Disaster Preparedness Tips for Small Businesses
Small-to-medium-sized businesses are the most vulnerable in a disaster scenario. When you consider that America’s small-businesses form the backbone of the nation’s economy – small businesses alone account for more than 99 percent of all companies with employees, employ 50% of all private sector workers and provide nearly 45 percent of the nation’s payroll – their preparedness for a disaster scenario is of paramount importance.
We have been discussing the importance of disaster planning and the role business continuity plays in a business’, and therefore a community’s, resilience. However, the way in which a small or medium sized business prepares for a disaster is different from that of a larger corporation. Smaller organizations face added challenges that their corporate colleagues simply do not.
For example, smaller organizations often don’t own the building in which they do business; they may also not own the production machinery or other vital fixed and mobile asset resources vital to their operations. Accordingly here are some helpful tips for small business owners to consider when devising their disaster preparedness plans:
- Start your preparation by identifying what your organization needs to do in order to buffer itself from damage. For example, even if you don’t own the building or facilities in which you do business, you can still minimize your losses by preparing your workspace to prevent damage to fixed and mobile assets.
- To do this, determine what production machinery, computers, and other essential assets are vital to keeping your business operational during and after a disaster scenario. Next, begin to store extra supplies offsite, and identify a temporary location if your company is forced to relocate after the disaster. Coordinate with industry partners to share resources in the event of an industry-stalling disaster. Remember: your commitment to your customers extends beyond business obligations; local businesses play a critical role in a community’s resilience and recovery efforts.
- Determine escape routes from your place of business and establish meeting places. Identify which resources to take with you and which you are willing to leave behind. Make sure everyone understands the emergency plan before a disaster occurs. This comes with extensive planning and exercise. Designate a point-of-contact to coordinate communications with employees, customers, and vendors.
- Review your insurance coverage and determine what is and what is not covered. For example, most policies do not cover flood damage. Consider business interruption insurance – it covers operating expenses, like utilities, and compensates you for the income lost during a temporary closure.
- While it should go without saying, make sure to make back-up copies – both digital and hard copy – of all tax, accounting, payroll, production records, and customer data. Store these records at an offsite location at least 100 miles away. Important documents should be saved in fireproof safe deposit boxes.
- Develop a post-disaster communications strategy. Keep current phone numbers for your suppliers, employees, customers, utility companies, local media, and emergency management agencies readily available. Appoint a spokesperson to get the word out that your company will remain open and aid the community’s recovery efforts.
- If despite taken adequate steps to minimize risk, your business still incurs significant risk consider applying for a recovery loan from the Small Business Administration. Physical Disaster Loans are available for up to $2 million in repairs for damaged real estate, assets, inventory and other resources. Economic Injury Disaster Loans are available to small businesses, private/non-profit organizations and small agricultural co-ops that have suffered substantial economic losses as the direct result of a disaster.