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Disaster Planning for Your Small Business

Nearly 40 percent of small businesses never reopen after a natural disaster. As a small business owner, you can’t control natural disasters, but you can keep your small business from becoming a statistic. With risk awareness, a continuity plan, safeguards, and access to capital, your business’ chance of recovering from unexpected losses will be much greater. Here are measures you can take to protect your business and reopen your doors much sooner:

ASSESS
– Identify the possible natural disasters that may affect your business. These could include but are not limited to: earthquake, tornado/wind, hurricane, flood, volcanic eruptions, severe weather, and wildfire. Consider the potential severity of the hazards. Consider the damage that could affect your ability to resume operations and workarounds to expedite recovery.
– Make a comprehensive list of possible business interruptions and assign them to threat categories: High Impact/High Likelihood, Low Impact/High Likelihood, High Impact/Low Likelihood and Low Impact/Low Likelihood. Invest more time, money, and resources towards mitigating the “high impact/high likelihood” threats.
– Use The Insurance Institute for Business & Home Safety (IBHS) free ZIP code tool to identify potential disasters in your area. The IBHS website includes information on damage mitigation, preparation plans, and how to reduce costs for recovery.

PLAN
– Create a continuity plan to respond quickly to business interruptions. Identify your business’s functions and processes required to run your business and determine how long your business can go with these being disrupted. Who performs these functions? What is needed to perform these functions?
– Consider your business’s finances, production, service delivery, sales, marketing, customer service, human resources, administration, information technology, and purchasing.
– Create a communication plan to contact your employees if an emergency prevents them access to your business. For example, an employee telephone calling tree or an emergency telephone number for employees to call-which has voicemail capability.
– Identify ways to communicate with contacts, suppliers, vendors, and customers after a disaster. For example, a designated telephone number, social media, or your website.
– Safeguard your information technology. Keep a backup copy of your computer’s files, including payroll, accounting, and production records. Keep records of your leases or purchases of computer equipment, in case they are damaged.
– Protect your place of business financially with the appropriate business insurance and access to capital. A natural disaster can highly impact your revenue and net income. Set aside an emergency cash reserve fund. Talk to a business banker about a line of credit or credit card, to help manage your business’s cash flow.

ACT
– Test your continuity plan to ensure the plan works prior to an emergency. Meeting with your staff and discussing the potential threats, their likelihood and impact, will help ensure the business will continue before, during and after these threats.
– Revise and update your plan every six months.
– Share your plan with your staff, vendors, contacts, and customers.

While all businesses should have a business continuity plan and a disaster recovery plan, recent studies show that 48 percent of all small businesses are fundamentally underprepared. Below are resources to help you further prepare, mitigate potential risks to your small business and recover from the operational and economic impacts of a natural disaster.

RESOURCES
Insurance Institute for Business & Home Safety
In addition to providing this free business continuity toolkit, IBHS provides free disaster preparedness and property protection guidelines, recommendations and projects for small businesses. The Institute also offers post-disaster recommendations on repairing and rebuilding to make your building(s) stronger and safer the next time a disaster strikes. http://disastersafety.org

American Red Cross
Among other disaster preparedness and response services, the Red Cross offers a number of preparedness training programs and resources for workplaces, families, and individuals. www.redcross.org

Business Civic Leadership Center – Disaster Help Desk
The BCLC Help Desk is designed to enhance community economic recovery after a disaster. The Help Desk provides on-the-ground coordination of information among businesses, local chambers of commerce, NGOs, government responders, and disaster recovery specialists. https://www.uschamberfoundation.org/site-page/ disaster-help-desk-business

DisasterAssistance.gov
Provides information on how you might be able to get help from the federal government before, during and after a disaster. If the President of the United States makes help available to individuals in your community after a disaster, you can visit this site to apply online. http://www.disasterassistance.gov

Federal and Local Emergency Management Agencies
Even the largest, most widespread disasters require a local response. Local emergency management programs are the core of the nation’s emergency management system. https://www.fema.gov/emergency-management-agencies

Internal Revenue Service–Disaster Assistance and Emergency Relief for Businesses
The IRS offers audio presentations about planning for disaster. These presentations discuss business continuity planning, insurance coverage, record keeping and other recommendations for staying in business after a major disaster. http://www.irs.gov/Businesses/Small-Businesses-&-SelfEmployed/Disaster-Assistance-and-Emergency-Relieffor-Individuals-and-Businesses-1

Small Business Administration
The U.S. Small Business Administration provides loans, loan guarantees, contracts, counseling sessions and other forms of assistance to small businesses following a disaster. http://www.sba.gov/ https://www.sba.gov/business-guide/manage/prepareemergencies-disaster-assistance

Small Business Development Centers
The SBDC assists small businesses with financial, marketing, production, organization, engineering, and technical problems- as well as feasibility studies. http://www.sba.gov/content/small-businessdevelopment-centers-sbdcs http://www.asbdc-us.org/

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