Does your small business have a disaster preparedness plan? All businesses should have a plan to deal with a crisis. Doing so may reduce dangers and financial losses. Coming back from a disaster is a challenge for any business, but without any preparation, it might be impossible. You can’t just count on insurance awards and aid from government agencies to get your business up and running again. Many business owners do not have insurance that covers them in these situations.
According to the Federal Emergency Management Agency (FEMA), 40% of businesses never reopen after a disaster. No business owner wants to be a part of such a statistic. That is why businesses need to have a plan. We will go over some of the steps that business owners should start with when preparing a disaster plan. There is also a lot of free information online that businesses should take a look at. We will share links to some of these resources with you as well.
Business disasters to prepare for:
- Winter storms
- Terror attack
- Water damage (sprinklers, faulty roofs, etc.)
- Faulty/malfunctioning/stolen equipment and machinery
Disaster preparedness – Where to start
Evaluate your surroundings – Start with preparing for the types of disasters most likely to happen near businesses in your region. In Illinois, this might be tornadoes, snow, and floods. You should also plan for other possible disasters as well, especially if your business is close to a river, nuclear power plant, or potential terror target.
Figure out the cost of interruptions to your business for a day, week, month or longer. If possible, set aside funds to help your business to continue running while you recover from an emergency.
Review your insurance coverage – Don’t make the mistake of assuming that your insurance will cover you in the case of a disaster. Talk to your insurance agent and review your business coverage for emergencies.
Create a business continuity plan – A business continuity plan helps your business continue operating as it recovers from an emergency situation. When this plan is necessary it identifies important business functions, helps staff carry out their responsibilities, and keeps crucial documents safe.
Have a clear chain of command – Make sure you have an emergency chain of command and that your employees are aware of it. You should also have a leave policy during disasters as some of your employees may need to recover.
Protect valuable information – You need to have important information stored off-site or electronically in case your place of business is destroyed or temporarily closed. It should have any business information on vendors, customers, employees, logistics, and finances that are important for running your business.
Create a communications plan – Know how to reach your employees, vendors, contractors, and customers in case of an emergency. Have an alert system, such as automated text messaging to employees. Have contact information for anyone you may need to get in touch with to reopen your business doors.
These are some of the key parts of your business preparedness plan. There are still others to think about, such as emergency plans for your payroll and vendors. The more items you can prepare for the better the chances your business can survive an emergency.
Disaster Preparedness Resources:
- Emergency preparedness resources for business – FEMA
- Preparedness resources – SCORE
- Disaster resources – SBA
- Assistance for disasters – DisasterAssistance.gov
- Emergency response plan templates – FEMA
- Disaster loan program – SBA
- Business impact analysis worksheet – FEMA
- Why Businesses Need a Disaster Preparedness Plan – DRJ
- Small business disaster planning guide – SCORE