplan.7. Assemble an emergency kit.8. Review your insurancecoverage.9. Plan for an alternate location.10. Test your plan.SERRI Report 89975-1 16

Southeast Region Research Initiative3. EFFECTIVENESS OF MISSISSIPPI PROGRAMS THAT PROVIDEBCP SUPPORT TO SDBs3.1 PurposeThe objective of this part of the Research is to determine the effectiveness ofMississippi (MS) programs that provide BCP development support to SDBs. In one partof the study program descriptions were gathered and telephone interviews conductedwith organization representatives that agreed to participate in the study. In the secondpart of the study SDB owners were contacted for an individual telephone interviewrelative to their BCP practices and the level of support received from MS programsoffering BCP assistance.3.2 BCP Survey FindingsThe findings from the research are discussed in the sections below and tables ofdata are available in Appendices B and C.3.2.1 BCP QuestionnairesSeparate telephone interview questionnaires were designed for each of the twodata gathering episodes. One gathered information from the federal and state agenciesand the universities about the type of BCP services provided to SDBs. The otherquestionnaire gathered information from the SDBs about their BCP practices and thesupport provided to them by programs designed to assist businesses.The federal/state/university survey questions elicited the following type of information: Whether they provided BCP support services and if so, what type? Difference in services for small businesses versus small disadvantaged businesses, ifany. When did they begin a focus on BCP? What type of tracking and monitoring of BCP services do they conduct? Whether services tracking data is publicly available. Are they aware of other organizations that provide BCP services to SDBs?The SDB survey questions elicited the following type of information: Whether they had experienced business delays as a result of a natural disaster. The type and occurrence of the delay. Whether any government or private assistance was received to recover. Whether they had a BCP and if so, had it been exercised? Whether they were aware of state or federal agencies providing BCP developmentassistance.SERRI Report 89975-1 17

Southeast Region Research Initiative What services would benefit the company in developing a BCP? Whether SDBs believe they are prepared for a natural disaster. Company demographics.The survey questionnaires are included in Appendix D.3.2.2 University/Agency Survey FindingsAmong the 27 university and agency respondents, two reported providing BCPservices to small businesses and SDBs. However, they actually provide businessplanning services that do not include BCP, other than insurance advice. When askedwhether they conduct follow‐up with the SDBs to whom they provide services, the twoagencies that responded utilize surveys, email and informal discussions while speakingwith SDBs. There is no formal monitoring and/or tracking system or analysis of programdeliverables or effectiveness in place. When asked, respondents either are not aware ofother agencies that provide BCP services or the two that they believe do provide BCPservices actually do not. This was confirmed in our interviews with the two agenciesthat were believed to be delivering BCP services. Complete university/agency surveyresults are provided in Appendix B.3.2.3 SDB Survey FindingsThe majority of the owners of SDBs in this study are African‐American and male.The largest single group of SDBs is located in Hinds County with 44%, followed by ClayCounty with 11%, with the remaining 45% in the remaining 21 counties. Almost threequarters of the businesses have been in operation for 10 years or longer.Construction is the largest single industry represented in the study at 25% of thetotal. Scientific/Professional services (20%), Information Technology (10%) andArchitectural & Engineering (10%) represent the next largest as a group representing40% of firms in the study at the top of the list. These industries are important to therecovery of a devastated area, since construction is the most called up segment followinga disaster and most businesses rely very heavily upon IT services to keep operationsrunning.Awareness of the need for a BCP increased dramatically among SDBs followingHurricane Katrina. Still, the vast majority of respondents do not have a BCP. SDBs feelprepared for a natural disaster, even though they have no plan for survival/recovery(e.g., 35% have a plan; yet 48% believe they are prepared). Very little information or BCPassistance is provided to SDBs from the state or federal level. Most SDBs did notunderstand the difference in or relationship between BCP and business planning. In anumber of studies, (i.e., Alesch [2001] and in Runyan [2006]) small businesses believedthat FEMA and the SBA could have been more helpful by reducing barriers to recovery.SERRI Report 89975-1 18

Southeast Region Research InitiativeTwenty‐two percent of survey respondents with BCPs are located on militarybases, where it is a requirement for a federal contract. While this is admittedly a smallsurvey pool, this type of incentive may have merit and should be researched further.Complete SDB survey results are provided in Appendix C.3.3 Mississippi Programs that Provide Services to SDBsResearch was conducted to compile, compare, and assess the impact andeffectiveness of programs in Mississippi which provide BCP support to SDBs. Themission of providing business planning support to SDBs in Mississippi is primarilyfunded through the university‐based SBDC system, the Mississippi DevelopmentAuthority (MDA) and the private, non‐profit Planning and Development Districts(PDDs). The research shows that none of these organizations provides BCP services forsmall businesses or SDBs.The following descriptions of the programs offered by the SBDCs, PDDs, andMDA were obtained from their related websites:3.3.1 Small Business Development Centers (www.mssbdc.org/events.aspx)The online services are provided by the SBDC to small businesses over a 12‐monthperiod, scheduled in two‐hour workshops: First Steps to Starting a Business: This seminar outlines the basic steps to start abusiness. Topics include: regulations such as licenses and permits; legal forms ofbusiness ownership; basic marketing concepts to help analyze the revenue potential;lending terminology; outline for a business plan and other resources to assist instarting a business. Let’s Find a Deal: This seminar helps entrepreneurs understand the processes to useto conceptualize and analyze a business idea into a business venture. Once anentrepreneur understands the process of analyzing a business venture, they are ableto repeat the process until they find a successful business venture. The seminar istaught by a person who has analyzed hundreds of business ideas, and started andsold multiple businesses. How to Develop a Business Plan: This seminar is designed to assist in preparing abusiness plan. The parts of the business plan are explained (i. e., industry research,description of company products and services, identifying target customer groups,and a marketing plan). Financial components discussed are startup costs andpreparation of a projected cash flow statement. Business Issues: The Business Issues seminars are designed to offer different topicsof interest to small business owners. Each seminar will cover a different issue.Examples of topics that will be covered are: Financing; Managing a Business;SERRI Report 89975-1 19

Southeast Region Research InitiativeManaging Employees; Human Resources; Customer Relations; Accounting;Budgeting; Real Estate; Cash Flow Management; Tax Planning; Marketing/Advertising; Family‐owned issues; Franchising; Insurance and various other issues. 2 nd Annual Business Conference for Women: This conference is catered tominorities and women that are interested in economic development. Seminarsinclude: understanding money and credit, business law, innovation, leadership,contracting, and the state of the economy. A panel of subject matter experts aregenerally on hand to offer their knowledge to participants. How to Start a Business in Mississippi (An Entrepreneur’s Handbook) wasprepared by the University of Mississippi in the Summer of 1996 – nine years beforeHurricane Katrina.There is no mention of BCP or Disaster recovery mentioned in the presentations ordirections for gaining more information on either subject. Neither Business continuitynor disaster recovery is part of the current programs available.3.3.2 Planning and Development Districts (www.cmpdd.org/mapdd.php)Research and interviews with the 10 Planning & Development Districts, authorizedby the Mississippi Legislature, revealed that the PDDs are private, non‐profitcorporations created to promote regional economic development, with close ties to stateand local governing authorities. Created in the late 1960s, in 1971 the Governorstandardized regional economic development and planning boundaries and designatedthe PDDs as Mississippi’s official sub‐state regions, eligible for federal matching grantincentives. PDDs’ status as governmental service providers, chartered for a publicpurpose warrants legislative interest in their accountability for the use of publicfunds. Although federal and state agencies review specific programs, they have nocharter to routinely oversee PDD programs or finances on a comprehensive basis.None of the districts provide business continuity planning or disasterpreparation/recovery services. Their focus is on economic development (which includessmall business loans). Business assistance with designing a BCP is not identified as an“economic” issue. However, some PDDs did refer us to the MDA as a source of supportfor BCP assistance, further investigation found no it not to be part of MDA’s mission orpeograms.The following program description is taken from the Mississippi Association ofPlanning & Development Districts website, www.cmpdd.org/mapdd.php. As of 2010,the following services were provided by the PDDs to small businesses. The website alsostipulates that not all services are offered by all districts.SERRI Report 89975-1 20

