In an ideal world, small business owners would be fully prepared for natural disasters. They’d have comprehensive recovery plans including important information. Hard copies would be stored off site in waterproof bags and fireproof safes. When a disaster struck, every step would be executed, and the business would be restored as it had been, or better.
But that’s not the real world. While most small business owners understand the need for disaster planning, many don’t have a comprehensive plan.
The need for comprehensive planning has never been greater. In the first half of 2016, earthquakes, flooding, wildfires and severe weather killed more than 1,000 people and caused nearly $70 billion in damage in Canada, China, Ecuador, Japan, the U.S. and Western Europe, according to a report by reinsurance company Aon Benfield. Hurricane Matthew alone caused $4 billion to $5 billion in damage when it struck Florida, Georgia, South Carolina and North Carolina in October, according to an estimate by Moody’s Analytics.
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A recovery plan can help small businesses respond to a disaster faster and more effectively. But for those without one, here’s a checklist of what to do after disaster strikes:
1. Prioritize safety: Your first objective should be to ensure the immediate safety of yourself, your family and, if you’re at work, your employees, customers and anyone else on your premises. Evacuate, administer first aid, call for emergency assistance and locate food, water, shelter and medical supplies. Try to account for everyone’s whereabouts: Who’s safe? Who’s missing? If communications disruption is a likely result of a natural disaster, then business owners should designate an alternate means of contacting employees, clients, and suppliers, such as email, social media, or a designated meeting place.
2. Activate your plan: If you have a recovery plan, find a copy and review it, Set a goal to reopen your business as soon as possible. The quicker you’re back up and running, the less impact the disaster will have.
3. Secure your premises: If you rent your place of business, contact your landlord. If you own the building, contact your insurance agent or carrier. You may need to wait for an actuary to visit your site before you begin repairs. Meanwhile, board up broken windows and cover goods with tarps to discourage looters. If your building is severely damaged, start searching for a new location.
4. Ask for help: Chaos can make communications difficult, but you might be pleasantly surprised by how many of your suppliers, customers, employees and investors will step up to help your business recover. Reach out to people beyond the disaster area, too, as they may be able to aid you from afar.
5. Document your losses: Insurance companies want paper trails. Take pictures. Make videos. Draw up detailed lists of what’s been damaged or destroyed, including business records, inventories, machinery and equipment and other assets. Ascertain whether your computer backups are intact, recoverable or lost forever. Ask your accountant and attorney for copies of financial statements, contracts and other important documents.
6. Communicate: Let your suppliers and customers know when you plan to reopen. Be as realistic as you can about your timeline to purchase materials and deliver finished goods. Ask for flexibility and patience. Though your employees may be distracted, keep them informed and explain that being engaged will benefit them, too.
7. Apply for financing: The U.S. Small Business Administration offers disaster recovery loans that can help you mitigate a working capital crunch or repair or replace real or personal property, machinery and equipment, inventories and other business assets. Apply online, by U.S. mail or call (800) 659-2955.
8. Update your plan: As you implement your recovery, keep notes about what happened, who helped you and how you solved various problems. Review your insurance coverage and backup systems. Use the information to make a new plan so you’ll be ready when the next disaster strikes. You’ll also want to stock up on survival items if you found you didn’t have what you needed or you used up your supply.
Take advantage of the resources available to you now to better prepare you and your business for when disaster strikes. Natural disasters are just one of the many different types of risk your business may face. Luckily, there are measures you can take to help minimize risk in multiple areas of your business. Learn more about managing risk to help keep your business as safe as you can.
Photo Credit: OFFZGRD, Twenty20