Small Business Survival: Preparing Before an Emergency
by Greg Drobny
Small businesses are the heart of the American economy, but many small businesses aren’t ready for an emergency or disaster.
An article published on smallbusiness.com states that “only 37% of small businesses have a formal disaster preparation plan.” The Institute for Business and Home Safety claims that one in four businesses never reopen after a disaster.
Small businesses are even more prone to closing their doors with statistics as high as 47%. Most of these business don’t have a disaster plan. Because of this, they don’t know where there are risk and how to recover from them. Recent hurricanes Harvey and Irma as well as forest fires in the West are reminders that disasters happen. Here are some tips to get your business on the right track for preparing for a disaster.
Before an emergency occurs, it’s important to think about how your business will react to an emergency. The CDC, Isri, and IBHS provide some great templates for create an emergency plan that focus on evacuation, communication, response planning and training. Building your plan depends on the likelihood of an event occurring. For most businesses, there is a high likelihood that the business could catch on fire or lose power for a long length of time while other disasters such as earthquakes or hurricanes are usually regional in nature. Prioritizing the type of disasters your company may face is also helpful in determining overlap how your business responds to each emergency that will help your small business determine what actions your business should invest in.
For many emergency scenarios, such as a fire, tornado, or flood, your employees need to know how to get out of the building. Once they are out of the building, it’s important to know who to contact, and what other actions the employees need to take to remain safe or get help for others. Also, think about how your employees communicate today. Technology is changing how we can account for all of our employees from email, SMS and Facebook. There are a number of ways for employees to tell you they are safe. Make sure you add to your plan a recommended way of communicating your safety to each other as a team.
For a small business, an emergency plan should also contain simple backup solutions for critical computer systems within the office. You can use cloud storage solutions such as Dropbox or full blown backup solutions such as Carbonite. If you are savvy enough to know what to backup, a solution such as Dropbox may work for you. If you aren’t a savvy computer user, more complete backup solutions such as Carbonite help take the worry out of backing up your data in the event of an emergency.
Once you have an emergency plan, make sure you review it at least twice a year with your employees. I recommend using Power Point presentations to provide a quick overview of common emergency responses my employees may need to understand. Also, make sure your leadership team knows where to find the disaster preparedness plan. During Hurricane Matthew, my brother was overseas on vacation during the hurricane. Luckily the hurricane missed his home and business, but he made sure he could quickly communicate his preparedness plan in the future by storing the plan in the cloud.
Just as important as planning for a disaster, it’s important to plan how your business will operate after a disaster, called a business continuity plan. Disastersafety.org has great tools for planning for a disaster as well as maintaining business continuity after a disaster occurs. Every day your business is down, is a day your business is losing money. Insurance doesn’t cover lost sales, and getting your business back up and running quickly is essential to survival of your business.
Once a disaster is over, what are the core functions of the business that need to be up and running before you can open your doors again? Think about the important contacts you need including your vendors, your insurance company, and your supplies. This includes the power company, water and other basic utilities that are essential to your business. I also recommend getting a backup list of suppliers in case your suppliers are not able to respond to your needs.
Finally, have an emergency fund and credit available to survive a business outage, repair core assets quickly or hire help if needed. Getting your business back up and running quickly can be the life saver you need to survive the storm. Think about what bills must be paid, even if the business is down for a period of time, such as rent or a mortgage. Insurance can take weeks to months to resolve, and your business may not last that long. Your forward thinking may be your competitive advantage by allowing you to open your doors way before your competition.
Disaster and continuity planning may not save your business from the devastation of a disaster, but it will increase your odds of weathering a storm. Over the years, I’ve seen businesses not only survive, but thrive when disasters hit. Some open their doors to those in need while others provide critical business functions to get communities moving again. These businesses were able to respond to their community because they were prepared. Is your business prepared?
In a time of hyper-specialization, Gregory is an accomplished and educated generalist who understands that knowledge from a multitude of disciplines is necessary for true wisdom. A continuous wanderer and seeker of knowledge, he has worn three different colors of beret for the U.S. Army and worked in everything from metal fabrication, music, and bar tending to politics and publishing while on a constant search for life’s meaning.
This article first appeared in The Havok Journal September 20, 2018.
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