Southeast Region Research InitiativePDD Program DescriptionGrant Programs Appalachian Regional Commission Community Development Block Grant Delta Regional Authority Department of Justice Department of Environmental Quality Department of Public Safety Department of Wildlife Fisheries & Parks Economic Development Administration FEMA Home Investment Partnership Program Rural Development Administration Small Municipality and Limited Population CountyMapping Services Geographic Information Systems Industrial Parks Land Use Redistricting ZoningPlanning Assistance Community Facilities Comprehensive Planning Economic Development Hazard Mitigation Homeland Security Solid Waste Management Strategic Planning Subdivision Regulations Tourism Development Transportation Planning Zoning OrdinancesEconomic Development Empowerment Zone Enterprise Zone Job Creation Rural Renewal Community Tourism DevelopmentLoan Programs Appalachian Regional Commission Economic Development Administration Capital Improvements Community Development Block Grant Minority Business Enterprise Rural Development Administration Small Business AssistanceTechnical Assistance Census Data Affiliate Clearinghouse Coordinator County Circuit Rider Data Center Grant Writing Housing Redistricting Survey AssistanceComputer Services Automation E‐mailing Fiscal Management Imaging Internet Assess Networking Solid Waste Billing Web Page Hosting and DesignSERRI Report 89975-1 21

Southeast Region Research InitiativePDD Program Description (cont’d.)Workforce Development ABE/GED Preparation Counseling Employment Preparation Job Creation Job Placement Job Search Skills Training Job Training Literacy Training WIN Centers Youth ProgramsChild Care Management Certification Eligibility Determination Monitoring Quality ServicesArea Agency on Aging Adult Day Care Advocacy and Case Management Congregate and Home Delivered Meals Elder Abuse Prevention Emergency Response/ Energy Assistance Homemaker Services Information, Referral and Outreach Legal Assistance Long Term Alternatives Care Medicaid Waiver Program Insurance Counseling and Assistance National Family Caregiver SupportProgram Nursing Home Ombudsman Services Respite Services Senior Employment Services Transportation Services3.3.3 Mississippi Development Authority (www.mississippi.org)The MDA’s Entrepreneur Center provides financial, marketing, management andtechnical assistance to businesses. The following programs are typical services provided:General Business Assistance Assistance developing business plans General start‐up information Information on licenses and permits Counsel on business strategies Analysis of management strengths andweaknessesFinance and Accounting Recommending sources of loans andfinancial assistance Assistance with loan applications Analysis of financial statements Assistance with financial projections Counseling on cash flow and workingcapitalMarketing Assistance identifying new markets Identifying potential customers Assistance developing marketing plans Advice on marketing strategies Counsel on forecasting sales Providing input on new product ideasRetail Assistance Assistance with store‐specific issuesSeminars How to Start Your Own Small Business Marketing Your Small Business How to Design a Retail Store How to Prepare for Trade Shows Servicing Your CustomersSERRI Report 89975-1 22

Southeast Region Research Initiative3.3.4 Other Community and Business Development InitiativesThe study also researched other community and economic development initiativesoutside Mississippi and found that none of the organizations reviewed had programs ora mission designed to deliver BCP for small businesses. Programs reviewed are listedbelow: Appalachian Regional Commission Enterprise Corporation of the Delta Southern Rural Development Center TN Valley Authority Economic Development (has operations in 36 MS counties)SERRI Report 89975-1 23

Southeast Region Research Initiative4. BCP GAP ANALYSIS4.1 PurposeAn analysis of the research in the literature and survey results presented in thisreport suggests the following gaps exist in the focus on and implementation of businesscontinuity planning among SDBs in Mississippi:4.2 BCP Gap Analysis1. No coordinated effort exists to assist SDBs (or small businesses) to develop BCPs atthe state or federal level. The SBDCs, MDA, and PDDs are the organizations mostcited by respondents as responsible for providing BCP support to small businesses.However, neither their missions nor their programs address that objective. Figure 1below prioritizes the BCP support that SDBs said would benefit them:Best Practices, 2%Training, 2%Reduce Risks, 5%Preparing for NewEnviron, 6%Coor w/ EMA, 11%Assess Risks, 16%BCP Support That Would Benefit SDBs31% Insurance Discount27% Assistance Developing BCP16% Assistance Assessing Risks11% Coordination with EMA6% Preparing for the NewEnvironment (after the disaster)5% Assistance Reducing Risks2% BCP Training2% Best Practices InformationDevelop BCP, 27%Ins. Discount, 31%Figure 1. BCP support that would benefit SDBs.SERRI Report 89975-1 25

Southeast Region Research Initiative2. There is a need to improve the understanding of the difference and/or interrelationshipbetween BCP and business planning.3. A formal system for tracking the effectiveness of assistance delivered to SDBs doesnot exist in Mississippi.4. Awareness of the need for a BCP increased dramatically among SDBs followingHurricane Katrina. Still, the vast majority of respondents do not have a BCP.5. A large segment of SDBs feel prepared for a natural disaster, even though mosthave no plan for survival/recovery (e.g., only 35% of the survey respondents havea plan; yet 48% believe they are prepared).6. SDBs receive very little information or BCP assistance from the state or federallevel.7. Most SDBs did not understand the difference in or inter‐relationship of a BCP andcommon business planning.8. The small businesses believed that expedited processes from federal agencies andcorresponding lending institutions that provide emergency assistance to SDBscould help prevent some of the business failures resulting from disasters.9. Incentives such as discounts on insurance and assistance developing a BCP shouldbe investigated and considered as a mechanism to encourage greater engagementin disaster planning.10. A limitation to this study’s survey results is the significant influence by the skew ofthe number of Hinds County respondents (44%) and the limitations inherent in thesize of the survey pool. Hinds County shares the capital city of Jackson and islocated in central MS, rather than being a coastal county. The two Gulf Coastcounties with the next largest percentage of BCPs were Hancock (11%) andHarrison (5%). It is possible that a more focused study should be conducted ofSDBs in the three Gulf Coast counties of Jackson, Hancock and Harrison, wherenatural disasters are more frequent.SERRI Report 89975-1 26

Southeast Region Research Initiative5. SUSTAINABLE BUSINESS PROFILE FOR SDBs5.1 PurposeAn objective of this research is the development of an SDB Sustainability Profilewith recommendations on how to achieve resilience. To accomplish this, we conductedresearch to compare, validate, and expand the findings in the research literature withpractical experiences of SDBs.None of the SDB survey respondents have participated in BCP programs inMississippi and none of the university/agency survey respondents provide BCP services.Therefore, the following analysis is developed from the research literature and thepractices of successful small businesses not included in this survey process.5.2 What is Business Sustainability?The Environmental Quality Management Journal (Pojasek 2007) defined BusinessSustainability as a means for achieving an organization’s vision and mission. It can bedescribed as the application of knowledge, skills, tools, and techniques to theorganization’s activities, products, and services. The principles of good corporategovernance require organizations to follow appropriate risk management practices,including business continuity and sustainability processes, in order to accomplish thefollowing: Provide context within which the organization addresses its activities, products, andservices. Identify critical objectives and targets (stemming from the organization’s vision andmission) that must be achieved. Remove impediments or interruptions that could deter the achievement oforganizational objectives and targets. Allow the organization to understand the probable outcome of controls and othermitigation strategies for dealing with impediments or interruptions. Allow the organization to understand how it can continue to achieve its criticalobjectives and targets should interruptions occur. Create criteria and/or triggers for implementing crisis and emergency response,continuity response, and recovery response procedures. Ensure that staff and management understand their roles and responsibilities bothduring normal operations and when a major disruption may occur. Ensure that there is a clear understanding throughout the organization of whataccountabilities and responsibilities are in place when there is an emergency or amajor stakeholder issue, and ensure that this understanding remains current. Build consensus and commitment to the requirements, implementation, anddeployment of business sustainability and continuity, which are integrated as part ofthe routine way the organization conducts its business.SERRI Report 89975-1 27

Southeast Region Research InitiativeThe Community & Regional Resilience Institute (CARRI) defines the characteristicsof a resilient business as: Anticipating: problems, opportunities, potential for surprises. Reducing Vulnerabilities: related to development paths, socio‐economic conditions,sensitivities to possible threats. Responding: effectively, fairly, and legitimately. Recovering: rapidly, better, safer and fairer (objectives which may not alignperfectly, calling for widespread community participation in strategy development).Organizations at Risk: What Happens When Small Businesses and Not‐for‐ProfitsEncounter Natural Disasters (Alesch et al. 2001), a longitudinal study covering more thana decade, concluded that an organization can be considered to have failed as a directconsequence of a natural hazard event under the following conditions:1. When there is a formal declaration of bankruptcy and the business closes.2. When it is placed in receivership for purposes of liquidation of its remaining assets.3. When there is informal bankruptcy; that is, when the owner closes the door andwalks away forever or when neither the original firm nor the entrepreneur can befound and nothing is left but a memory.4. When the entrepreneur continues doing business, but at a significantly lower levelthan before the event – a level that systematically and regularly fails to meet fixedplus variable costs and that has little prospect of continued viability.5. When the organization’s failure can be attributed immediately and directly to thenatural hazard event.5.3 SDB Sustainability ProfileThe following SDB Sustainability Profile in Table 2 encourages processes that areinexpensive to implement, embodies the principles of quality management, reducesrisks, and encourages collaborative efforts. It is aggregated from studies of successfulSDBs and small businesses that have successfully recovered from disasters; that practiceeffective risk management; that embody the principles of quality management; and thatmeet the broad definition of sustainability described above:SERRI Report 89975-1 28

