Make Plans To Protect Your Business In the Event of A Disaster
By U.S. Small Business Administration mid-Atlantic Regional Administrator Natalia Olson-Urtecho
June is Hurricane Preparedness Month, a time for small businesses and communities to assess their plans for how to react should a hurricane affect their areas. And while not every community in our country may be hit by a hurricane, it’s a good time for all communities, from California to Georgia to Alaska and every state in-between to review or prepare a disaster preparedness plan—so that if the unexpected occurs, your small business is ready to take action.
According to the National Oceanic and Atmospheric Administration (NOAA), 2011 and 2012 were the two most extreme years on record for destructive weather events, causing more than $170 billion in damages, much of that to businesses. Downtime in the aftermath of extreme weather events is costly—about $3,000 per day for small businesses, according to the Institute for Business and Home Safety.
For small business owners, being prepared can mean staying in business following a disaster. Explore the resources that can help you develop an emergency preparedness and disaster relief plan at http://www.sba.gov/.
[The Atlantic Hurricane season runs through November 30.] Now’s a good time to build a disaster preparedness plan that will protect your organization, your clients and your bottom line in the event of a weather-related emergency. Here are a few tips to get you started:
Determine your greatest risk potential. It might come from wind damage or the inland flooding that typically follows the tropical storm’s heavy rains. Meanwhile, your business could suffer financial losses due to road and bridge closings in the aftermath of a hurricane. Power outages are a major threat, especially to businesses in the food and hospitality industries. What would happen if you had to shut down your business for several days? Look at the building where you do business—inside and out—and assess the risks. If you do this early enough, you’ll have time to do structural upgrades—like impact resistant doors and windows—that can prevent possible future storm damage.
Review your insurance coverage. Make sure you understand what’s covered, and if you need flood insurance. Check into business interruption insurance, which helps you cover operating expenses if you’re forced to temporary close the business. Calculate the cost of business interruptions for a day, one week, a month or six months. Build a cash reserve that will allow your company to function during the recovery phase.
Prepare your supply chain. Develop professional relationships with alternate vendors, in case your primary supplier isn’t available. Place occasional orders with them so they’ll regard you as an active customer. Create a contact list for important business contractors and vendors you plan to use in an emergency. Keep this list with other documents filed at an easily accessible place, and also at a protected off-site location.
Create a crisis communications plan. Make sure your staff, customers, vendors, contractors—everyone you do business with—know what’s going on in the aftermath of a disaster. Establish an email alert system, keeping primary and secondary email addresses for your employees, vendors and customers. Provide real-time updates to the community so they know you’re still in business and in the process of rebuilding after the disaster. And don’t forget to test your plan.
To learn more about the top five disaster risks for small businesses, and how to develop a recovery plan, sign up for the Tuesday, July 8, free webinar hosted by the U.S. Small Business Administration and Agility Recovery. The live presentation begins at 2 p.m. EDT, will be followed by a question and answer session. Space is limited, so register now.