It happened to Pepsi. It happened to Exxon. It happened to Tylenol. If you think that it cannot happen to you, think again. Public relations crises know no barriers. Whether you are a local dry cleaner or a multimillion-dollar corporation, you are vulnerable to losing face (and business) in the eyes of the public. If you mistakenly believe you are immune to such an occurrence, maybe it is time to recognize how easily your public image can fall apart.

"Companies, whether big or small, are judged more by what they do wrong than what they do right," claims Cindy Railing, an accredited public relations consultant from Hayward, California. To effectively handle bad press, firms need to have a plan in place and be ready to implement it at a moment's notice. Companies grow by building relationships with their customers. Handling bad news effectively is critical to maintaining and strengthening those relationships. But how can a small enterprise learn to manage news the way large corporations do? Is it necessary to hire a public relations firm? Not if you are properly prepared for adverse publicity. A good plan can make the difference between maintaining the public's trust or irreparably damaging it.

Building the Perfect Bomb Shelter

While it is impossible to plan for every contingency, when it comes to keeping a small business afloat, it is worth the effort. "Small firms should have a crisis handbook to guide them through the steps to take in times of adversity," suggests Laura DuDell, executive vice president of the public relations firm DuDell & Associates in Berkeley, California. Much like building a bomb shelter, your company needs to construct a plan of action to prepare for issues that have not yet surfaced, but might at any moment.

Many businesses are not prepared, and that can cost them dearly. One stark example comes from a water amusement park in California. Several teenagers fell to their death after a group of them overloaded and broke a water slide--against the protestations of the attendant. As the company spokesperson, how would you respond? The public is hungry for information. It knows nothing of your employees, your policies or your practices. What do you tell them?

"The first words park authorities spoke to the media were, 'It's not our fault. There were too many kids on the slide,'" Railing recounts. "While this may have been true, the public interpreted these initial remarks as dispassionate finger-pointing."

What is said within the first few moments of a crisis can affect how a company is perceived long after the issue has been resolved. In the case above, when the park reopened for business several months later, public perception was that park authorities regarded the incident as an unfortunate annoyance and couldn't wait to get the cash register ringing again.

"When the incident first occurred, they should have said, 'We don't know exactly what happened. This is a terrible tragedy. We'll give you more details as soon as we can,'" says Railing. "This would have ameliorated the public's negative perception of indifference."

Brainstorm the Possibilities

Start developing your plan--which outlines your first several moves after a crisis occurs--by identifying the possible issues that could arise for your company. According to Ira Krawitz of PR Newswire, there are two major scenarios you need to prepare for. "If bad press surrounds a certain product, then it's a quality issue. If it surrounds a person, it is an ethical issue. Have strategies to deal with both tracks before events happen," he urges.

No matter how nightmarish or improbable a scenario seems, prudent news management preparation necessitates your taking it under consideration. As you brainstorm these "what ifs," also determine the possible scope of each fallout. Will the crisis become known locally? Regionally? Nationally? What parts of your business will be involved?

Choose Your Spokesperson

Every business needs a spokesperson with the authority to speak for the company when a crisis hits. For the day-to-day work of relating to the public, your public relations personnel may be sufficient--not so in a media crisis. "When a major catastrophe develops, make sure your spokesperson is the top person in the company," counsels Linda Valdez, executive vice president and co-owner of Regnier, Valdez and Associates, a marketing, advertising and public relations firm based in San Antonio, Texas. "People want to hear from someone with the power to clean up what went wrong."

Form Your Crisis Team

Many firms put together a group of individuals responsible for implementing a plan once a crisis occurs. Depending on the size of your company, the team can be as small as three people or as large as 10. Decide on the group's chain of command and inform your employees. Compose a list of contact information for every member of the team including home phone, beeper, car phone, e-mail address and any other means of getting in touch with them.

Establish the Plan's Operational Principles

Before the designated spokesperson utters a single word to the media, you must "get your facts as correct and current as possible," advises DuDell. "Correct information allows for clear, concise and honest answers." Remember to act promptly. Although remaining silent might be your initial response, the best way to control the kind of information that is released to and through the media is to provide the details, not withhold them.

According to Railing, "if you do not have all the facts at first, be honest in saying that you're not completely aware of what happened. You will antagonize the media if they think you are trying to cover something up. Convince them that additional details will be disclosed as soon as you receive more information," she says. Do not forget your employees during a time of crisis. "Employees can be either your best or worst ambassadors," Railing notes. Be sure they know how to interact with the media and where to direct inquiries. As information is collected and made public, obtain and share it with them. Long after employees leave your firm, they will continue to contribute to its image. Taking these steps to keep employees informed and involved is an investment in your company's future, whether staff members continue to work for you or not.

Handling the Aftermath

Also remember that what you do after a crisis is finally resolved can be as important as what is done in the midst of it. Make sure that the task of thanking all parties involved and disseminating follow-up information is delegated.

During the following months, do not continue to remind the public of the issue, but instead remind them of the positive aspects of your products or services. Let people know that your company is still running strong and that you appreciate their continued patronage. This is also an excellent time to evaluate what happened and how the situation was handled. Stop and scrutinize the details of your crisis management plan. What worked? What did not? Determine which procedures should be adjusted or even adopted as standard procedure for the future. Managing a crisis is very different from normal management. Chaos and lack of control often characterize this kind of situation. A well-constructed crisis management plan prevents people from acting on intuition or unreliable information and provides a means for employees to act quickly and effectively. For in the final analysis, crisis management is not strictly the domain of large companies, but of all businesses that value their clientele and wish to be valued by them.

Excerpted with permission from Small Business Success, Volume XII, produced by Pacific Bell Directory in partnership with the U.S. Small Business Administration.