Southeast Region Research InitiativeTable 2. SDB Sustainability Profile Provides essential goods and services,thereby creating customer value. Works with neighboring businesses,civic associations, chambers ofcommerce, and local governments toaddress community needs to improvethe overall business environment. Purchases adequate business insuranceto finance risks to loss. [See Table 3,description of business insurancesuggested by the Public Entity RiskInstitute (PERI)]. Reduces risk: determines upon whatassets and resources the business reliesto achieve its objectives. (See low‐costrisk mitigation strategies for SDBsbelow.) Incorporates BCP as a component ofthe Business Plan. Exercises andupdates it at least annually. Is headed by a flexible and innovativeentrepreneur, able to recognize andadapt to a post‐event market for goodsand services. Has diversified the locations andsuppliers of the organization’s essentialsupply chain inventory. Actively monitors changes in thebusiness environment and aligns thevalue of it products/services to itsclient base. Tests its value proposition,e.g., research the market on what itwants now and what it will want in thefuture. Develops a BCP and markets it as acompetitive advantage. In the face of change, is able to devisehighly effective strategies that mayinclude moving to other places,changing the business’ products orservices, or changing processes. Streamlines processes to support itscompetitive advantage, while alsoidentifying inappropriate activities. Has a diversified customer base –affluent as well as lower incomecustomers, customers in more than onelocation. Compares its performance with that ofthe best performers and accuratelymeasure any gaps.SERRI Report 89975-1 29

Southeast Region Research InitiativeOptions for Small Business InsurancePublic Entity Risk Institute (PERI) suggests that the following list of businessinsurance options should be considered by small businesses to finance against risks andunforeseen losses:Table 3. Options for Small Business Insurance. Workersʹ Compensation and Employersʹ Liability Insurance – Workersʹcompensation coverage is mandatory in most states, and provides the benefitsrequired by the applicable workersʹ compensation statute for employees whosustain a work‐related injury or illness. Employersʹ Liability Insurance, which isusually included as part of a Workersʹ Compensation policy, covers theemployerʹs liability for an employee work‐related injury or illness that is notcovered by any workersʹ compensation statute. Business Auto Insurance – Covers the businessʹ liability for bodily injury andproperty damage to others arising from its operation of motor vehicles. Alsocovers the business for physical damage to its motor vehicles. Most states requiresome form of auto liability insurance for registered motor vehicles. Commercial Property Insurance – Covers the business for certain types ofdamage to, or loss of, real and personal property, including flood, fire and othercommon hazards. Equipment Breakdown/Boiler and Machinery – Covers loss caused by thesudden and accidental breakdown of covered equipment. Most of the lossescovered by equipment breakdown coverage are excluded by commercialproperty policies. Commercial General Liability Insurance ‐ Covers the insuredʹs liability to othersfor property damage, bodily injury, personal injury or advertising injury arisingfrom the insuredʹs premises, operations, and products, subject to exclusions for avariety of causes of loss, which are often covered under more specialized policies. Professional Liability Insurance – Covers liability arising from professionalservices provided to clients. Crime Insurance – Covers money, securities, and other types of property againstloss due to theft by employees or others, burglary, robbery, extortion, andcomputer fraud. Business Interruption and Extra Expense Insurance – Covers the business forloss of income caused by interruption of its business activities due to physicaldamage to covered property, and for additional expenses the business incurs aftersuch damage to avoid or reduce business interruption.Source: Public Entity Risk Institute (PERI).SERRI Report 89975-1 30

Southeast Region Research Initiative6. RECOMMENDATIONS FOR LOW‐COST MITIGATIONSTRATEGIES FOR SDBsThese mitigation strategies are directed toward companies with less than tenemployees, corresponding to the majority of the companies responding to this survey.Not all of these strategies are necessarily available to every small business. However,most of the following strategies cost less than $200 to implement (Banks 2010).Additional research is needed to better understand the needs of SDBs, it is also clear thatthere are steps that can be taken to mitigate a complete business failure.6.1 SDB Mitigation Strategies1. Key employees should be involved in the design and development process of afirm’s Business Continuity Plan (BCP). The list should include employees familiarwith the equipment, hardware/software, payroll process, vendors and other criticalaspects of the business.2. Establish a list of potential succession and a set of procedures for managementduring an emergency including individual responsibilities.3. Most businesses have just a few truly key functions or processes and resources thatneed to be identified and targeted for protection at all costs. Be prepared byunderstanding the exact requirements in the target areas. The questions can beapproached in tow ways: 1) What is the most important function of the business,the one thing that keeps it going? 2) What would be the worst thing to happen tothe function? The procedures should be designed to keep the most importantfunction operational and prepare to defend against the worst possible event.4. Determine what production machinery, computers, systems and other essentialequipment is needed to keep the business open and operating. Be prepared forutility disruptions with redundant systems such as a portable generator. The planshould involve the suppliers, shippers, and others who regularly do business withthe firm to help developing the plan. Designate a contact person to communicatewith customers and vendors during the recovery period.5. Ensure that those involved know their responsibilities and required action in caseof an emergency. A safety coordinator should be appointed—someone assignedthe responsibility for making sure all emergency equipment works, planningsafety reviews and drills, developing evacuation plans, etc.6. A designated person to implement redundant or alternative power sources,communication links, data back‐up technologies, and data recovery methods.Information and important documents stored on paper and computers should beSERRI Report 89975-1 31

Southeast Region Research Initiativecopied and saved on both the hard dive and on a backup device at an offsitelocation away from the main business site.7. It is important that everyone is familiar with the emergency plan and knows theirindividual responsibility before the disaster hits. Designate a contact person tocommunicate with employees using an emergency contact list or employee contacttree in the event the disaster occurs after work hours and/or there is no electroniccommunication links.8. Review your insurance coverage to make sure you understand what is notcovered. Normal hazard insurance does not cover all exposures making itnecessary to consider additional forms of insurance. It is important to understandwhat the insurance does not cover to determine what is needed. Disaster RecoveryJournal (2010) had these recommendations to reduce the cost of insurance:a. Present a sanitized version of your BCP to the insurance company.b. Give special attention to the frequency of tests and the results, as well as anyresearch that was produced regarding the likelihood of each risk.c. An up‐to‐date BCP often qualifies the company for discounts and can be usedin cost negotiations.9. The National Flood Insurance Program provides coverage to property owners. TheNFIP Web site at www.floodsmart.gov provides information on commercialinsurance coverage.10. Business interruption insurance covers operating expenses, such as utilities, andprovides compensation for lost income stemming from a temporary closure. Meetingwith an agent who understands the needs of the business and can offer variousinsurance options will provide valuable information on assets in peril and coverageneeds.11. Purchase and maintain adequate reserves of food, water, batteries, and medicalsupplies. Install fire detection and suppression systems.12. Meet with and share information with other businesses in your building orindustrial complex. Are they doing something that you overlooked?13. Develop a plan to work out of a facility out of harms way when needed. Firms thatsurvived and attained viability (Alesch 2001) within the new environment werethose where the owner/operator adapted, consciously or unconsciously, to the newrealities surrounding them.14. Develop professional relationships with more than one supplier company in casethe primary contractor is unavailable. A disaster that shuts down a key suppliercan be devastating to your business. The business should be prepared to relocateSERRI Report 89975-1 32

Southeast Region Research Initiativetemporarily and have alternatives if the current suppliers shut down. Employeesneed to know what to do in case of an emergency.15. Create a contact list for critical business contractors and others you plan to use inan emergency. Keep this list with other important documents on file, in youremergency supply kit and at an off‐site location.16. Scrutinize key vendors and make certain that they have a business continuity planin place. It is important for key vendors to have the ability to respond with theneeded supplies or expertise in the appropriate volume at critical times.17. Talk with first responders, emergency managers, community organizations, andutility providers. Ask them for information on how best to get your business upand running as soon as possible in the event of an emergency or disaster.6.2 Marketing BCP to SDBsEncouraging SDBs to embrace BCP strategies requires a cultural change andparadigm shift among a vulnerable business segment. The argument to support thisshift must be packaged in terms that are readily understood as providing economicvalue. The value proposition for developing a BCP is outlined in Table 4 below:Table 4. Marketing BCP to SDBs.A BCP can help reduce the cost of insurance.Sources: Risk Management Magazine, Oct.2005; Business Continuity Institute,www.continuitycentral.com/news02036.htm)A BCP can make it easier to borrow moneyfrom financial institutions.Competitive Advantage – A BCP can beused as a marketing tool to differentiate theorganization from its competitors.A BCP will help deal with external events,such as supply chain disruptions.Every $1 spent on mitigation saves $7 inrecovering from disaster‐related losses.Source: Houston Advance Research CenterA company may achieve “stand‐outstatus” in the market if it successfullyhandles a business interruption when itscompetitors fail.Developing a well‐functioning BCP cancost as little as $500.Effectively handling a businesscontinuity incident can have a positiveeffect on a company’s market value.A BCP will help increase the chances ofrecovering more quickly from a disaster.A BCP helps identify critical operationsthat must continue uninterrupted in caseof power loss, weather shutdowns, waterleaks, minor fires, etc.SERRI Report 89975-1 33

