To protect the business you love, you need a disaster preparedness plan. If you haven’t created one yet, you’re not alone. The majority (75 percent) of entrepreneurs are unprepared for the unexpected, according to a Nationwide survey of small businesses.
It’s understandable that disaster preparedness might get bumped down a busy entrepreneur’s to-do list. But the consequences can be devastating. Severe weather and other disasters can bring down electricity, telecommunications and transportation systems for days, weeks or months. About 40 percent of small businesses don’t reopen after a natural disaster, according to the Federal Emergency Management Agency (FEMA).
What if there was a way to look at disaster preparedness as not only an essential investment in the future of your business, but also as a way to strengthen it right now? As part of a comprehensive plan, the three steps that follow can help build a more resilient, better-run business today and mitigate problems in the future.
1. Know Your Technology Infrastructure Inside and Out
Virtually all small businesses rely on technology, from data files and phone systems to Internet access and payment systems. If a business can’t recover its critical technology systems quickly, it could lose customers, suppliers and vendors.
Build a foundation to safeguard and restore technology with network documentation ― a written record of the hardware, software, data and systems that make up your company’s network. Use the network documentation to develop a plan that maps out how you’ll recover all those critical systems, data and connectivity, and protect confidential information. If you’re not a technology expert, hire a professional
Store hard copies of essential documents offsite and electronic versions in the cloud. Keep the disks needed to reinstall software in external locations. That way, if your business’s physical location is in harm’s way, your technology remains safe.
Make sure you have easily accessible emergency contact information for all your technology providers and partners. Ask providers, such as your point-of-sale company, about their emergency preparedness. If you’re not comfortable with the answers, shop around.
While all of these actions will help you get back up and running if a disaster strikes, they are also invaluable right now. Documenting your network, for example, can make everyday repair and maintenance faster and cheaper. As you review your security protocols, you can identify vulnerabilities. Having full information at your fingertips can help avoid and mitigate losses now and in the future.
2. Build a Communications Plan That Works in Normal and Extreme Conditions
Under normal circumstances, a lack of clear communication hurts productivity and profitability. In a disaster, it can be catastrophic. Establish a clear internal hierarchy that maps out communications protocols, roles and responsibilities. It should specify who contacts whom and by what channels if the unexpected happens.
Establish who will have access to the company’s website and social media accounts should you need to post real-time updates. In the event communication networks are down, consider choosing in advance a physical location to meet following a disaster.
Employees are just the beginning, however. You must have contact information – including emergency information where applicable – for customers, suppliers, vendors and others. One big danger in a disaster is that customers will go elsewhere, especially if they can’t reach you in a timely way. Also, be sure you know how to quickly connect with tech partners, insurance agents, accountants and attorneys.
While it’s essential in an emergency, a thorough communications plan can help your business run more smoothly in the present. The goal is to be sure that your employees have easy access to the information they need to do their jobs to the best of their abilities. Similar to the technology audit described above, a communications audit can help surface gaps that can be addressed for better performance now.
3. The Right Insurance Can Mean the Difference Between Survival and Shutdown
Don’t fall victim to the common mistake that basic insurance, such as property coverage, is adequate. Property coverage is critical but damage to your office, retail space or inventory may be just the beginning of the losses you’ll incur. One overlooked protection is business interruption insurance, which is added to a property insurance policy or included in a package policy.
Policies vary but this type of insurance generally helps to recompense owners for lost revenue while their business is completely or partially shut down. It may also cover ongoing operating expenses, such as electricity, temporary relocation or other costs.
Take the time before disaster strikes to find out exactly what your policy covers and whether that will be adequate given a range of scenarios.
Prepare Now and Every Day
A natural disaster can be insurmountable for a small business – but it doesn’t have to be. While it’s understandable that busy entrepreneurs may struggle to find time to plan for disaster and other unexpected events, the consequences can be dire. By taking action now, you can make immediate improvements and ensure that the business you worked so hard to build has a long and successful life.
Daniel DeMeo is CEO of CAN Capital, the market share leader in alternative small business finance.