How a business continuity plan helped one company recover from disaster
Agricultural equipment maker Anderson Group was doing well when a fire destroyed 75% of its factory in the fall of 2012. Fortunately, the skilled response of Anderson’s three young partners showed they weren’t ready to let the disaster stop their momentum.
Patrice Desrochers was in a hotel room in the Czech Republic when he received an alarming telephone message: “Your factory is on fire.” From her living room, his mother could see a violent blaze ravaging the factory in Chesterville, Quebec. It was a rude awakening for Desrochers, who had just completed buying the company with his two partners a few months before.
“I was sleeping. My mother was watching the factory burn and couldn’t reach me,” says Desrochers, president and CEO of Anderson Group, a manufacturer of innovative agricultural equipment.
Fire threatens strong growth
The fire struck the company at a time of rapid expansion. Sales had climbed to $24 million from $15 million in just three years, thanks to the hard work of Desrochers and his partners, Frédéric Lavoie and Luc D’Amours, both of whom have since left the company.
The fire threatened that growth, destroying 75% of the factory and causing losses totalling $11 million.
Desrochers, D’Amours and Lavoie had all worked for the company for a long time before taking it over from its founders. They were not ready to let the catastrophe halt their expansion plans.
A crisis management action plan
Unforeseeable events such as a fire, computer system failure or natural disaster can have serious consequences for a business and even cause it to go bankrupt. Entrepreneurs should have an action plan in place to handle crises and maintain business continuity. Such a plan can keep you from overlooking critical steps in the heat of the moment.
Upon arriving in Chesterville, a village midway between Montreal and Quebec City, Desrochers sized up the damage: $3 million in lost inventory, $5 million in lost equipment and $3 million in lost facilities.
“The fire started on a Wednesday night and Thursday we called our financial partners and reassured our employees. By Monday, we started implementing our action plan.”
The speed and determination with which the three partners reacted are what saved Anderson Group, a BDC client.
The young entrepreneurs decided to rebuild an expanded factory in Chesterville that is 20% bigger than the previous building.
Rebuilding had to happen at the same time as production resumed at a temporary location to ensure operational continuity.
Starting from scratch
Desrochers’ role was to get the company’s administration, accounting and computer network back on track. D’Amours, the Operations Manager, took on the task of securing temporary facilities until the new factory was built. Ten days after the fire, he found a warehouse in Victoriaville that was suited to the installation of production equipment.
Lavoie, the R&D and Technical Services Manager, had the challenge of making sure that research and development activities were not compromised.
Instead of hiring subcontractors, the partners decided to ask their own employees to help install the production lines in the temporary facilities.
Five weeks after the disaster, all employees were back at work and production was at 95% of its pre-disaster level.
And thanks to the three partner’s rapid response, Anderson Group’s new factory was inaugurated a year to the day after the fire.
Would you like to create a business continuity plan for your company?
Use this checklist designed for business owners to create a plan. It will minimize the impact of unforeseen events and protect your employees, customers and suppliers.