Southeast Region Research Initiative7. OPPORTUNITIES FOR SERVICE AND RESEARCH EXPANSION7.1 Education, Training and Service OpportunitiesBased on the results of this research, the Tennessee Gap Analysis of BCPs for SDBs(Banks et al. 2010), and the Alesch et al. 2001 longitudinal study, the researchers offer thefollowing opportunities for expansion in this area:1. Small businesses are the life blood of a community and are desperately needed forlocal supplies in the event of a disaster. Communities rely upon the small localbusiness to provide food, drugs and fuels to sustain an existence through theperilous periods immediately following a disaster. SDBs often times are the onlyproviders of supplies in a community and are needed by the residents in thatcritical period following a disaster. To perform this needed community functionsmall businesses must be prepared with a survival plan to continue the businessimmediately following a major disaster.A BCP is a program designed by a business that outlines the processes andprocedures to follow and remain in operation immediately following a disaster.The primary need in Mississippi is for small businesses, as well as SDBs, to remainin operation as they serve the community at large and often a regionally remotepopulation. The small businesses and SDBs are also located in the more populousareas of the Gulf Coast region and are an integral part the community at large.A plan of action in Mississippi and the adjacent Gulf states is the designing of anefficient means to develop a BCP that is effective and cost‐efficient for a smallbusiness. The first piece would be a tutorial to show businesses the benefits of aBCP; how it will increase their survival rate; and how to get back up andfunctioning more quickly. The second piece would be an expert system that willwalk entrepreneurs through the BCP process.An Expert System is a computer application that performs a task or providesinformation that would otherwise be performed or delivered by an expert in thefield. For example, there are expert systems that diagnose human illnesses,complete personal tax returns, and others schedule routes for delivery vehicles,such as FedEx. Not all expert systems are designed to replace the human experts.Some are developed to aid experts in unusual and non‐redundant tasks. Expertsystems are part of a general category of computer applications known as artificialintelligence.2. Based in the current university system, the Small Business Development Centers(SBDCs) appear to be the most logical and appropriate vehicle for disseminatingthe BCP information, including the information tutorials and an expert system. AsSERRI Report 89975-1 35

Southeast Region Research Initiativethe environment has changed since the establishment of the SBDC system in 1976,its mission or an objective should include BCP assistance for small businesses.The U.S Small Business Administration (SBA) administers the Small BusinessDevelopment Center Program to provide management assistance to current andprospective small business owners. The program is a cooperative effort of theprivate sector, the educational community and federal, state and localgovernments. It enhances economic development by providing small businesseswith management and technical assistance. There are now 63 Lead SBDCs ‐‐ one inevery state (Texas has four, California has six), the District of Columbia, Guam,Puerto Rico, Samoa and the U.S. Virgin Islands ‐‐ with a network of more than 900service locations. In each state there is a lead organization which sponsors theSBDC and manages the program. The lead organization coordinates programservices offered to small businesses through a network of subcenters and satellitelocations in each state. Subcenters are located at colleges, universities, communitycolleges, vocational schools, chambers of commerce and economic developmentcorporations.3. To enhance the existing educational opportunities afforded by the SBDCs andMDA, it is recommended that a pilot tracking and monitoring system of SDBs thatreceive BCP training and development assistance should be designed andlaunched through one or both of these organizations that captures quantitative andqualitative measures of effectiveness, sustainability and the economic success ofthese companies. The pilot could be conducted over a 12‐ or 24‐month period.Then a full range of sustainability data will be available to profile the businesses.4. The literature review revealed that existing programs are insufficient anddeveloped primarily for aftermath mitigation and disaster recovery. Based onresults of this study, an opportunity exists to launch a pilot program for SDBscertified by the MDA that applies the Sustainability Profile as a guide for resilienceand capacity building in these companies. The pilot could be operated through theSBDCs, which are already located on university/college campuses. An incentive forparticipation in the program is the acquisition of a tool for “competitiveadvantage.”The literature review, the absence of focus on sustainability of small disadvantagedbusinesses, their economic devastation resulting from natural disasters, and thevulnerability of the population segment they generally serve would warrant SDBs’classification as a “special needs group.”5. A 12‐month follow‐up survey should be administered to participants involved inthis study to determine whether actions have been undertaken by the SDBs or theuniversities/agencies, as a result of their participation in this study.SERRI Report 89975-1 36

Southeast Region Research Initiative6. Providing direct encouragement and incentives to SDBs to develop businesscontinuity plans (BCPs) as part of their business plans would make resilience partof the process of “doing business.” Non‐governmental organizations (NGOs) thatsupport SDBs could implement programs to assist development of BCPs, orprovide incentives tied to certification for plans meeting specific criteria, such asthose developed through PS‐Prep for Small Business enrollment.7. SDBs seeking BCP certification will need assistance navigating the process. Oneway is through coordination with the FEMA PS‐Prep for Small Business programin formulating small business criteria. Assistance that would be helpful includes:a. Provide support for SDBs enrolled in the PS‐Prep self‐certification process byproviding broad technical assistance and incentives that promote the benefitsof resilience and sustainability.b. Offer online and classroom education, possibly based in the SBDCs located onHistorically Black Colleges and University (HBCU) campuses.c. The Small Business Administration (SBA) could offer “credits” for BCPcertification or incorporate PS‐Prep into the SBA program.d. FEMA could publish a quarterly BCP/Emergency Management newslettertargeted to the SDB market; partner with SDB business associations; and solicitinput from SDBs and small businesses engaged in the resilience initiative.7.2 Research Expansion Opportunities1. The current research and literature review indicates that very little information isavailable on the parameters for SDBs BCP needs. Some deficiencies are discoveredfrom the current research but little is known of the detailed requirements of theSDB. Additional research into the motivating factors for SDBs would provide thevenue for delivering them the needed BCP programs. SDBs have declined orignored opportunities to gain a BCP for their firms and the reasons for thisavoidance will be valuable information for agencies when planning programs forSDBs.2. The three Mississippi Gulf Coast counties receive the brunt of Hurricane activity inthe state. In addition, these counties receive residual storm activity fromhurricanes as far away as Florida, Louisiana and Alabama. The businesses in thesethree counties are the most vulnerable in the state and possibly along the entireU.S. Gulf Coast line and they serve a less mobile, more disadvantaged population.Research into the needs and requirements for a BCP would provide the basis fordeveloping sustainability and a faster disaster recovery that not only benefits thebusiness but the general population served by the SDBs.SERRI Report 89975-1 37

Southeast Region Research InitiativeBCP development and support initiatives should target the Mississippi Gulf Coastcounties of Hancock, Harrison and Jackson. The primary focus of this researchshould be the towns that lay either directly along the coastline or one of its bays –Waveland, Bay St. Louis, Pass Christian, Long Beach, Gulfport, Biloxi, D’Iberville,Ocean Springs, Gautier, Pascagoula and Moss Point. The Sustainability Profilecould also be utilized as a guide for resilience and capacity building.SERRI Report 89975-1 38

