Jump to Main Content

Make plans to protect business from disaster

Advisory Date: 
Monday, June 23, 2014

By Seth A. Goodall
New England Regional Administrator

June is Hurricane Preparedness Month, a time for small businesses and communities to assess their plans for how to react should a hurricane affect their area.

While not every community in our country may be hit by a hurricane, it’s a good time for all communities, from California to Georgia to Alaska and every state in between to review or prepare a disaster preparedness plan, so if the unexpected occurs, your small business is ready to take action.

According to the National Oceanic and Atmospheric Administration, 2011 and 2012 were the two most extreme years on record for destructive weather events, causing more than $170 billion in damages, much of that to businesses. Downtime in the aftermath of extreme weather costs small businesses about $3,000 a day, according to the Institute for Business and Home Safety.

For small business owners, being prepared can mean staying in business following a disaster.

The Atlantic Hurricane season runs through November 30. Here are a few tips to get you started building a disaster preparedness plan that will protect your organization, your clients and your bottom line in the event of a weather-related emergency:

• Determine your greatest risk potential.  It might come from wind damage or the inland flooding that typically follows the tropical storm’s heavy rains.  Meanwhile, your business could suffer financial losses due to road and bridge closings in the aftermath of a hurricane.  Power outages are a major threat, especially to businesses in the food and hospitality industries. What would happen if you had to shut down your business for several days?  Look at the building where you do business—inside and out—and assess the risks. If you do this early enough, you’ll have time to do structural upgrades—like impact resistant doors and windows—that can prevent possible future storm damage.

• Review your insurance coverage.  Make sure you understand what’s covered, and if you need flood insurance. Check into business interruption insurance, which helps you cover operating expenses if you’re forced to temporary close the business. Calculate the cost of business interruptions for a day, one week, a month or six months.  Build a cash reserve that will allow your company to function during the recovery phase.

• Prepare your supply chain.  Develop professional relationships with alternate vendors, in case your primary supplier isn’t available. Place occasional orders with them so they’ll regard you as an active customer. Create a contact list for important business contractors and vendors you plan to use in an emergency.  Keep this list with other documents filed at an easily accessible place, and also at a protected off-site location.

• Create a crisis communications plan. Make sure your staff, customers, vendors, contractors—everyone you do business with—know what’s going on in the aftermath of a disaster. Establish an email alert system, keeping primary and secondary email addresses for your employees, vendors and customers. Provide real-time updates to the community so they know you’re still in business and in the process of rebuilding after the disaster. And don’t forget to test your plan.

To learn more about the top five disaster risks for small businesses, and how to develop a recovery plan,  sign up for the free webinar at 2 p.m. July 8 hosted by the SBA and Agility Recovery. Space is limited. To register, visit www.preparemybusiness.org.