Southeast Region Research Initiative8. SUMMARYIn both the pre‐ and post‐ Hurricane Katrina literature search, we were unable tofind specific articles that focus on small disadvantaged businesses (SDBs) in Mississippi.There are only a few articles that focus on small businesses and even fewer articles thatfocus on SDBs in any state during the period under study. Webb et. al, (2000),emphasized the lack of research on small businesses in the following statement:“Although educational programs and other strategies are being undertaken to enhancebusiness preparedness, these programs appear to be mainly reaching the largestbusinesses in particular sectors of the economy, suggesting that more emphasis needs tobe placed on targeting smaller firms and less well‐prepared sectors.” (p. 89)Runyan’s (2006) research provided information on how small businesses in MSreacted after Katrina. Although SDBs were not mentioned in Runyan’s research, someof the business owners could and probably were minority business owners.The literature review shows that there is a large gap between the amount ofresearch on large businesses compared to small businesses, and even a larger gap forresearch on SDBs. While, awareness of the need for a BCP increased dramaticallyamong SDBs following Hurricane Katrina, the vast majority of respondents from anumber of surveys still do not have a BCP. Awareness of the results of not having a BCPor the need for one has not translated into the desired actionable risk management steps.Since there is a lack of research in the area of small business, specifically SDBs,additional research is needed to gain the requisite knowledge, advance the concept withSDBs and gain the acceptance. As Runyan (2006) states, “. . . but while large corporationssuffer from these disasters, small business owners are often hit twice; as local citizensand business owners” (p. 24). “Disasters are income neutral and color‐blind. Theirimpacts, however, are not” (Susan Cutter, 2006).Developing more sustainable small and disadvantaged businesses can be greatlyfacilitated by expanding the role of the Small Business Development Centers (SBDC)currently operating within the university/community college system. SBDCs appear tobe the most logical venue for BCP support, having its total focus on small businesses andreceiving its primary funding from the federal government. As the environment haschanged it is evident that the SBDC system should incorporate business sustainabilityand resilience into its business planning and education support system, including smalland disadvantaged businesses.SERRI Report 89975-1 39

Southeast Region Research Initiative9. REFRENCESAdkins, Gabriel L., Thornton, Tyler J. and Blake, Kevin, A Content Analysis InvestigatingRelationships between Communication and Business Continuity Planning, University ofOklahoma, 2009.Agility Recovery Solutions (2010, June 22). 10 Steps To Business Preparedness.Retrieved from http://www2.agilityrecovery.com/assets/SBA/PMB10steps.pdfAker, J. (2008). Survey Says: 42 Percent of Small Businesses Lack Disaster Plans.Buildings, 102(11). p. 18.Alesch, Daniel J., Organizations at Risk: What Happens When Small Businesses andNot‐for‐Profits Encounter Natural Disaster. Public Entity Risk Institute, Oct. 2001.Andrews, Donald R., Andrew Muhammad, Ashagre Yigletu, and Albert Clark, Disasterand Black Business Development: Recovering from Katrina. 2006, p. 11.Baker, T. (2009). When disaster strikes, Part 3: Your preparedness plan. American Agent& Broker, 81(6). p. 16.Brudney, J. (2009). Planning to be Prepared: An Empirical Examination of the Role ofVoluntary Organizations in County Government Emergency. Public Performanceand Management Review, 32(3), p. 372.Business Wire (2008, May 27). New National Survey Shows 40 Percent of SmallBusinesses Not Ready for Potential Disaster. Retrieved fromhttp://www.allbusiness.com/company‐activitiesmanagement/operations/10514620‐1.htmlCastillo, C. (2004). Disaster preparedness and business continuity planning at Boeing:An integrated model. Journal of Facilities Management, 3(1), p. 8.Cerullo, V. and Cerullo, M. J. (2004). Business continuity planning: a comprehensiveapproach. Information Systems Management, 21(3): 70‐78.Chang, Stephanie E. and Masanobu Shinozuka, “Measuring Improvements in theDisaster Resilience of Communities,” Earthquake Spectra (20‐3, 2004), pp. 739‐755.Chisholm, P. (2008). Disaster Recovery Planning Is Business‐Critical. The CPA Journal,78(7): 11.Clas, E. (2008). Business Continuity Plans: Key to Being Prepared for Disaster.Professional Safety, p. 45.Cutter, Susan L., “The Geography of Social Vulnerability: Race, Class, and Catastrophe,”(http://understandingkatrina.ssrc.org/Cutter, 2006). Accessed June 18, 2008.Cutter, S. L. (2006). The Geography of Social Vulnerability: Race, Class, and Catastrophe.Retrieved from http://understandingkatrina.ssrc.org/CutterDMG Consulting (2008). News Analysis: Contact Centers Unprepared for Disasters,Disruptions. Customer Interaction Solutions, 27(6), p. 32.Flynn, D. T. (2007). The impact of disasters on small business disaster planning: A casestudy. Disasters, 31(4): 508‐515.Flynn, Stephen and Burke, Sean (Aug. 2010). “Before the Next Katrina – UrgentRecommendations for the President and Congress on Gulf CoastResilience,” p. 14. Center for National Policy.SERRI Report 89975-1 41

Southeast Region Research InitiativeHanson, A. (2007). A Response to 9‐11: Critical Elements of a Crisis Response Plan.Business Renaissance Quarterly, 2(1), p. 47.Hewlett Packard (2007). Survey: Business continuity and availability solutions a highpriority for corporate spending in 2007 (Press release). Retrieved fromhttp://www.hp.com/hpinfo/newsroom/press/2007/070326a.htmlHP & SCORE (2007). Impact on U.S. Small Business of Natural & Man‐Made Disasters.A compilation of public and private sector intelligence. Retrieved fromhttp://www.score.org/pdf/HP_Download_ImpactofDisaster.pdfIllinois Institute of Technology, School of Applied Technology, May 2007Insurance Information Institute (2010, July). Catastrophes: Insurance Issues. Retrievedfrom http://www.iii.org/media/hottopics/insurance/catastrophes/Jeter, L. W. (2005, September 5). Disaster recovery advice for small business owners.Mississippi Business Journal. Retrieved fromhttp://msbusiness.com/blog/2005/09/disaster‐recovery‐advice‐for‐small‐businessowners/Kubitscheck, V. (2001). Business discontinuity‐‐a risk too far. Balance Sheet, 9(3), 33‐38.Louisiana Business‐Emergency Operations Center, Stephenson Disaster ManagementInstitute at Louisiana State University.McCarthy, E. (2004). The best‐laid plans. Journal of Accountancy, 197(5), 46‐53.McDonald, C. (2009, November 11). Experts Say Small Firms Lag In Disaster Planning.Retrieved from http://www.property‐casualty.com/News/2009/11/Pages/Experts‐Say‐Small‐Firms‐Lag‐In‐Disaster‐Planning.aspxNational Emergency Management Association, FEMA, Recommendations for an EffectiveNational Mitigation Effort Report (p.9)Neil, J. (2005). The disaster survival process. Risk Management, 52(5), 22‐27.Olshansky, R. B., Johnson, L. A., Horne, J., Nee, B. (2008). Planning for the Rebuildingof New Orleans. American Planning Association. Journal of the American PlanningAssociation, 74 (3): 273‐287.Oliver, R. W. (2002). Cold strategy, hot strategy. The Journal of Business Strategy, 23(1),6‐8.Pine, John, Associate Professor, Institute for Environmental Studies and theManagement Department, LSU. Looking Beyond the Obvious Risk: How SmallLocalities, Businesses and Non‐profit Organizations can Assess and Manage the RippleEffects of Disasters. Public Entity Risk Institute, 2004.Pitcher, Eric, Disaster Recovery Journal (Winter 2010), Profiting from a Business ContinuityPlan. 23(1) p. 28.Pojasek, Robert B., Environmental Quality Management Journal, 2007.Public Entity Risk Institute (PERI), Claire Lee Reiss, 2004.Reardon, Kenneth M., Marcel Ionescu‐Heroiu, Andrew J. Rumbach (2008). EquityPlanning in Post‐Hurricane Katrina New Orleans: Lessons From the Ninth Ward,Cityscape: A Journal of Policy Development and Research. 10(3), p. 72.Rike, B. (2003). Prepared or not... that is the vital question. Information ManagementJournal, 37(3), 25‐33.SERRI Report 89975-1 42

Southeast Region Research InitiativeRike, B. (2003). Prepared or not ….. that is the vital question. Information ManagementJournal, 37(3), p. 25.Rose, Adam, “Defining and Measuring Economic Resilience to Disasters,” Disaster andPrevention Management, (13, 2004), p.307‐14.Runyan, R. C. (2006). Small Business in the Face of Crisis: Identifying Barriers toRecovery from a Natural Disaster. Journal of Contingencies and Crisis Management,14 (1): 12‐26.Savage, M. (2002). Business continuity planning. Work Study, 51(5), 254‐261.Scarinci, C. (2002). Contingency planning for small businesses. The CPA Journal, 72(8),65.SCORE (2009, June 24). SCORE Helps Businesses Prepare for and Recover fromDisaster, Especially during Hurricane Season. Retrieved fromhttp://www.score.org/newsroom_disaster_resources_09.htmlSeidenberg, Jennifer, Cultural Competency in Disaster Recovery: Lessons Learned fromthe Hurricane Katrina Experience for Better Serving Marginalized Communities(01‐2006, pg. 24).Simpson, R. L. (2001). What to do before disaster strikes. Nursing Management, 32(11),13‐14.Small Business Administration (2010). FAQs. Retrieved fromhttp://www.sba.gov/aboutsba/sbaprograms/8abd/faqs/index.htmlWebb, G. R., Tierney, K. J. & Dahlhamer, J. M. (2000). Businesses and disasters:Empirical patterns and unanswered questions. Natural Hazards Review, 1(2), 83‐90.Webb, G.R., Tierney, K.J. & Dahlhamer, J.M. (2002). Predicting long‐term businessrecovery from disasters: A comparison of the Loma Prieta earthquake andHurricane Andrew. Environmental Hazards, 4:45‐58.Zimmerer, T. W., Scarborough, N. M. & Wilson, D. (2007). Essentials ofEntrepreneurship and Small Business Management. New Jersey: Pearson PrenticeHall. (5 th ed.)SERRI Report 89975-1 43

Southeast Region Research InitiativeAPPENDIX ASMALL BUSINESS BCP/RESILIENCE LITERATURE DATABASE(2000 – 2010)SERRI Report 89975-1 45

Southeast Region Research InitiativeAPPENDIX A. SMALL BUSINESS BCP/RESILIENCE LITERATURE DATABASETable 5. Small Business BCP/Resilience Literature Database (2000 – 2010).NOTE: For optimal performance of this database, the MS Word format version should be used to avoid losing direct document links.AUTHOR(S) TITLE SOURCE TYPE DATE KEY WORDSAdkins, Gabriel L.,Thornton, Tyler J., andBlake, KevinAgility RecoverySolutionsA Content Analysis Investigating Relationshipsbetween Communication and Business ContinuityPlanningPrepare My BusinessUniversity of Oklahoma Study Mar 2009 http://job.sagepub.com/content/46/3/362.abstract?rss=1Agility RecoverySolutions, SBAGuide Jun 2010 www.preparemybusiness.org/planningAlesch, Daniel J., Holly,James N., Mittler, Elliott,Nagy, RobertOrganizations at Risk: What Happens When SmallBusinesses and Not‐for‐Profits Encounter NaturalDisaster.Public Entity RiskInstituteStudy Oct. 2001 https://www.riskinstitute.org/peri/images/file/Organizations_at_Risk.pdfAmerican Red Cross Preparing Your Business for the Unthinkable American Red Cross Guide www.redcross.org/wwwfiles/Documents/pdf/Preparedness/PrepYourBusfortheUnthinkable.pdfAndrews, Donald R.,Muhammad, AshagreYigletu, and AlbertClarkDisaster and Black Business Development:Recovering from KatrinaE‐Journal of Businessand Economic Issues,Volume I, Issue IIStudy Apr 2006 http://web.subr.edu/fileadmin/files/COB_E_Journal/2_‐_E‐Journal_Disaster_and_Black_Business_Development‐_Recovering_from_Katrina.pdfBanks, Janice A.Pilot Study for Business Continuity Planning BestPractices for Small and Disadvantaged BusinessesSoutheast RegionResearch Institute,Oak Ridge NationalLaboratoryStudy Feb 2010 www.serri.org/publications/Documents/SPW%20Project%2089970%20‐%20Final%20Report%20‐%20BCP%20Best%20Practices.pdfSERRI Report 89975-1 47

Southeast Region Research InitiativeAUTHOR(S) TITLE SOURCE TYPE DATE KEY WORDSBecker, CherylynnBrudney, J.Gazley, BethBusiness WireCerullo, V. and Cerullo,M. J.Chang, Stephanie E. andMasanobu ShinozukaHow a Natural Disaster Changed the Face of theRestaurant Industry in Southern Mississippi: AKatrina StoryPlanning to be Prepared: An Empirical Examinationof the Role of Voluntary Organizations in CountyGovernment EmergencyNew National Survey Shows 40 Percent of SmallBusinesses Not Ready for Potential DisasterBusiness Continuity Planning: A ComprehensiveApproach“Measuring Improvements in the Disaster Resilienceof Communities”Journal of FoodserviceBusiness Research, Vol 12,Issue 3, pp. 266‐274Public Performance andManagement Review,32(3), p. 372Article Jul 2009 http://www.informaworld.com/smpp/content~content=a914451264~db=all~jumptype=rssStudy Mar 2009 http://pubget.com/paper/pgtmp_f51db41d05205b10a8a24ab3ac036453Business Wire Article May 2008 www.allbusiness.com/company‐activitiesmanagement/operations/10514620‐1.htmlInformation SystemsManagement, 21(3): 70‐78Earthquake Spectra (20‐3),pp. 739‐755.ArticleSummer2004www.ism‐journal.comArticle 2004 http://cat.inist.fr/?aModele=afficheN&cpsidt=16141779Chisholm, Paul Disaster Recovery Planning Is Business‐Critical The CPA Journal, 78(7): 11 Article Jul 2008 www.nysscpa.org/cpajournal/2008/708/perspectives/p11.htmChung, Walter W. C.Yuen, Karina P. K.Clas, E.Cutter, Susan L.Management succession: A case for Chinese familyownedbusinessBusiness Continuity Plans: Key to Being Preparedfor DisasterThe Geography of Social Vulnerability: Race, Class,and CatastropheManagement Decision, p.643Study 2003 www.emeraldinsight.com/0025‐1747.htmProfessional Safety, p. 45 Article Sep 2008 www.asse.org/professionalsafety/indexes/2008.phpSocial Science ResearchCouncilJun 2006http://understandingkatrina.ssrc.org/CutterSERRI Report 89975-1 48

Southeast Region Research InitiativeAUTHOR(S) TITLE SOURCE TYPE DATE KEY WORDSde Mel, Suresh,McKenzie, DavidWoodruff, ChristopherEnterprise Recovery Following Natural DisastersThe World Bank,Development ResearchGroup, Finance andPrivate SectorDevelopment TeamFinch, Peter Supply chain risk management Supply ChainManagement, Vol 9, Issue2, p. 183PolicyResearchWorkingPaper 5269Apr 2010http://econ.worldbank.orgArticle 2004 www.emeraldinsight.com/journals.htm?articleid=858327&show=abstractFlynn, D. T.The impact of disasters on small business disasterplanning: A case studyDisasters, 31(4): 508‐515 Dec 2007 www.ncbi.nlm.nih.gov/pubmed/18028167Flynn, StephenBurke, SeanBefore the Next Katrina – Urgent Recommendationsfor the President and Congress on Gulf CoastResilienceCenter for NationalPolicyReport Aug 2010 www.resilientus.org/library/Before_the_Next_Katrina_CNP_Publication_Aug_2010_1285072143.pdfHutchins, Holly M.Annulis, HeatherGaudet, CyndiCrisis Planning: Survey Results from HurricaneKatrina and Implications for PerformanceImprovement ProfessionalsPerformance ImprovementQuarterly, 20 (3 – 4), pp.27‐51Study 2008 www.interscience.wiley.comInsurance InformationInstituteCatastrophes: Insurance IssuesInsurance InformationInstituteStudy Nov 2010 www.iii.org/issues_updates/catastrophes‐insuranceissues.htmlInstitute for Businessand Home SafetyOpen for BusinessInstitute for Businessand Home SafetyGuide 2007 http://static.nationwide.com/pdf/OpenForBusiness.pdfwww.ibhs.orgwww.disastersafety.orgSERRI Report 89975-1 49

Southeast Region Research InitiativeAUTHOR(S) TITLE SOURCE TYPE DATE KEY WORDSJefferson, Iman A. Will New Orleans’ Black Businesses Bounce Back? Black Enterprise, Vol 37,Issue 4, p. 30Jeter, Lynn W. Disaster recovery advice for small business owners Mississippi BusinessJournalLesonsky, Rieva Don’t Allow a Disaster to Destroy Your Business All Business, SmallBusiness BlogLewis, StevenBusiness Continuity and Disaster Recovery – ThingsOverlookedEDPACS,informaworld.comMassie, Michelle K. Damage Control Black Enterprise, 25 (5), p.54McDonald, Caroline Experts Say Small Firms Lag In Disaster Planning. National UnderwriterOnline News ServiceMorgan, Jonathan Q.Lambe, WilliamFreyer, AllanHomegrown Response to Economic Uncertainty inRural AmericaRural Realities, Vol 3,Issue 2Article Nov 2007 www.blackenterprise.com/business/2006/11/01/will‐new‐orleans%e2%80%99‐black‐businesses‐bounceback/Article Sep 2005 http://msbusiness.com/blog/2005/09/disasterrecovery‐advice‐for‐smallbusiness‐owners/Article Jan. 2010 http://www.allbusiness.com/safety‐accidentsdisasters/disasters‐naturaldisasters/13723776‐1.htmlArticle July 2005 www.informaworld.com/smpp/50026822‐83573551/content~db=all~content=a768430808Article Dec 2005 http://findarticles.com/p/articles/mi_m1365/is_5_36/ai_n15966665/Article Nov 2009 www.propertycasualty.com/News/2009/11/Pages/Experts‐Say‐Small‐Firms‐Lag‐In‐Disaster‐Planning.aspxArticle 2009 www.ruralsociology.org/StaticContent/Publications/Ruralrealities/pubs/RuralRealities3‐2.pdfSERRI Report 89975-1 50

Southeast Region Research InitiativeAUTHOR(S) TITLE SOURCE TYPE DATE KEY WORDSMorganti, Michael A Business Continuity Plan Keeps You in Business Professional Safety Article Jan 2002 www.asse.orgNationwide InsuranceSmall BusinessAdministrationOlshansky, R. B.,Johnson, L. A.,Horne, J., Nee, B.Pine, JohnReardon, Kenneth M.,Marcel Ionescu‐Heroiu,Andrew J. RumbachRunyan, Rodney C.Expect the UnexpectedPlanning for the Rebuilding of New OrleansLooking Beyond the Obvious Risk: How Small Localities,Businesses and Non‐profit Organizations can Assess andManage the Ripple Effects of DisastersEquity Planning in Post‐Hurricane Katrina NewOrleans: Lessons From the Ninth WardSmall Business in the Face of Crisis: IdentifyingBarriers to Recovery from a Natural DisasterNationwide InsuranceSBAJournal of the AmericanPlanning Association, 74(3): 273‐287.Public Entity RiskInstituteCityscape: A Journal ofPolicy Development andResearch. 10(3), p. 72Journal of Contingenciesand Crisis Management,Vol 14, Issue 1, pp 12 ‐ 26Rural Realities, Vol 1,Issue 2Guide Nov 2007 http://static.nationwide.com/pdf/disaster‐planbusiness‐guide.pdfArticle 2008 www.planning.orgArticle 2004 www.riskinstitute.org/peri/images/file/Dealing‐with‐Disaster/LookingBeyond‐Pine.pdfArticle Nov 2008 www.huduser.org/periodicals/cityscpe/vol10num3/ch4.pdfStudy Mar 2006 http://onlinelibrary.wiley.com/doi/10.1111/j.1468‐5973.2006.00477.x/abstractStudy 2006 www.ruralsociology.org/Saenz, RogelioPeacock, Walter G.Rural People, Rural Places: The Hidden Costs ofHurricane KatrinaScarinci, C. Contingency planning for small businesses The CPA Journal, 72(8), 65 Article Aug 2002 www.nysscpa.org/cpajournal/2002/0802/dept/d086502.htmSCORE and HPSmall BusinessAdministrationSCORE Helps Businesses Prepare for and Recoverfrom Disaster, Especially during Hurricane Season.Retrieved fromReady BusinessCounselors to America’sSmall BusinessSmall BusinessAdministrationStudy June 2009 www.score.org/pdf/HP_Download_ImpactofDisaster.pdfGuide Nov 2007 www.ready.gov/business/publications/index.htmlSERRI Report 89975-1 51

Southeast Region Research InitiativeAUTHOR(S) TITLE SOURCE TYPE DATE KEY WORDSSmall BusinessAdministrationPlan to Stay in BusinessSmall BusinessAdministrationGuide Nov 2007 www.ready.gov/business/plan/index.htmlWebb, G. R., Tierney, K.J. & Dahlhamer, J. M.Businesses and disasters: Empirical patterns andunanswered questionsNatural Hazards Review,1(2), 83‐90.Study May 2000 http://dspace.udel.edu:8080/dspace/handle/19716/1600Webb, G.R., Tierney, K.J.& Dahlhamer, J.M.Predicting long‐term business recovery fromdisasters: A comparison of the Loma Prietaearthquake and Hurricane Andrew.Environmental Hazards,4:45‐58Study Jan 2002 http://dspace.udel.edu:8080/dspace/handle/19716/108Zimmerer, T. W.,Scarborough, N. M.,Wilson, D.Essentials of Entrepreneurship and Small BusinessManagement.New Jersey: PearsonPrentice Hall. (5 th ed.)Book Feb 2007 www.amazon.comZissimopoulos, JulieKaroly, Lynn A.Employment and Self‐Employment in the Wake ofHurricane KatrinaDemography, Volume 47‐Number 2, pp 345‐367,Study May 2010 http://muse.jhu.edu/login?uri=/journals/demography/v047/47.2.zissimopoulos.htmlSERRI Report 89975-1 52

Southeast Region Research InitiativeAPPENDIX BAGGREGATED UNIVERSITY/AGENCY SURVEY RESULTSSERRI Report 89975-1 53

Southeast Region Research InitiativeAPPENDIX B. AGGREGATED UNIVERSITY/AGENCY SURVEY RESULTSOf the 40 Mississippi organizations that were identify, 27 (67.5%) agreed to participate ina telephone survey. They included eight Mississippi universities and colleges, fouragencies, ten non‐profit Planning and Development Districts (PDDs), four federalagencies, and one private entity. The question is presented, followed by respondents’answers:1. Does your organization provide Business Continuity Planning/Disaster Recoveryservices to small businesses? If Yes, do you provide BCP/Disaster Recoveryservices to small disadvantaged businesses?NOTE: Only two responded “Yes” to providing BCP services.100%80%93%BCP Services Provided to Small BusinessesBCP Services Provided to SDBs% of Responses60%40%20%7%0%7%0%Services to Small Businesses? Services to SDBs?Yes No Yes NoFigure 2. BCP services provided to small businesses and SDBs.SERRI Report 89975-1 55

Southeast Region Research Initiative2. Are the BCP/Disaster Recovery services that you provide the same for allbusinesses? If No, how are they different?Same BCP Services for All Businesses100%100%80%% of Responses60%40%20%0%YesNo0%Figure 3. Respondents provide the same BCP services to small businesses and SDBs.3. Since Hurricane Katrina, have there been any changes in the services you offer tosmall businesses?Changes in Services to Small Businesses Since Katrina?70%60%50% 50%% of Responses50%40%30%20%10%YesNo0%YesNoFigure 4. Changes in services to small businesses since Katrina.Response: One agency made changes to services since Hurricane Katrina and hasimproved the educational process and gained more knowledge.SERRI Report 89975-1 56

Southeast Region Research Initiative4. Was your organization in operation before Hurricane Katrina?Organizations in Operation Before Hurricane Katrina100%100%YesNo% of Responses80%60%40%20%0%0%YesNoFigure 5. All responding organizations were in operation before Hurricane Katrina.5. How do you track the progress of, or continue communication with, smalldisadvantaged businesses to which you have provided BCP services?Responses: The agency may conduct follow‐up surveys or receive phone calls and emailsfrom SDBs. The agency conducts follow‐up surveys within nine days after a workshop. Italso provides additional follow‐up assistance to SDBs upon request.6. How may we gain access to information describing the result of surveys or theeffect/impact of assistance provided to SDBs?Response: Access to tracking/progress information is not publicly available.SERRI Report 89975-1 57

Southeast Region Research Initiative7. Did your organization provide BCP services before Hurricane Katrina?Organizations Providing BCP Services Before Hurricane Katrina% of Responses100%80%60%40%20%7%93%YesNo0%YesNoFigure 6. Pre‐Katrina BCP services.If Yes, what are the components of your services/programs? Is there a programdescription online or one that we can access?Responses:1. Copiah‐Lincoln Community College, SBDC – Online at www.mssbdc.org2. University of Mississippi, SBDC – Online at www.mssbdc.orgNOTE: Though the respondents indicated they provide BCP services, furtherdiscussion and research of the website to which we were directed revealedthey do not provide BCP services, but rather business plan developmentservices. Program and training descriptions are provided following theSurvey Results section.SERRI Report 89975-1 58

Southeast Region Research Initiative8. Are there any other agencies/organizations that you know of that provideBCP/Disaster Recovery services to SDBs?Organizations Aware of Other Agencies/OrganizationsProviding BCP Services100%80%78%Yes% of Responses60%40%22%No20%0%YesNoFigure 7. Awareness of other agencies providing BCP services.Answers to “other agencies” included: Mississippi Development Authority (MDA); the 10 Planning and DevelopmentDistricts. SBDC Copiah‐Lincoln Community College in Natchez, MS. MDA; Minority & Small Business Development Centers. The PDDs believe the SBDCs at the universities might provide BCP services toSDBs.SERRI Report 89975-1 59

Southeast Region Research InitiativeAPPENDIX CAGGREGATED SDB SURVEY RESULTSSERRI Report 89975-1 61

Southeast Region Research InitiativeAPPENDIX C. AGGREGATED SDB SURVEY RESULTSThe survey population included 158 SDBs in all 10 Planning and Development Districts(PDDs) and 21 counties. In total 58 SDBs (37%) agreed to participate in a telephonesurvey. The vast majority of respondents had four or more employees. The question ispresented, followed by respondents’ answers:1. Demographic profile of respondents:Gender and Ethnicity of Business Owner% of Responses90%80%70%60%50%40%30%67%33%82%MaleFemaleAfrican AmericanAsianHispanicPacific IslanderNative American20%10%11%4% 0% 4%0%Male Female AfricanAmericanAsian Hispanic Pacific NativeIslander AmericanFigure 8. Gender and ethnicity of responding business owners.Business Legal StructurePercent of Responses60%50%40%30%20%53%35%13%Corp.PartnershipLLCSole Prop.10%0%0%Corp. Partnership LLC Sole Prop.Figure 9. Respondents’ Business Structure.SERRI Report 89975-1 63

Southeast Region Research InitiativeLength of Time in Business80%72%Percent of Responses70%60%50%40%30%20%22%28%10 Yrs10%0%2%10 YrsFigure 10. SDBs’ length of time in business.Industries RepresentedConstructionTransportationEducationRetail2%2%3%5%8%25%A&EITProfessional/ScientificHotel/LeisureHealthcare20%10%7%3%5%10%HVACJanitorialPersonal ServicesFigure 11. Industries represented by SDBs.SERRI Report 89975-1 64

Southeast Region Research Initiative2% 2%Hancock11%2% 2%2%2%2% HarrisonBaton RougeCounties Represented by Participating SDBsClay(percentage of respondents located in county)DesotoForrest7%2%4%HindsLowndes4%2%2%2%4%2%44%Figure 12. Where are SDB respondents located?4%4%MadisonMarionNoshobaOcean SpringsOktibbehaPearl RiverPikeSt. TammanyWarrenWashingtonWinstonYalobusha2. Have you experienced any business delays due to weather disasters, such asFloods, Hurricanes or Tornadoes?Have You Experienced Business Delays70%60%Due to Weather Disasters?61%YesNo50%N/A% of Responses40%30%20%36%29%FloodHurricaneTornadoIce Storm10%0%5%3%2%0%Yes No N/A Flood Hurricane Tornado Ice StormFigure 13. SDBs experiencing delays due to weather disasters.SERRI Report 89975-1 65

Southeast Region Research Initiative3. Do you have a written business preparedness and/or disaster relief plan (BCP)?If Yes, did you develop the plan before or after Hurricane Katrina?SDBs with Written BCPsWas It Developed Before or After Katrina?80%65%72%% of Responses60%40%20%35%28%0%Written BCP? Developed Before or After Katrina?Yes No Before AfterFigure 14. SDB respondents with BCPs.4. The 35% of SDBs with written BCPs are focused in the following industries:Respondents with BCPs are Located in the Following Industries(35% of Total Respondents have BCPs)% of Companies25%20%15%10%5%Construction, 22%Transportation, 17%Education, 6%A&E, 6%IT, 17%Professional/Scientific, 17%Hotel/Leisure, 6%Janitorial, 6%Personal Services, 6%ConstructionTransportationEducationA&EITProfessional/ScientificHotel/LeisureJanitorialPersonal Services0%Figure 15. SDBs with BCPs are in the above industries.NOTE: 22% (or 2) of these SDBs are co‐located on military bases and required to have aBCP.SERRI Report 89975-1 66

Southeast Region Research Initiative5. Have you exercised or practiced your plan?Have You Exercised Your Plan?60%50%56%44%YesNo% of Responses40%30%20%10%0%YesNoFigure 16. SDBs exercise/practice of BCPs.6. Are you prepared for a natural disaster?SDBs Prepared for a Natural Disaster100%Yes% of Responses80%60%40%48%52%No20%0%YesNoFigure 17. SDBs prepared for a natural disaster.SERRI Report 89975-1 67

Southeast Region Research Initiative7. Are you aware of any state or federal agency offering assistance in preparing BCP?SDB Awareness of State or Federal Agencies Offering BCP Assistance100%90%Yes% of Responses80%60%40%20%10%No0%YesNoFigure 18. SDB awareness of state or federal assistance with BCP.8. If it were available, what BCP services would benefit your organization?40%BCP Support That Would Benefit Company% of Responses30%20%10%27%11%16%5%2%6%31%Develop BCPCoor w/ EMAAssess RisksReduce RisksTrainingNe w EnvironIns. DiscountBest Practices2%0%DevelopBCPCoor w/EMAAssessRisksReduceRisksTrainingNewEnvironIns. BestDiscount PracticesFigure 19. Requested BCP support.Legend Explanation:1. Develop BCP = Assistance developing a BCP2. Coor w/EMA = More coordination with local EMA3. Assess Risks = Risk assessment4. Reduce Risks = Guidance reducing risks5. Training = Employee training6. New Environ = Strategies for the post‐eventcustomer environment7. Ins. Discount = Insurance discount for written BCP8. Best Practices = Access to BCP best practices9. Other = Outreach and business succession planningSERRI Report 89975-1 68

Southeast Region Research InitiativeAPPENDIX DBCP QUESTIONNAIRESSERRI Report 89975-1 69

Southeast Region Research InitiativeFigure 20. Agency/University BCP Questionnaire.1.Agency/University BCP QuestionnaireAlcorn State University is collecting data for its research on Business Continuity Planning (BCP) forsmall disadvantaged businesses in Mississippi. BCP is the design and deployment of a plan for howan organization will prevent, prepare for, recover and restore interrupted critical functions after adisaster or extended disruption.Thanks for taking a few minutes to complete our questionnaire.1. Does your organization provide Business Continuity Planning/Disaster Recovery services tosmall businesses? Yes ___ No ___2. If Yes, do you provide Business Continuity Planning/Disaster Recovery services to smalldisadvantaged businesses? Yes ___ No ___3. Are the BCP/Disaster Recovery services that you provide the same for all businesses?Yes ___ No ____4. If No, how are they different? List:5. If Yes, since Hurricane Katrina, have there been any changes in the services you offer to smallbusinesses? Yes ____ No ____6. Was your organization in operation before Hurricane Katrina? Yes ____ No ____7. How do you track the progress of, or continue communication with, small disadvantagedbusinesses to which you have provided BCP services?8. How may we gain access to that information?9. Did your organization provide BCP services before Hurricane Katrina? Yes ___ No ___SERRI Report 89975-1 71

Southeast Region Research InitiativeAgency/University BCP Questionnaire (cont’d.)10. If Yes, what are the components of your services/program? Is there a program descriptiononline or one that we can assess?11. Are there any other agencies/organizations that you know of that provide Business ContinuityPlanning/Disaster Recovery to small disadvantaged businesses? Yes ___ No ___If Yes, please list:12. Do you have any other information that might be useful to our BCP/DR study?Thank you for your time.SERRI Report 89975-1 72

Southeast Region Research InitiativeFigure 21. SDB BCP Questionnaire.1. Name of Business:BCP/DISASTER PREPAREDNESSSMALL DISADVANTAGED BUSINESSES QUESTIONNAIRE2. Have you experienced any business delays due to weather disasters such as?Floods ___, Hurricanes ___, Tornadoes ___3. When did that happen _________________________________________?4. Did you receive any Government or private assistance to help you recover? Yes ___ No ___5. Do you have a written business preparedness and/or disaster relief plan (BCP)? *Yes ___ No ___6. If Yes, did you develop it before or after Katrina? Before ___ After ___7. If Yes, have you exercised/practiced your plan? Yes ___ No ___8. Are you aware of any state or federal agency offering assistance in preparing Business ContinuityPlan assistance? Yes ___ No ___9. Are you prepared for a natural disaster? Yes ___ No ___10. What BCP services would benefit your organization?___ Assistance developing a BCP___ More coordination with local EMA___ Risk assessment___ Guidance reducing risks (mitigation)___ Employee training___ Strategies for post‐event customer environment___ Insurance discount for written BCP___ Access to BCP best practicesDEMOGRAPHICS:11. In what county is your business located? _________________________________12. How long in business < 1 yr ___ 1‐5 ___ 5‐10 ___ >10years ___13. Legal Structure:Corporation___; Partnership___; Limited Liability Corp. ___; Sole Proprietorship ___14. Male ___ Female ___African American ___ Asian ___ Hispanic ___ Pacific Islander ___ American Indian ___SERRI Report 89975-1 73

Southeast Region Research InitiativeNational Security DirectorateP.O. Box 6242Oak Ridge National LaboratoryOak Ridge, TN 37831‐6252www.serri.org